1961-03-02

[Stage Direction]
Mr. Lucien Grenier (Bonaventure) presented the first report of the joint committee on Indian affairs and moved that the report he concurred in.
Motion agreed to.
Fifth report of standing committee on standing orders-Miss Aitken.


Hon. Donald M. Fleming (Minister of Finance):: As a result of the unavoidable absence of my colleague the Minister of Agriculture, may I on his behalf make a short statement which follows negotiations he and I have had with representatives of the sugar refining company involved and the Ontario government.
The agricultural stabilization board has been authorized to support the price of sugar beets for the year 1961. This will stabilize the returns to sugar beet growers in the sugar beet growing areas, namely in Quebec, Ontario, Manitoba and Alberta. Sugar beets for 1961 will be supported on the basis of $13.18, national average price per ton for beets yielding 16 per cent sugar, which is 102 per cent of the 10-year national average price. The prescribed national support price of $13.18 per ton for sugar beets yielding 16 per cent sugar is equivalent to the national average support price in 1960 of $14.23 per ton for sugar beets yielding 17 per cent sugar.
As a result, the support price arrangements for producers in Quebec, Manitoba and Alberta will remain unchanged from last year, and any deficiency payments will be equal to the difference between the prescribed price of $13.18 per ton of sugar beets and the national average price per ton received by producers.
In view of difficulties facing the Ontario sugar beet industry in 1961, a special arrangement, for one year only will apply to sugar beets grown in that province. The Ontario growers have represented to the governments that a return of $13 per ton was
essential to meet their requirements. The processing company has undertaken to raise its purchase price by 50 cents a ton above the original offer. The province of Ontario will make a contribution, equal to 50 cents per ton, toward deficiency payments, payable in that province. Through the co-operation of the company and the province, Ontario growers will be assured of a market at a satisfactory return.


Hon. Paul Marlin (Essex Easl):: Mr. Speaker, I thank the Minister of Finance for this announcement. He will know undoubtedly that several times since the middle of January I have asked the Minister of Agriculture to announce a sugar beet policy for Canada which, he said in the middle of January speaking in Chatham, would be announced within the course of a few days.
Though this announcement comes rather late it is nevertheless very acceptable. When I indicated in the house the other day that in southwestern Ontario seeding operations would begin possibly by the end of March and on that account there ought to be an announcement forthwith, some hon. members did not seem to concur in this statement of fact. But Mr. Bissonet of Stony Point, a well know sugar beet farmer in my riding, said the other day, an announcement of government policy was something that was necessary. The minister recognizes the special situation which attends the Ontario sugar beet farmer, and which puts him in a position somewhat different from that of the sugar beet growers of Quebec and western Canada. Certainly the sugar beet grower in Ontario does not have the transportation freight advantage that exists in the case of the sugar beet grower in western Canada, and that has put him in a difficult position.
It has now been decided that there should be a floor price of $13.18 and the Ontario government is going to assist in the matter somewhat, to the extent of 50 cents a ton. The company has undertaken to make a contribution notwithstanding its alleged loss on its operations with regard to sugar beets in the factory at Chatham, Ontario. I am glad to see the Ontario government providing this assistance. It is emulating the practice of the government of the province of Quebec, a government that has for the past year or so been extending similar assistance.


Some hon. Members:: Order.

Support Price for Sugar Beets


Mr. Speaker:: Order. The hon. member for Essex East is getting a bit far afield in his comment on the factual statement.


Paul Joseph James Martin: Mr. Speaker, with great respect I do not believe I am. I was just about to point out that the Minister of Finance has said that the Ontario government is going to give some assistance, and that this practice has now been followed for some time in the province of Quebec. I do not see that there is anything wrong in that statement. The fact that it enrages hon. gentlemen opposite does not make it out of order.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I understood that you made a ruling that the hon. member was out of order in discussing the political aspects of this question.


Mr. Speaker:: I expressed my view that the hon. member was going rather far afield, but if the hon. member for Parry Sound-Muskoka will read the rule he will find when a point of order is taken the member concerned has the right to express his view on it before the matter is made final. I do not disagree with what the hon. member for Essex East was saying, but it seemed to me that he did in fact go a little further than he acknowledged when he spoke to the point of order. I hope he will confine himself strictly to the factual content of the statement so that it will not be necessary for me to rise again.


Paul Joseph James Martin: Mr. Speaker, in regard to this policy I am supporting the government. This is a matter that concerns farmers in my area and I propose, subject to the rules of this house, to exercise my right. Every time the hon. member for Essex East rises to discuss an important matter of government policy-


Some hon. Members:: Order.


Paul Joseph James Martin: -hon. gentlemen opposite seem to delight in making his task extremely difficult.


Mr. Speaker:: Order. All hon. members of the house will recognize the force of what has been said and the susceptibilities of the hon. member for Essex East. I trust the hon. member for Essex East does not consider that he is discussing an important matter of government policy because there is no debate. The hon. member is entitled to make limited comment in a non-debating and uncontroversial manner.


Paul Joseph James Martin: I believe that is exactly what I have been doing.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: I know that hon. gentlemen find everything-


Mr. Speaker:: Order. I trust the hon. member for Essex East will proceed with his statement, and that hon. members will listen to him.


Paul Joseph James Martin: I shall be very glad to proceed with my statement, Mr. Speaker, but I do not propose to allow this majority to interfere with my rights as a member of this house.
The policy contained in this announcement is, of course, limited to one year. The government announced that it was going to give a sugar beet policy to the country. Let it be understood that this is not a sugar beet policy, because a policy that is designed for one year only does not take into account the hardships and the problems that confront the sugar beet grower. However, subject to this limitation I welcome the statement made by the Minister of Finance. It will clear the air somewhat. It will enable the farmers to begin their seeding and to plan their acreage program, but I regret that it is only for one year.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, we have listened with a great deal of interest to the statement by the Minister of Finance and the very drastic reaction of the hon. member for Essex East. He seems to take a much longer time on his statements on beets than he does on important statements on wheat.


Mr. Hellyer:: The reverse might be said to be true of you.


Paul Joseph James Martin: Mr. Speaker, when I speak at length I am criticized, and when I speak for a short time I am criticized.


Mr. Hees:: You have a dreadful time.


Hazen Robert Argue: The government's policy of national average prices coupled with deficiency payments has not worked out well for many industries, but to date it seems to have been a reasonably satisfactory policy for the sugar beet industry. At least that is the reaction that has come from the sugar beet growers.
I would have hoped that in announcing this policy the government would have announced a support price, a floor price, rather than a national average price, because very often in practice a national average price does not provide a floor and means lower prices for many producers. However, the sugar beet industry is such that fluctuations in price are not as wide as is the case in other industries. I think this announcement, coupled with the further supplementary guarantees from the government of Ontario and from the sugar beet processors themselves, should work out as a relatively satisfactory policy for one year.
The hon. member for Essex East has said this is not a long term policy. That is correct;

but we are getting a year to year policy from this government, and for the coming year I hope this policy will be extended.


Mr. Speaker:: Order. The hon. member's comment is going far afield.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Siarr (Minisler of Labour):: Mr. Speaker, I should like to make an announcement with respect to the selection of areas eligible for double depreciation under the program announced in the supplementary budget of December 20, 1960.
Hon. members of this house will recall that one objective of this program is to assist new industries in areas where there has been a substantial degree of continued unemployment over the years. Areas which meet the following criteria may qualify under this program. They are broken down into two categories; areas with a labour force of 10,000 and over, and areas with a labour force of less than 10,000. In those areas where the labour force is 10,000 and over the criteria are first, the area must have been classified by the Department of Labour in a surplus labour market category for 75 per cent or more of the 48 summer months from May to October, 19531960. Second, industrial employment must have declined over the period 1953-1960.
Areas with a labour force of less than 10,000 must have been classified by the Department of Labour as in a surplus labour market category for 50 per cent or more of the 48 summer months May to October, 1953-1960. Second, industrial employment conditions must have generally deteriorated over the years.
Areas which qualify will be termed surplus manpower areas. These areas will have the same boundaries as labour market areas served by the national employment service local offices. Localities, as distinct from larger areas, which qualify will be termed surplus manpower localities. These, in most cases, will have the same boundaries as municipalities.
The term "surplus labour market category" used in the criteria, I might explain, has reference to the classification of labour markets which has been published monthly in the Labour Gazette by the Department of Labour since 1953.
Applications may be made by municipal authorities wishing to be considered for designation as a surplus manpower area or locality under this program. Examples of areas and localities which might qualify under this program are Springhill, Elliot
Inquiries of the Ministry Lake and certain localities in Cape Breton. The applications would be made to the Department of Labour, which would undertake the necessary investigations, in cooperation with the national employment service, to determine whether the areas and localities meet the required criteria. Based on the findings of these investigations, the areas and localities which qualified would be designated by the governor in council.


Paul Joseph James Martin: This announcement, while by no means complete as far as the needs of this problem are concerned, is nevertheless welcome. It is also, I suspect, an answer to the prodding which has taken place from this side of the house since the announcement of this policy last December.
On December 20 the Minister of Finance, in the only reference he made to unemployment, said the government proposed to embark on a program of double depreciation to assist in the relocation of industry and to encourage industry in depressed or chronically underemployed areas. However, no announcement concerning detail has been forthcoming until today.
Much time has been wasted, during which industries and municipalities affected might have been encouraged to take preparatory steps to enable them to take advantage of this particular provision. These steps might have been begun two months ago, and the delay is especially to be regretted when we bear in mind that there is no legislation requiring amendment in this house before the government could act or before municipalities or industries could seek to take advantage of this provision.


Mr. Benidickson:: All we needed was an order in council.


Paul Joseph James Martin: Yes. The Minister of Finance had indicated that only after there had been a full discussion of the budget could we anticipate any formulation of policy, or certainly any declaration of policy. The details announced by the minister will have to be carefully examined. At first glance they do not seem to cover all the details that municipalities or companies will want to consider in their assessment as to what advantage they may derive from this policy. No reference has been made by the Minister of Labour to the criteria which apply in similar circumstances in the United States and Great Britain. What is the required percentage of unemployed in terms of the total work force? Is it to be 5 per cent as it is in the United States, or 4 per cent as it is in Great Britain? Having in mind that our unemployed population represents 10.2 per

Inquiries of the Ministry cent of our total work force, what is required in that regard before a municipality may take advantage of this provision?
Finally, I think that to require the municipalities to make an application is not in the best interests of the efficient operation of this program. The government should designate on the basis of its own determined criteria what are depressed areas, what are distressed areas and what are areas of chronic unemployment in Canada. Having determined that, the government should advise the municipalities of this fact so they may be made aware forthwith of the advantages which this plan proposes to offer them. I suspect there will be much delay as a result of imposing upon the municipalities an onus for action which I believe should rest on the government.


Mr. Frank Howard (Skeena):: Mr. Speaker, hon. members and the public generally I am sure will recall that in January of 1958, before that eventful election day, hon. members of the C.C.F. were advocating something of this nature, foreseeing the complications that would arise in our economy under a Tory government. We are thankful that even though it is three or four years late a step is now being made in this direction. It is unfortunate that the minister did not deal with the relocation of industries and employees in areas of chronic unemployment and that the previous government had not the acumen to foresee this problem.
I understood from the statement that the onus is on the municipalities to make application. This is an inadequate approach. In addition to the provision relating to applications, the Department of Labour with its extensive facilities should undertake, if it has not already done so, surveys of areas it considers depressed, designate them as such and institute plans of this nature for those areas without the necessity of application being made.
A couple of weeks ago we were promised that the labour estimates would be dealt with quickly. It is now necessary for them to be called immediately in order that we may examine the details of this plan and see whether it meets the problem.

On the orders of the day:


Hon. Lionel Chevrier (Laurier):: May I
direct a question to the Minister of Labour arising out of the statement he made a while ago concerning double depreciation. It was not possible for me to follow too closely, but before an area can qualify under the criteria mentioned by him must an application be made by the municipality concerned?


Michael Starr: That is correct, Mr. Speaker.


Mr. W. H. McMillan (Welland):: Mr. Speaker, I would like to direct a question to the Minister of Labour. I believe he has given two examples of areas in Nova Scotia where double depreciation would apply. Since the regulations seem to be restrictive, I wonder if he could give one or two examples of areas in Ontario where this would apply apart from Elliot Lake.


Mr. Speaker:: Order. Perhaps the minister is in a position to answer that question, but it seems to me this is a subject matter which the house will be discussing, and the hon. member's questions might well be directed at that time.


Paul Joseph James Martin: Mr. Speaker, in view of the great importance of this matter it would seem that the question put by the hon. member for Welland was a fair one. Perhaps the minister, since he has the information before him now, would not only reply to the question but would list all the depressed areas which the government has in mind as qualifying for this kind of assistance.


Michael Starr: Mr. Speaker, I was prepared to answer the question but the hon. member for Essex East has of course delayed that answer by getting to his feet. Mr. Speaker, I can only repeat what I have said in this statement. I read it very slowly and carefully, but I will read it again. It reads as follows:
Examples of areas and localities that might qualify under this program are Springhill, Elliot Lake, and certain localities in Cape Breton.
These have not been determined yet but as this criteria is set out these might qualify. As regards municipalities in Ontario or any other place in Canada, of course applications will be received from the municipal authorities. If the hon. member for Essex East feels that Windsor comes under these criteria then I wish he would say so, in order that it will help the municipal authorities there.


Paul Joseph James Martin: Mr. Speaker,
since the hon. gentleman has directed his question to me may I ask him if he does not think it is the duty of the government of Canada, particularly a government that said it would resolve unemployment, to decide if the city of Windsor or any other community in Canada in the judgment of the government deserves to receive this kind of assistance?


Michael Starr: Mr. Speaker, since the member for Essex East does not know whether or not Windsor would qualify under this criteria, I might point out that this government will fulfil its obligations to the fullest if, upon the application of Windsor and following a complete investigation, it is found that it does comply with these criteria. The designation will then be made.


Mr. Speaker:: Is the hon. member for Welland rising on a supplementary question?


William Hector McMillan: I would like to direct a supplementary question to the Minister of Labour. In all cases does the calculation go back to 1953?


Michael Starr: The criteria set out provide that with a labour force of 10,000 and over, an area must have been classified by the Department of Labour as being in a surplus labour market category for 75 per cent or more of the 48 summer months, May to October, from 1953 to 1960.


Frank Howard: I wish to direct a further question to the Minister of Labour based upon this statement. I would like to ask him whether he or the government has considered the fact that there are some areas in Canada that are not in fact included in municipalities but which might be declared as distressed areas. What is the situation in this regard?


Michael Starr: Mr. Speaker, as I said in my statement there will be two types of applications, one on behalf of surplus manpower areas; the other on behalf of surplus manpower localities. A surplus manpower area takes in the same boundaries as the labour market areas served by the national employment service local offices.


Paul Joseph James Martin: Mr. Speaker, may I ask the Minister of Labour whether he can tell the house if there is any requirement, before a municipality can qualify for the application of double depreciation, in regard to the percentage of unemployed in terms of the work force; for instance, would a city like Cornwall, where the unemployed population is well over 10 per cent, be able to qualify for assistance?


Michael Starr: Mr. Speaker, any area or locality can qualify if upon application it is ascertained by proper investigation by the Department of Labour and the national employment service that the area qualifies as set out under the criteria that has been set up.


Hon. J. W. Pickersgill (Bonavisla-Twil-lingaie):: I would like to ask the Minister of Labour what advantage the government feels 90205-6-163
Inquiries of the Ministry there is in putting municipalities to the inconvenience of making these applications.


Michael Starr: Mr. Speaker, the advantage is that should an area qualify, there would be the possibility of an industry locating in that municipality or area.


Paul Theodore Hellyer: Mr. Speaker, I would like to ask a supplementary question.


Mr. Speaker:: I do not propose to allow any more supplementary questions. The minister's original statement was discussed at some considerable length and there have been at least six questions allowed. Undoubtedly there will be an opportunity to debate the matter, and I think it would be improvident for the house to take more time or to debate the matter any further on orders of the day.


William Moore Benidickson: Mr. Speaker, I should like to address a question to the Minister of Finance. Since December 20, 1960, when the minister indicated to this house that he had proposals with respect to double depreciation relating to chronic unemployment, has the minister taken any steps by regulation or otherwise under section 11 (1) (a) of the Income Tax Act to provide double depreciation for industries that might be in areas of chronic unemployment?


Donald Methuen Fleming: Mr. Speaker, I do not know whether the hon. member was in the house earlier this afternoon. An announcement on this subject was made by my colleague the Minister of Labour.


William Moore Benidickson: Mr. Speaker, I was in the house. I think the information given by the Minister of Labour in no way relates to the question I have raised. I believe the question is properly advanced to the minister who recommends amendments to this house, if necessary, to the Income Tax Act.


Donald Methuen Fleming: Mr. Speaker, the hon. member referred to areas of what he called chronic unemployment. That was the substance of the statement made by my colleagues this afternoon. Was there something more than that in the question?


Paul Joseph James Martin: The hon. member asked whether you had passed the required order in council.


William Moore Benidickson: My question was, has the Minister of Finance, who I assume would be the minister advancing amendments which concern the public, through orders in council, under section 11 (1) (a) of the Income Tax Act, since December 20 last recommended

Inquiries of the Ministry or provided regulations that in any way fulfil the declaration asserted in his supplementary budget speech of December 20, 1960?


Donald Methuen Fleming: Mr. Speaker, I think the hon. member will have to be more specific if he wants a more specific answer than the one I gave a moment ago. If he will be specific, I will endeavour to be equally specific in my answer. At the moment he has referred to a statement made in the supplementary budget speech of December 20, concerning the application of double depreciation to new industries located in areas of what he called chronic unemployment. I have drawn attention to the fact that this was the subject to which my colleague the Minister of Labour addressed himself in the statement he made this afternoon, which was followed by many questions.


William Moore Benidickson: Mr. Speaker, when I used the words "chronic unemployment" I was of course using words used by the Minister of Finance on December 20.


Mr. Speaker:: Order. The hon. member is inquiring about regulations which may have been made under a statute. I would think that if regulations had been made, the information would be equally available to all members of the house when those regulations were published. In any event, the hon. member has made three attempts at the question and I think we might proceed to other business.


William Moore Benidickson: Mr. Speaker, I think you will agree-


Mr. Speaker:: Order. Is the hon. member rising on a point of order?


William Moore Benidickson: Yes, I am rising on a point of order, sir. I think you will agree that not all orders in council are made available either to the public or to members of the House of Commons. The Minister of Finance has the opportunity, under section 11 (1) (a) of the Income Tax Act, to carry out what he indicated would be done on December 20, 1960. This kind of information is not available to us all.


Mr. Speaker:: Whether it is or not, the hon. member has had three opportunities to elicit information, and it seems to me that the matter has-


Lionel Chevrier: We have a right to know whether anything has been done.


Mr. Speaker:: -had sufficient time to be dealt with.


John Whitney Pickersgill: On a point of order, Mr. Speaker, surely hon. members of this house are entitled to know from a minister whether

an order in council has or has not been passed pursuant to an act of this parliament. That is what the hon. member is asking.


Mr, Speaker:: Hon. members are entitled to ask the minister whether an order in council has been passed. The question has been asked three times without clarification of the question or the answer; I am not sure which. My point is that we should pass to some business which we can deal with effectively. We will pass to orders of the day unless there is any other question to be asked.


Paul Joseph James Martin: Mr. Speaker, I wish to pursue the point of order with which you have just dealt. The hon. member for Bonavista-Twillingate-


Mr. Speaker:: Order. The point of order has been dealt with. It is a matter of discretion for the Chair as to how many supplementary questions will be permitted. I have already exercised considerable patience so that the hon. member for Kenora-Rainy River could receive an answer. I think enough opportunity and latitude has been given the hon. member, and he must accept my decision.


Paul Joseph James Martin: Mr. Speaker, I seek to ask the Minister of Finance a question on this vitally important matter. Has the government passed an order in council in any further-


Mr. Fulton:: On a point of order, Mr. Speaker, is it not a fact you have just ruled that sufficient supplementary questions have been asked on this matter, and is not the hon. member seeking to disregard your ruling?


Mr. Speaker:: I think the Minister of Justice has taken a very appropriate point. Having limited the hon. member for Kenora-Rainy River, it would be quite unfair if I were to allow the hon. member for Essex East to pursue the matter.



BUSINESS OF THE HOUSE


Right Hon. J. G. Diefenbalter (Prime Minister):: Mr. Speaker, several members
have asked me what are the general plans with reference to adjournment at Easter, as they would like to know well in advance. Whether it be in the form of a motion later or now without a formal motion, by consent of the house, having regard to the fact that in 1959 the house adjourned from March 25 to April 6 and in 1960 from April 13 to April 25, I suggest that at the conclusion of the sitting on Wednesday, March 29, the house might stand adjourned to resume on

Monday, April 10. That is the general idea and suggestion that the government has to offer.


Mr. Speaker:: If the proposal made by the Prime Minister is unanimously acceptable, it might be accepted now and made an order of the house.


Lionel Chevrier: Mr. Speaker, I suggest that the motion be made at once. So far as we are concerned, we are willing to accede.


Mr. Speaker:: It seems that all members of the house are agreeable to the proposal made by the Prime Minister, and by unanimous consent the order might now be made that when the house adjourns on Wednesday, March 29, it shall stand adjourned until Monday, April 10. Is it agreed?


Some hon. Members:: Agreed.



CIVIL SERVICE ACT

Donald Methuen Fleming: for leave to introduce Bill No. C-71, respecting the civil service of Canada.
Motion agreed to and bill read the first time.



COMMONWEALTH CONFERENCE


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, the Prime Minister indicated the other day that he would be in a position to make a statement today with regard to some aspects at least of the forthcoming prime ministers' conference in London. I am referring particularly to the Canadian delegation.


John George Diefenbaker: Mr. Speaker, I do not recall that I said I would do so today. I am not in any way challenging the statement, but I am unable to make a statement today. I will do so tomorrow morning.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Justice. Has the minister any comments to make with respect to the tabling by the premier of British Columbia in the legislature of that province yesterday of a
90205-6-163J
Inquiries of the Ministry first report from the British Columbia energy board which recommended delay in the ratification of the Columbia development treaty until certain essential facts are known?


Edmund Davie Fulton: Mr. Speaker, I have received information to the effect that such a report was filed by the premier of British Columbia in the legislature of that province yesterday, but I do not yet have a copy of the report although I have asked for one. Under the circumstances I think it would be inappropriate to comment on the report because I am unaware of its full contents or effect.
Furthermore, I think the house will realize that this is a report by the British Columbia energy board to the British Columbia government, and it seems to me that before commenting it would also be appropriate to know the attitude of the government of British Columbia, because I do not think we should otherwise comment on a report of a provincial agency.
In this connection, of course, I must say that I, and I am sure all other hon. members as well, feel some sympathy for the British Columbia government with regard to the position in which it has been placed.
All members will be aware that the discussions with British Columbia and the negotiations for the treaty lasted for two years; that in those negotiations British Columbia was fully associated; that the premier and other members of the government of British Columbia made statements from time to time to the effect that as soon as a treaty was signed they would be glad to get on with the Columbia river project, and that the treaty itself was signed with the full knowledge and approval of the British Columbia government. I feel, therefore, that they may have been placed in a rather awkward position by the report of their energy board, in view of the fact that for two years they had given study to this matter, and have made public statements that they were fully in accord with the negotiation of the treaty and wanted to get on with the job as quickly as possible.
For these reasons I think that my comments should be reserved until the position of the British Columbia government with respect to this report is known.


Lester Bowles Pearson: I should like to ask the Prime Minister a supplementary question. Does it remain the policy of the government not to bring this agreement before the House of Commons until agreement has been reached with the province of British Columbia?

Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, I think I answered that on an earlier occasion. I am unable to say whether or not the agreement will be brought forward before the event to which the hon. gentleman has made reference.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: Mr. Speaker,
I should like to direct a question to the Minister of National Defence. Will the government follow the lead of the Kennedy administration and the suggestion of the official opposition in this house by adopting measures to strengthen the conventional capacity of the Canadian armed forces?


Hon. D. S. Harkness (Minister of National Defence):: Mr. Speaker, in view of the fact that the forces of Canada are conventional forces it is rather difficult to see how we can do very much more along that line except in improving their equipment, which we have been doing constantly.
I might say, of course, that some two weeks ago in a speech at Toronto I indicated that the utmost degree of flexibility was necessary in Canada's armed forces, and that they must be trained to meet all three general types of wars in which it is possible they may be employed; first, a general nuclear war; second, a limited conventional war and, third, a brush fire war or police action such as we now have in the Congo. The training and organization of the Canadian forces is directed toward the utmost efficiency in meeting any one of these three situations.


Paul Theodore Hellyer: That sounds like a buckshot answer.


Some hon. Members:: Oh, oh.


Mr. Hamilton (Notre Dame de Grace):: You
don't use a rifle to shoot a goose.


Paul Theodore Hellyer: I wonder whether the minister would consider the possibility of stopping the pouring of taxpayers' money into the Bomarc sinkhole and using it for-


Some hon. Members:: Order.


Mr. Speaker:: Order. I think the hon. member might reserve that remark for the debate when it occurs.



INQUIRY AS TO ALLOCATION OF NEW INTERCEPTOR AIRCRAFT

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: I should like to direct a question

to the Minister of National Defence. Would he comment on a Canadian Press report this morning to the effect that if a new interceptor is obtained from the United States it will be delivered only to the five remaining squadrons of the R.C.A.F. used now for continental air defence.


Mr. Speaker:: Order. I think the Leader of the Opposition is asking a rather hypothetical question on a matter of fairly broad policy, and I do not know how it can be dealt with on the orders of the day.


Lester Bowles Pearson: Mr. Speaker, it is a very specific report to the effect that the nine R.C.A.F. squadrons are to be reduced to five and any replacement of equipment for these squadrons will be allocated only to the five.


Douglas Scott Harkness: I think it is a generally accepted rule of the house that comment is not made on these newspaper articles, which are usually of a speculative character. However, the hon. member will recall that on February 9 last, in reply to a question, I referred to statements made by my predecessor in office concerning the phasing out of the CF-100 aircraft. At that time I said that four of these squadrons would be phased out in an ordered program during 1961.
I can now tell the house that the four squadrons and their dates of disbandment are as follows: 425 squadron, St. Hubert, May 1, 1961; 410 squadron, Uplands, June 1, 1961; 433 squadron, North Bay, August 1, 1961; 416 squadron, St. Hubert, October 1, 1961.



PETAWAWA


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver Easi):: Mr. Speaker I would like to ask a specific question of the Minister of Finance. I want to ask this question because I am interested in knowing whether full recreation facilities are available to the armed forces, and because I have been asked to obtain this information. I would like to ask the Minister of National Defence, in view of the moneys spent over the years at Camp Petawawa for a fish pool, a yacht club and a golf course, whether there are any further recreational developments planned, such as a cricket pitch.


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


Mr. W. F. Matihews (Nanaimo):: Mr. Speaker, I should like to address a question to the Minister of National Defence. Is there a Sergeant Bilko on the payroll at Camp Petawawa?


Mr. Speaker:: Order. I assume that the hon. member has not given notice. His question might go on the order paper with the question asked by the hon. member for Vancouver East (Mr. Winch).



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Frank Howard: I should like to direct a question to the Minister of Justice, of which I have sent him notice. Is the minister able to report to the house the results, if any, of the investigation into the so-called Eccles divorce case, which was referred to the Department of Justice by the miscellaneous private bills committee during the last session and subsequently referred to the department of the attorney general of Ontario?


Edmund Davie Fulton: As
the hon. member has pointed out, this matter was referred by us to the attorney general of Ontario, and since the initial reference certain further investigations into some aspects of the case are being conducted. The results of those investigations will in turn be brought to the attention of the department of the attorney general of Ontario. As my parliamentary secretary indicated to the house on December 7, 1960, this matter relates to the administration of justice in the province.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I wish to direct a question to the Prime Minister. Last Monday the hon. member for Essex East asked the Prime Minister if he was in a position to inform the house when we may expect to receive the report from the royal commission appointed to investigate the automobile industry. The Prime Minister's reply was to the effect that he would communicate with Dr. Bladen. I wonder if he now has anything to report in view of the failure of Canada's compact automobiles-


Mr. Speaker:: Order. I was not clear for a moment as to why the hon. member was repeating the former question, but I think his final remark probably illustrated his purpose, and it does not appear to me to be in order.


Hubert Badanai: I wish to direct a question to the Prime Minister. I should like to ask him whether he has succeeded in communicating
Inquiries of the Ministry with Dr. Bladen about the report concerning the auto industry. If so, has he a report to make to the house?


John George Diefenbaker: The information I have at the moment is that Commissioner Bladen will be reporting some time during the present month.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Guy Rouleau (Dollard):: I should like to direct a question to the Minister of National Health and Welfare. Has the minister seen the report by several members of the medical profession, which appeared yesterday in many leading United States newspapers, to the effect that there seemed to be a doubt about the value of Salk vaccine? If so, has the minister any comment to make?


Hon. J. W. Monieifh (Minister of National Health and Welfare):: Mr. Speaker, I have not seen the report to which the hon. member refers. However, I should stress that we have no evidence along the lines that would seem to be indicated in this story. In fact, Salk vaccine in Canada has been up to 95 per cent effective in cases where the dosage was given as directed. Production and use of the vaccine has always been carried out under the strictest control.
I understand that the opinions voiced in the United States are, at best, only those of a small minority, and that the American Medical Association has reaffirmed its support of the Salk program. I should point out also that all vaccine is tested before release by my department's laboratory of hygiene.


Paul Joseph James Martin: May I ask a
supplementary question, based on the minister's statement concerning the production and testing of Salk vaccine in Canada. Is it not a fact that not only the Connaught Laboratories but the institute of microbiology in Montreal carries on a test program after production, and that there is likewise a testing of samples at the laboratory here in Ottawa?


Jay Waldo Monteith: Yes, that is correct, Mr. Speaker.



BARBITURATES


[Stage Direction]
On the orders of the day:
Jay Waldo Monteith: Mr. Speaker, yesterday the hon. member for Outremont-St. Jean

Inquiries of the Ministry asked whether a representative of the department would be attending a meeting tomorrow called by the mayor of Montreal to discuss illegal traffic in barbiturates.
An invitation has been received by the food and drug directorate and has been accepted by the assistant director of inspection and enforcement services. The directorate's chief inspector in Montreal also plans to attend.



REPRESENTATIONS RESPECTING RESTRICTIONS ON U.S. TOURIST IMPORTS

[Stage Direction]
On the orders of the day:
Mr. J. R. Garland (Nipissing):: I should like to direct a question to the minister of northern affairs. In view of the fact that Canadian tourists spend approximately $100 million more in the United States than United States tourists spend in Canada, and the fact that Canada is the United States' best customer, can the minister say what representations have been made to protest the proposed reduction to $100 in the amount of tariff free merchandise United States tourists will be allowed to take into their country from Canada?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, the government is very much aware of the importance of the tourist industry. I can assure the hon. member that all possible steps have been taken to assure that this industry shall continue to make its contribution to the economy of this country.


John Richard Garland: May I ask a supplementary question. What action has the government taken to determine the actual loss in spending by United States tourists in this country as a result of the proposed legislation?


Walter Gilbert Dinsdale: Mr. Speaker, that is a hypothetical question. I can only reiterate what I have already indicated, that all possible steps have been taken to assure the effective progress of the tourist industry in Canada. These steps include the opening of a new tourist bureau at San Francisco on the west coast.



CIVIL DEFENCE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: I should like to direct a question to the Prime Minister. Would the Prime Minister care to comment on a report in this morning's Globe and Mail to the effect that the emergency measures organization will conduct an operation to simulate a nuclear attack? This operation, to be known as "Tocsin", is scheduled

for May. Will the Prime Minister say whether the federal ministers will be transported to a secret emergency shelter outside of Ottawa, while the provincial authorities will be expected to evacuate to a make believe headquarters?


John George Diefenbaker: When the government is in a position to make a report in detail with reference to this matter, it will be done. The subject cannot be conveniently discussed at a time like this in answer to a question.


Hazen Robert Argue: May I ask a supplementary question. Has there been a leak in security regulations?


Mr. Speaker:: Order. The hon. member has already had a conclusive answer.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: I should like to direct a question to the Prime Minister. Will the Canadian government establish a peace corps of young Canadians to work side by side with their United States cousins in assisting the people of the less developed countries in their efforts to improve their standard of living?


John George Diefenbaker: Mr. Speaker, the suggestion made by the President of the United States is a most interesting one. Further than that I cannot go.


Paul Theodore Hellyer: May I ask a supplementary question. Would the Prime Minister not agree that this is probably one of the most important steps that could be taken by the west?


Mr. Speaker:: Order. The hon. member is asking a rhetorical question for the purpose of stating a point of view, and I do not believe it is proper to argue the point.


Paul Theodore Hellyer: May I rephrase the question, Mr. Speaker? Will the Prime Minister give this important matter-


Some hon. Members:: Order.


Paul Theodore Hellyer: -immediate consideration, since he undoubtedly will feel this proposal is deserving of immediate co-operation and Canadian participation?


Mr. Speaker:: Order. The hon. member is entitled to ask whether consideration will be given to a matter, but not to repeat his positive statement.

Mr. Hellye r: Does the Prime Minister not intend to reply, and indicate to the house whether or not he will give this matter favourable consideration at a later date?


John George Diefenbaker: I think the question and the statement made by the hon. member do not deserve any further reply than has already been given.


Paul Theodore Hellyer: I am sure the people of the underdeveloped countries will be glad to hear that.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: I should like to direct a question to the Minister of National Revenue. While it may seem to be an apparent travesty as a matter of urgent national importance, Mr. Speaker, I should like to assure you it seems important in my part of the country. Can the minister give us a definitive statement from the C.B.C. on the position of affiliates to its network in so far as Big Four football telecasts in 1961 are concerned? Second, has the C.B.C. considered the telecasting of Canadian intercollegiate games over its network in 1961?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I realize that this problem is of interest to many Canadians. However, it is an involved and complicated one. There are various factors which I do not have time to enumerate here. I cannot give any definitive statement on it today or for some reasonable time in the future, because it is being given careful consideration and study by the corporation. When a decision has been reached and arrangements worked out, if any, I will then be in a position to make a statement to the house.



INTERNATIONAL SERVICE


[Stage Direction]
On the orders of the day:
George Clyde Nowlan: Mr. Speaker, the other day the hon. member for Bonavista-Twillingate asked me a question with respect to the possibility of alternative employment for those employees of the C.B.C. employed in the shortwave service.
I am advised that several of these employees have been transferred to other appointments in the national service. The corporation is giving careful consideration to this matter and is endeavouring to appoint as many as possible if not all, in the national
Inquiries of the Ministry service. The curtailment of the short wave service is scheduled to take place on March 31.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, for the information of the hon. member for Skeena, who asked a question yesterday on orders of the day having to do with the discontinuation of employment of a number of waitresses in a certain restaurant in Ottawa, and stating that they were unable to obtain employment insurance benefits by reason of the activity of the employer in the first instance, I might say that officials of the unemployment insurance commission are investigating this situation in order to find out whether the four girls were fired or resigned and are eligible for insurance or not. Their departure followed the dismissal of a hostess.
Adjudication in this case will take place in Toronto. An officer of the Ottawa office is sending a factual report of this occurrence to the Toronto office today. Among the questions to be adjudicated is the question of whether the girls were fired or whether they resigned. In either case, Mr. Speaker, there must be a determination of the cause leading up to the incident in question before the question of eligibility can be resolved.



INQUIRY AS TO TRAINING OF UNEMPLOYED IN ONTARIO

[Stage Direction]
On the orders of the day:
John Richard Garland: Mr. Speaker, I should like to direct a question to the Minister of Labour. In respect to the vocational training legislation passed at this session of parliament, has the minister's attention been drawn to the charge by Metro chairman Gardiner that Ontario is trying to "shuffle off" on the municipalities the responsibility for training the unemployed. In view of this great difficulty, would the minister comment on the progress being made in this field?


Michael Starr: Mr. Speaker, my information is that there are many plans that will be put into effect. As far as the actual initiative for the organization of these programs is concerned, as a federal government we can only deal with the provinces. We have no intention of interfering in the situation as between the provinces and the municipalities. We have provided the incentive; it is up to them to take up the program.

Inquiries of the Ministry NORTHERN AFFAIRS



INQUIRY AS TO CARGOES LOST AT SEA

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Minister of Northern Affairs and National Resources. Has any cargo being transported by his department in the northern parts of Canada been lost at sea recently?


Walter Gilbert Dinsdale: Mr. Speaker, I received no notice of this question. I will have to take it as notice and bring in an answer at a later date.
(Translation):



AIRPORTS


[Stage Direction]
On the orders of the day:
Guy Rouleau: I should like to put a question to the Minister of Transport. In reply to a question put to him on February 14 last, concerning the transportation by the C.N.R. of air passengers between Dor-val airport and downtown Montreal, the minister said that he would pass on the suggestion to the C.N.R. management.
In view of the interest shown in this matter by my constituents and by the passengers in general, may I ask the minister whether he has made representations to the railway authorities and, if so, whether he has anything to report to the house on this subject?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, the suggestion made by the hon. member for Chambly-Rouville (Mr. Johnson) has in fact aroused a great deal of interest. Many articles have appeared in the press on this matter. After he put his question to me in this house, I got in touch immediately with the railway authorities and asked for a report. I expect that report at any moment.


Guy Rouleau: Could the minister make a statement during his forthcoming visit to the constituency of Dollard?
(Text):



FORESTRY


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, may I ask the Minister

of Forestry whether his department is making any progress in finding a means of arresting the Dutch elm disease.


Hon. H. J. Flemming (Minister of Forestry):: Mr. Speaker, I have no knowledge of this matter, but I will take the question as notice.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Rea in the chair.

[Stage Direction]
Resolved that it is expedient to introduce a measure to amend the customs tariff and to provide:
1.	That the said act be amended by adding thereto immediately after section 2 thereof the following section:
"2A. (1) For the purposes of this act, goods shall be deemed to be of a "class or kind" made or produced in Canada if
(a)	in the case of goods other than goods custom-made to specifications, goods of approximately the same class or kind are made or produced in Canada; and
(b)	in the case of goods custom-made to specifications adequate facilities exist in Canada for the economic production of such goods within a reasonable period of time.
(2)	Notwithstanding subsection (1), goods other than goods custom-made to specifications shall be deemed not to be of a class or kind made or produced in Canada unless at least 10 per cent of the normal Canadian consumption of goods of the same or approximately the same class or kind are made or produced in Canada.
(3)	The decision of the minister shall be final with respect to the following matters:
(a)	the normal Canadian consumption of the goods described in subsection (2), and
(b)	whether goods are custom-made to specifications, and whether adequate facilities exist in Canada for the economic production of such goods within a reasonable period of time."
2.	That subsections (9) and (10) of section 6 of the said act be repealed and the following substituted therefor:
"(9) For the purposes of this act, notwithstanding section 2A, goods may be deemed to be of a class or kind not made or produced in Canada where similar goods made or produced in Canada are not offered for sale to the ordinary agencies of wholesale or retail distribution or are not offered to all purchasers on equal terms under like conditions, having regard to the custom and usage of trade."
3.	That subsection (4) of section 6A of the said act be repealed.
4.	That any enactment founded upon this resolution shall be deemed to have come into force on the 21st day of December, 1960, and to have applied to all goods mentioned therein imported or taken out of warehouse for consumption on or after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day.
Lester Bowles Pearson: Mr. Chairman, from time to time now, over a considerable period, we have returned in committee to this resolution, the discussion of which seems to have caused some impatience in the minds of certain ministers who are, of course, anxious

to get it through. I have no apology to make for contributing, though it will only be for a few minutes, to this discussion.
It has been suggested to us by the Minister of Finance that it is only a small resolution. It is a small resolution but it is one with big implications, implications which extend to the fundamental principle of parliamentary control over taxation. The debate which has already taken place on this resolution has also served to show the historic difference between the two national parties on this whole issue; between a policy of maximum possible trade and a policy of maximum possible protection. No misrepresentation, no distortion of the historical or the contemporary record, can conceal the difference between the two parties in that regard. The record of that difference can be found in the columns of Hansard since 1870.
In earlier parliamentary days there was a straightforward admission of that difference, but now it is not so easy to get exposures by hon. gentlemen opposite of this diversity of approach. Changes are made now, not openly but by subterfuge or, in the language of my hon. friend from Bonavista-Twillin-gate, by adopting a sly and furtive approach to these matters.
Before I outline very briefly our position in respect of the proposed resolution and its effect on our tariffs I should refer to what the Minister of Finance has told us more than once about the purpose of this resolution. Perhaps the briefest definition he gave of that purpose is to be found reported on page 1667 of Hansard of February 2, 1961:
The purpose of the proposed legislation is to restore the original concepts relating to this phrase "class or kind" after what I described yesterday as a decade of erosion. In doing so we will provide for the first time some effective means of dealing with goods that have been described in this proposed amendment.
The minister then said there had been erosion. What presumably is meant by erosion is that the tariff board, the exchequer court and the supreme court have disregarded the intentions of parliament and limited the meaning which successive governments intended to give to the class or kind provision in the customs tariff. We do not agree that this so-called erosion has taken place. The government, we claim, has completely failed to show that any significant difference existed over the years between the interpretation given by the customs administration and by the tariff board. In fact we have shown that in many cases cited by the minister the tariff board has actually upheld the customs administration. I think it is correct to say that in all appeals to the courts from the board, save one, the board was sustained.
90205-6-164
Customs Tariff
The government claims that this erosion began in 1950, but presumably in making that claim they have forgotten that Mr. Hector MacKinnon was chairman of the tariff board from 1940 to 1957, ten years before, and seven years after this erosion is supposed to have started. How then do they explain this sudden change in Mr. MacKinnon? Surely they would not deny that no man better understands the real meaning of the United States-Canada trade agreement of 1935, or the Customs Tariff and regulations, or the meaning of GATT than Mr. MacKinnon himself.
We say there has been no erosion, and that the government by this resolution is in effect asking for power to change the tariff surreptitiously and indirectly, because if it were done directly and openly it would amount to a breach of our international trade agreements. That would be bad enough, but the government does not intend merely to change the law. By this resolution and by action which, it hopes, will be taken in connection with the bill, the government intends to nullify the jurisdiction of the tariff board and the courts and to vest absolute power in the Minister of National Revenue over an important field of the Canadian economy.
It is difficult to get an exact estimate of the amount of trade that would be involved in the application of this amendment, though we have tried to extract it from the minister, I believe, during this debate. It has been estimated that more than $200 million worth of imports would be involved annually and, therefore, a very important sector of our trade would be affected.
The government in this matter is in effect giving the Minister of National Revenue the power to decide without any review or appeal whether the duty on a great number of potential imports

I have used the figure of $200 million-will be high or low. Is it to be 7J per cent or is it to be 22 per cent?
As has been pointed out in this connection, the Liberal government in 1936 clarified the meaning of "made in Canada". It became established that an article to qualify must be made in substantial quantities; and "substantial", as we know, was later defined by order in council as 10 per cent of consumption, with an appeal from that determination to the tariff board and to the courts.
In 1958 changes were made in the dump duty which in many important respects was put under the discretion of the minister. Now the determination of "made in Canada" which is necessary for the application of this dump duty is also to be put under ministerial discretion. From that decision, in respect of certain matters where discretion is given, there is no appeal. There is not even any provision

Customs Tariff
for informing the public when a decision is made, or the terms of that decision. The amendment is perfectly clear on that point. Subsection 3 reads as follows:
(3) The decision of the minister shall be final with respect to the following matters:
(a)	the normal Canadian consumption of the goods described in subsection (2), and
(b)	whether goods are custom-made to specifications, and whether adequate facilities exist in Canada for the economic production of such goods within a reasonable period of time.
Decision in regard to these matters is given to the minister without appeal and without publicity. Therefore an article in this particular category now becomes made in Canada if the minister determines it to be so, and there is no appeal from that determination. It is this denial of access to the courts, an access which now exists, that is our most fundamental objection to this proposed amendment. I know that the minister in his statements on this matter to the committee has attempted to explain away this denial in terms which he considers to be satisfactory. For instance, on February 27 as reported at page 2460 of Hansard the minister said:
The right of appeal is taken away from no one. The most that can be said-
-and this is a lot-
-is that the right of appeal cannot be invoked on grounds that lie within the three points on which the Minister of National Revenue is given the right to make the final decision.
The right of appeal is taken away from no one, but it cannot be invoked in respect of those three matters the minister mentioned. I consider that mere sophistry. We on this side of the house do not understand how a government which is headed by a Prime Minister who sponsored the bill of rights can justify taking away from the taxpayers the right of access to the courts in matters in which they have enjoyed such access over the years.
If the Minister of Justice were present in the committee I would put this question to him. In any event, I shall place my question on the record. I ask the minister whether he has done what he is required to do, that is examine these particular amendments in relation to the bill of rights. The hon. gentleman is required to do this under section 3 of the bill of rights, which reads:
3. The Minister of Justice shall, in accordance with such regulations as may be prescribed by the governor in council, examine every proposed regulation submitted in draft form to the clerk of the privy council pursuant to the Regulations Act and every bill introduced in or presented to the House of Commons, in order to ascertain whether any of the provisions thereof are inconsistent with the purposes and provisions of this part and he shall report any such inconsistency to the House of Commons at the first convenient opportunity.

I assume that in due course we will get that kind of report from the Minister of Justice which he is required to make under the bill of rights.
That is our basic objection, that the government, in effect, is vesting in a single minister of the crown in certain important matters absolute power to fix the rate of tax which taxpayers will be called upon to pay. We consider that this is arbitrary power. In response to the statement that this is arbitrary power, the Minister of Finance on February 27, as reported at page 2460 of Hansard, replied:
These are not arbitrary powers at all. These are necessary powers in the transaction of the business of this country.
That is another subtle distinction. Our view is that if the rate of tax is to be changed it should be changed in a straightforward way by parliament, and not left to the uncontrolled decision or whim of a minister of the crown as could be done if this resolution were translated into law. We do not think this kind of change is needed at all. We believe it will be not advantageous but detrimental to the Canadian economy, and that by increasing the costs of machinery for production, for instance, it will be particularly harmful to industries which are seeking to expand and modernize in order to improve their competitive position in an increasingly competitive world.
If the government, however, is determined to make these changes in the definition of "goods of a class or kind made in Canada" no doubt its majority will permit it to do so, but we feel we have an obligation to do our utmost to stop the government from taking away the fundamental right of access to the courts which the taxpayers now enjoy in respect of certain matters dealt with in the resolution. No valid reason has been given for denying in future the right of appeal which now exists, and there is every reason for asserting it when it is proposed to give far-reaching powers over the expansion and modernization of industry to a single minister of the crown. That is the basic issue before parliament in this resolution.
We also oppose this measure because it seems to us to be an indirect method of evading our international obligations to our trading partners which is neither honourable, wise nor prudent. Surely if this resolution becomes law it will constitute an invitation to other countries to retaliate against our exports, and the losses to our trade are likely to greatly exceed any small and problematical gains in direct employment.
To sum up, we feel the resolution is wrong. It is dangerous, and should be withdrawn. But if the government will not withdraw it

we appeal to the government to at least abandon its intention of denying the taxpayers the access which they now have to an independent tribunal to review the arbitrary tax decisions made by a single minister of the crown.
Many years ago, Mr. Chairman, a former prime minister of this country and leader of the Conservative party, Mr. Meighen, said, as found at page 3414 of Hansard for 1921:
There should never be an unrestrained discretion in the hands of any minister or any government.
Let me give another quotation from page 4527 of Hansard for June 7, 1955. The paragraph reads as follows:
In conclusion, Mr. Speaker, I say that the issue here is deep-seated, clear-cut and fundamental. It is the issue of the rule of law-
We claim that the rule of law is involved in this resolution as an issue.
-and the preservation of the authority of parliament. It is not simply a matter of the preservation ... of the substance of parliamentary authority and rule. We will have nothing to do with the grant of powers vastly in excess of need . . . Supreme over any all-powerful executive, in our view, must stand the authority of a free, sovereign and independent parliament.
Those are good words, Mr. Speaker. They were uttered at that time by the present Minister of Finance. We ask him to apply this principle now to this particular resolution and to bring forward amendments to the resolution which will implement the principles which he espoused so strongly when he sat on this side.


Donald Methuen Fleming: And you opposed.


Mr. Bell (Carleton):: Mr. Chairman, in his closing words the Leader of the Opposition used a quotation from a speech by the Right Hon. Arthur Meighen. As I listened to the Leader of the Opposition developing his argument this afternoon, I was reminded of another statement made in this house by Mr. Meighen to Dr. Michael Clark. That statement was:
The hon. gentleman has given us an example of the maximum of merit that a speech may reach without the ingredient of logic or the assistance of facts.
Could there be any words more appropriate to describe all the flurry, fluster and fury which the Leader of the Opposition has just emitted? Perhaps there are some Mr. Chairman, and I will use these to describe what the Leader of the Opposition has said: fanciful, fatuous, fantastic, frivolous and farcical.
What has he done this afternoon in following the lead of the hon. member for Bonavista-Twillingate and that of the hon. member for Kenora-Rainy River is to succeed completely in perverting and distorting the 90205-6-164J
Customs Tariff
effect and significance of this resolution. Indeed, sir, in my experience as a member and observer of this parliament I have never heard such extravagance of language, such intemperance and immoderation of argument, and such fatuity of reasoning as have been unleashed against this resolution. In all the amateur histrionics of the hon. member for Bonavista-Twillingate and all the mock heroics of the Leader of the Opposition this afternoon, there has been a total absence of logic, of reasoning. There has been nothing but confusion and distortion.


William Moore Benidickson: He is reading every word.


John Whitney Pickersgill: Would the hon. member permit a question? Could he say who wrote that prose?


Richard Albert Bell: This particular hon. member has no difficulty in writing his own prose and in speaking his own prose at any particular time.


William Moore Benidickson: Could I ask the hon. gentleman whether he wrote it before he heard the argument of the Leader of the Opposition?


Richard Albert Bell: The hon. member for Kenora-Rainy River has demonstrated a sufficient number of times on this resolution that his understanding of the issue is in inverse ratio to his volubility.
Let me try to reduce this whole issue to its basic elements and proceed in the simplest terms and by logical steps, I hope, to analyse what is proposed. The first question hon. members must ask themselves is this. Does parliament believe or does it not believe that goods of a class or kind made in Canada deserve a margin of protection in excess of that granted to goods of a class or kind not so made in Canada? If the answer to that question is no, then the matter rests and the committee should defeat this resolution. But if the answer to the question is yes, as I believe it must be, then we must proceed to the next step. How do we determine what is of a class or kind made in Canada?
Hon. gentlemen opposite pay lip service to the principle of class or kind made in Canada but by their words and by their actions they make a travesty of their professions. The fact is that the modern concept of class or kind made in Canada owes its birth to Sir Wilfrid Laurier, to W. S. Fielding and to Sir Clifford Sifton in the anti-dumping legislation of 1904 and later, to the former two, in the tariff revision of 1907. Indeed, in an editorial in the Winnipeg Free Press on January 18, 1961, an editorial which was an uninformed and fatuous comment on the speech I made on the supplementary budget, that newspaper claimed that Sir Clifford Sifton himself was

Customs Tariff
the draftsman of the original class or kind legislation; and it was alleged that he did so as an escape from the pressures of the iniquitous Tories of those days who were allegedly seeking a general tariff increase. Clearly, what hon. gentlemen opposite have been doing in following the lead of the Winnipeg Free Press is to repudiate Fielding, to undermine the memory of Laurier and to do violence to the principles which were espoused by Dunning and Mackenzie King.
Let me put the question again, sir. How are you to determine what is of a class or kind made in Canada? As has been pointed out by the Minister of Finance and the Minister of National Revenue and as this legislation provides, the answer resolves itself naturally into a division between so-called shelf goods, that is, goods of standard make ordinarily kept in stock, and goods which are custom made to specifications.
I want to deal with them separately. In the tariff there are some 70 items where the rate of duty depends upon whether the goods are or are not of a class or kind made in Canada. Hon. gentlemen opposite, and particularly the Leader of the Opposition this afternoon, seemed to indicate that there were a great many rates that were going to be changed. Actually there are two rates, one rate if it is of a class or kind and one rate if it is not of a class or kind. Of course, as the house knows, section 6 of the Customs Tariff Act imposes dumping duties on imported goods of a class or kind made in Canada if sold for export to Canada at a price less than their fair market value.
Historically, the phrase "class or kind" was broadly interpreted. For over 40 years under a procession of 17 ministers of customs or of national revenue, Grit and Tory alike, the phrase gave little difficulty in interpretation. The broad interpretation may or may not have been correct but at least it has the authenticity of antiquity, the imprint of 17 ministers of the crown. Had there been no change in this interpretation this legislation, or at least the major part of it, would have been unecessary.
The problem of interpretation is clearly set out in Elliott's work, "Tariff Procedures and Trade Barriers", at page 110, from which I would like to quote very briefly:
Many of the classification decisions concerning "class or kind" depend on whether, for the particular articles being considered, that phrase is held to refer to a wide or to a narrow range of goods. Since the Canadian market is small many domestic producers find it convenient to concentrate on producing a relatively few sizes, styles, patterns or types. In some industries the Canadian output is a relatively small proportion of the total Canadian consumption even of the exact types of an article produced in Canada. In more firmly established industries the domestic output forms a large

proportion of Canadian consumption of the exact types produced and, in some, a substantial proportion even of a broader class which includes other substitute products.
There, sir, is the problem and it was met in one way for a period of over 40 years. But in this last decade a new trend has set in, a trend to narrow the phrase. Decisions of the tariff board upset this historic concept. Whether or not these decisions be correct is not the issue. The fact is that the process which the Minister of Finance described as erosion set in.
The best illustration of this is in another quotation from Elliott's book at page 111. I quote:
In allowing an appeal from a decision that certain models of Mossberg .22 calibre rifles were of a class or kind not made in Canada the board cautiously remarked-
This is a quotation from the board decision.
-Dictionary definitions of the word "class" indicates that it is used both for very broad and for very narrow designations, but in the context in which it is used in tariff item 441e it appears to be more or less synonymous with "kind".
Consequently, in interpreting this item the item board has taken cognizance of the more precise designation "kind". Auto-loading rifles are of a kind not made in Canada.


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


Richard Albert Bell: My time is limited, unlike the Leader of the Opposition.


John Whitney Pickersgill: The hon. member can speak as often as he likes. The question I wanted to ask the hon. gentleman was this. Was that a decision of the administration that these were not made in Canada or was it an appeal from a decision that they were not made in Canada?


Richard Albert Bell: I quoted simply from the .22 calibre rifle case to indicate what, in effect, the board had done.


John Whitney Pickersgill: This is merely a factual question that I wanted to ask the hon. gentleman. Was the decision of the administration, not of the board, that they were not made in Canada? The hon. gentleman read a sentence relating to that, and if he would just read it again-


William Moore Benidickson: What was the ruling of the customs department? Was the customs department overruled by the tariff board?


Richard Albert Bell: In this particular case, the tariff board reversed the decision of the department. It is appeal No. 206 of March 17, 1950, and the department was overruled.


William Moore Benidickson: The question I should like to ask the parliamentary secretary is, what had been the made in Canada ruling which was compiled by the customs department up to the time of this appeal? What had been their made in Canada ruling, proclaimed for all in Canada to read?


Mr. Bell (Carlelon):: The department held this to be of a class or kind made in Canada. This decision of the department was reversed, on appeal, by the tariff board.
This brings us to the real core of the issue. In effect, class has been interpreted as synonymous with kind. The phrase is not in any way disjunctive; it is wholly conjunctive and the words are synonymous. Indeed, apparently one of them is redundant.
As I have said, 17 ministers of customs or national revenue took a consistent stand for the broad interpretation of these words. Of these 17 ministers, nine were Liberals. There were such men as these. There was William Paterson, Laurier's minister for 15 years. Oh, yes, there was A. L. Sifton; imagine that. There was the unfortunate Jacques Bureau. There were Georges Boivin, W. D. Euler, J. L. Ilsley, Colin Gibson and J. J. McCann. When my hon. friends opposite attack this legislation, what they are doing is repudiating these great Liberals of other days.


John Whitney Pickersgill: That is just nonsense.


Richard Albert Bell: They are establishing a counterfeit Liberalism which bears no resemblance to their historic tradition. I say, sir, they are shadowboxing on this resolution and that must cause some of the great Liberals of the past, including the Siftons; Sir Clifford and Arthur L., to turn over in their graves.
They say, you are taking power away from parliament. On the contrary, what we are doing by this legislation is restoring it to parliament. In so far as shelf goods are concerned, the 10 per cent rule was adopted as a result of trade negotiations with the United States. But where did the government of Mackenzie King embed that rule? Need anybody in this committee be surprised to find that it was in an order in council, and not in a statute of this parliament? The policy was: deprive parliament of control, make a mockery of this chamber, keep control in the east block so that at any hour the 10 per cent rule could be suspended, amended, altered, done away with, made 15 per cent or 1 per cent by a simple executive act. This was the policy of hon. gentlemen opposite. This is not the Progressive Conservative way. We are placing it in the statute, so that only parliament can
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change it. We are doing this in public, and the anvil of public discussion will assure equity to importers and domestic producers alike.
I should like to deal with an argument put forward by the hon. member for Ottawa West. Of all the fatuous arguments advanced, the suggestion that this legislation infringes the rights of parliament is the most ludicrous. It is the very reverse of the truth.


Lionel Chevrier: This is balderdash.


Richard Albert Bell: The hon. member for Bonavista-Twillingate the other day, and the Leader of the Opposition this afternoon, suggested that this legislation violated the bill of rights. Such extreme and immoderate assertions, sir, can only demonstrate how far hon. gentlemen go in substituting abuse for argument and innuendo for advocacy.
I should like to speak of another class of goods, those described as custom-made to specifications. In this field, each product is unique or virtually unique. If one goes back over the 50 years of history of class or kind or, I am told, if one reviews the statements over those years of the ministers of customs and of national revenue, although I have never had a chance to do so personally, it is clear beyond peradventure that it was never intended by any government that custom-made goods should automatically be ruled as not made in Canada. Yet this is the direction in which the rulings of the department and of the appellate tribunals have gone.
In carrying out the intention of parliament in respect of this class of goods, obviously there must be a broader ministerial discretion than is necessary or appropriate in relation to mass produced or shelf goods. Surely, if parliament has any interest in promoting the manufacture of goods in Canada, the tests proposed by this legislation are reasonable. The tests are that adequate facilities exist in Canada for the economic production of such goods within a reasonable period of time. Each of these phrases, sir, is capable of simple, rational interpretation. I cannot, for the life of me, see how the competent officers of the customs division, and they are highly competent and skilled, will have any difficulty in interpreting in these words what I believe has been the intent of parliament over the years.
I should like now to deal with what the Leader of the Opposition suggested this afternoon was, in effect, the nub of the problem. I refer to the question of appeal from a ministerial decision. I want to suggest to the committee that all the confused argument has been based upon a false premise, namely the premise that the right of appeal from an administrative act is a natural right. The fact is-

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John Whitney Pickersgill: It is an existing right.


Thomas Miller Bell: The fact is that there is no inherent right of appeal except such as may exist indirectly through the prerogative writs.


William Moore Benidickson: We have had it for 25
years.


Richard Albert Bell: I will deal with this directly if my hon. friends will only be quiet for a moment. The right to appeal is a right which must be conferred by statute. The fact is that there are very few administrative acts of government that are subject to any appeal whatever. Every day, and every hour of every day, ministers of the crown as well as other public servants take important and vital decisions which are subject to no review-


John Whitney Pickersgill: Such as setting tax rates.


Thomas Miller Bell: -except by this parliament. My hon. friend from Bonavista-Twillingate sits in his seat and interrupts, but he is too learned an historian-


John Whitney Pickersgill: I would be very happy to stand up and ask the question.


Thomas Miller Bell: I will answer the questions later.
I was going on to say that my hon. friend is too good an historian, and too skilled in the art of government to believe that the right of appeal is the rule. The fact is that it is the exception rather than the rule, and even to be an exception it must be statutory. I should like to refer to the case of Okalta Oils Limited v. the Minister of National Revenue, (1955) Supreme Court Reports, page 824. At page 825 Mr. Justice Fauteux said:
A right of appeal is a right of exception which exists only when given by statute.
This places the matter in perspective, I submit. There is, of course, always the judicial review by means of a prerogative writ such as mandamus, prohibition and certiorari, or the statutory writ of habeas corpus.
Let me turn now to the type of review which has been conferred by statute in the past in respect of customs matters. When, under the Laurier government, the modern concept of class or kind made in Canada was initiated, the determination of class or kind was the responsibility of customs appraisers, subject to review by or appeal to the board of customs.
The board of customs was the final appellate tribunal. This was the tribunal which existed, and the only tribunal, throughout the whole of the Laurier administration and the whole of the first Mackenzie King administration. Sir, what a great appellate tribunal it was. If my hon. friends will look at the

revised Statutes of Canada, 1927, they will find that it had five members: the commissioner of customs, the assistant commissioner of customs and a third, a duly qualified officer of customs, designated by the governor in council. Out of the five members three were customs officers. Then, to get the right degree of objectivity, the other two were the commissioner of excise and the commissioner of income tax, officers of the same department after it became the Department of National Revenue in 1927.
That was the type of appellate tribunal in which the Liberal party believed. From 1904 to 1931, the final court of appeal in respect of class or kind, lay within the department itself. In effect, the department reviewed its own decisions. What a happy, happy situation.
Behind all the utterances of hon. gentlemen opposite those are the facts. If they dare open its pages and examine the report of the royal commission on the customs scandal of 1927-dark pages in the history of Liberalism .-let them read what Chief Justice Brown had to say about this technique of review, and how he recommended it be changed to a board of national revenue. Did the government of Mackenzie King change it? No, they left the respondent as the judge and jury.
Who was it that changed this situation? It was the man for whom hon. gentlemen opposite still reserve their most severe strictures. Changing this was part of the so-called iniquity of the R. B. Bennett government. It was that great Canadian, so slandered and vilified by hon. gentlemen opposite, who sought from parliament the right to create a tariff board which would be a court of record, assuming the quasi-judicial functions of the board of customs and exercising as well the fact finding and advisory powers formerly possessed by the advisory board on tariff and taxation or the so-called Billy Moore board.
It was the Conservative party under the maligned R. B. Bennett which placed appeals upon a proper and legitimate basis.


William Moore Benidickson: Perhaps the hon. member would tell us-


Richard Albert Bell: Would the hon. gentleman just possess his soul in patience?
The committee may be interested in knowing how the Liberal government jettisoned all appeals to the tariff board for a period of four or five years. The story is told in Alex Elliott's "Tariff Procedures and Trade Barriers" to which I have already referred. At pages 60 and 61 it reads as follows:
The terms of two of the members expired in 1943 and the Board no longer had a quorum of two members. Accordingly, until the board was reconstituted the system of informal appeal within

the Department of National Revenue became even more important and was more fully developed. Departmental officials express pride in this informal, cheap, and speedy method of appeal.
So that we see, sir, that over the years the actions of the Liberal party have been very different-very different indeed-from their professions of these last few days, or indeed these last few weeks, from the bombast that the committee has heard and been forced to endure.
The house may be interested in one further quotation from Mr. Elliot's book in respect of appeals. At page 59 Mr. Elliot says this about the enactment of section 43A of the Customs Act in 1937.
At the same time the door was closed to appeals for refunds of duty previously exacted by inserting a new section (43A) which validated all official valuations that had been made and confirmed the duties collected under them.
I repeat, sir, the door was closed to appeals.
We now see how genuine, how real are the professions of my hon. friends opposite. Not only were they content to take away the right of appeal, but they retroactively deprived prospective appellants of rights which had vested. I suggest they be judged by their acts and not by their expostulations or their professions.
Now, sir, are there statutes where the right of appeal having once been conferred, has been abridged or limited? From July 1, 1954, to June 21, 1957, my distinguished historian friend from Bonavista-Twillingate was the minister of citizenship and immigration and the committee is entitled to assume that he has greater familiarity with the Immigration Act than any other act. Having that overwhelming instinct for reform which he now seems to display, what did he do to amend the appellate provisions of that act? I will mention to the house just two sections. Subsection 4 of section 31 reads as follows:
The Minister may in any case review the decision of an Immigration Appeal Board and confirm or quash such decision or substitute his decision therefor as he deems just and proper and may, for these purposes, direct that the execution of the deportation order concerned be stayed pending his review and decision, and the decision of the Minister on appeals dealt with or reviewed by him or the decision of the majority of an Immigration Appeal Board on appeals, other than those reviewed by the Minister, is final.
Section 39 reads as follows:
No court and no judge or officer thereof has jurisdiction to review, quash, reverse, restrain or otherwise interfere with any proceeding, decision or order of the minister, deputy minister, director, immigration appeal board, special inquiry officer or immigration officer had, made or given under the authority and in accordance with the provisions of this act relating to the detention or deportation of any person upon any ground whatsoever, unless such person is a Canadian citizen or has Canadian domicile.
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There, sir, is exposed for all to see, the measure of my hon. friend's histrionic avowals, the measure of attention which should be paid to his flamboyant exclamations of outrage.


John Whitney Pickersgill: Since the hon. gentleman has directed his remark to me I think I should be allowed to answer.


Richard Albert Bell: I have just indicated that the hon. gentleman was the minister of citizenship and immigration during this time.


John Whitney Pickersgill: The hon. gentleman has directed a question to me. I do not know whether he wants an answer to it. I will be pleased to supply one if he wishes.


Richard Albert Bell: The hon. gentleman will have plenty of time to reply later.
I have said only that the hon. gentleman during this period of years did nothing about this situation.


John Whitney Pickersgill: That statement is untrue.


Richard Albert Bell: Let us examine the records of this house and we shall see.
I deal now directly with the allegations against the appeal sections of this resolution. If one were to listen to what the Leader of the Opposition said this afternoon one would conclude that the tariff board had been ousted completely. That is the impression he sought to leave, and indeed, Mr. Grant Dexter has said so directly in the Winnipeg Free Press, although he must know how erroneous he is.
The fact is that in all material particulars the right of appeal is preserved intact and such abridgement or limitations as are provided are in lesser particulars, largely of a statistical nature. Such limitations, sir, are commonplace in statutes providing the right of appeal, whether it be the Supreme Court Act or in the provisions for lesser appeals.
In respect of shelf goods, hon. gentlemen seem to say that the one important issue is to determine the normal Canadian consumption and that all else is a mathematical calculation. That is not right at all. The really vital issue or the central problem of all is this. Are the goods in fact of a class or kind made in Canada? On that issue, and it is the vital one, the regular appeal procedure is preserved intact. The regular procedure of appeal remains unabridged in respect of the determination of the amount of Canadian production and in the application of the ten per cent rule. The abridgement relates only to a statistical computation in respect of which the opportunity for error is virtually nonexistent.

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My hon. friends have exclaimed that an unscrupulous minister could cook this statistical computation. Any attempt at impropriety would be known to this House of Commons within 24 hours and the real sanction of this high court of parliament would come into play.
The argument in this respect would really carry one to the impossible result that no final administrative decision could be entrusted to a minister of the crown. Indeed, that is exactly what the hon. member for Bonavista-Twillingate said, as reported at page 1722 of Hansard.


John Whitney Pickersgill: I said no such thing.


Richard Albert Bell: Then I will read to the hon. gentleman what he said on that occasion:
I say that every administrative decision affecting the rights of a citizen should be subject to an appeal


John Whitney Pickersgill: The rights of a citizen, yes.


Richard Albert Bell: All administrative decisions involve the rights of a citizen.


William Moore Benidickson: "Appeal" is the important word.


Richard Albert Bell: If such were the case, we would not have government; we would in effect have a state of anarchy. I think it must be evident to all hon. members of the committee that hon. gentlemen opposite, prodded by the Winnipeg Free Press, are pursuing their old strategy of playing both ends against the middle-I use that expression both literally and figuratively-in regard to tariff policy. They blow hot and cold; they beat around the bush; they straddle the fence.


John Whitney Pickersgill: All at the same time?


Richard Albert Bell: Let me just illustrate my point. If you look at page 571 of Hansard of February 1, 1960, you will see that my hon. friend from Ottawa East (Mr. Richard) is in favour of the total elimination of tariffs on automobiles from the United States. Yet every member of this house knows that the hon. member for Essex East (Mr. Martin) favours almost prohibitory restrictive measures against the importation of automobiles and automobile parts.


John Whitney Pickersgill: What justification is there for that statement?


Richard Albert Bell: The hon. member for Essex East favours sky-high tariffs for all the products of Essex county and free trade for the products of every other county of Canada.

I think the hon. member for Essex East, who has been very noticeable by his silence in this matter, should enter this debate before it is finished and tell the committee what he finds objectionable in this legislation. He has been voluble on other subjects, but he has been noticeably silent on this matter.
I have never been one to believe that to say "raise a tariff item" is to utter naughty words, any more than I am prepared to believe that one instantly surrounds oneself with a halo of righteousness when he says "lower tariffs". My philosophy in this is purely pragmatic. In this day, one cannot be theoretical. It is not really a question of tariffs at all; it is purely a matter of classification, of what will contribute to employment and development in Canada without prejudice to our export trade. In that I believe. This resolution meets that test and on that basis should have the support of the house.
I say to hon. gentlemen opposite, let us be done with silly, political manoeuvring, with the hollow sham of the type engaged in by the Liberal front bench, seeking only to resurrect the political quarrels of yesteryear and doing damage to secondary industry and employment in Canada, as well as to primary producers, east and west alike.


John Whitney Pickersgill: Mr. Chairman, I am not rising to speak; I am merely rising to correct an incorrect statement made by the hon. member for Carleton who has just resumed his seat.
The hon. member said I had done nothing whatsoever about the appeal provisions of the Immigration Act. Of course, the hon. member, from the phrase he read, made it very clear that those provisions did not, in fact, in any case apply to Canadian citizens at all. They could not apply to Canadian citizens at all. They apply only to persons who are not Canadian citizens.
However, since the hon. gentleman has taken it upon himself to make this statement, I should like to remind the committee, that in fact I prevailed upon the governor in council to exercise the powers given him under that act to set up an appeal tribunal for landed immigrants and to give every landed immigrant a choice between having his case dealt with finally by appeal board or by the minister.
If the law had allowed me to do so, I would have made it absolutely final; but the law as it then was, did not allow me to make it absolutely final. I also stated on more than one occasion that on the first occasion I had the opportunity to make any suggestions in parliament for changes in the act, I would suggest that this appeal jurisdiction be made

final. But I went just as far as the law, which the Minister of Finance helped to enact, allowed me to go. It was made before I came into this house, and I went as far as I could to assure appeals even to landed immigrants.


Harold Edward Winch: Mr. Chairman, for the past 40 minutes I have been sitting in my place listening with awe, fascination and admiration to the outflow of words from the hon. member for Carleton. Over the years I have heard members overcome with the exuberance of their own verbocity, but the hon. member gets the championship in this respect. It was absolutely awesome to follow the flow of adjectives and connotations in his opening remarks when he was trying to get in what I presume was a good offensive, or defensive, with the heavy guns. I thought his words were so wonderful that anyone who followed the hon. member should at least for one sentence try to reply in kind.
I know I can never meet the verbiage of my hon. friend, but I would like to say that in my opinion his remarks were such a vapid, vituperous, vitriolic, vindictive, vilifying, venting from a vacuum as has been seldom heard in this house. Mr. Chairman, I ran out of "v's".
May I in all sincerity say to the hon. member that the way to influence members and win friends and support is not by bombast; it is not by riding roughshod, but by trying to put forward in a calm and deliberate manner that which will answer the objections raised on this side of the house.
Whether the government likes it or not it must be recognized that there is a great deal of concern in Canada about the implications of the matter which is before us through this resolution. Very, very definitely there is major concern in western Canada.
When I spoke on this resolution on February 2 I tried to set forth what was causing concern to the primary and manufacturing industries of British Columbia and the boards of trade. I pointed out at that time that the primary and manufacturing industries and their organizations, and we too, are very seriously concerned about the word "approximately" used in the phrase "goods approximately the same class or kind made in Canada". I pointed out that we thought that if what we took to be the meaning of the minister in his opening remarks was correct, it would go a long way to satisfying those who are disturbed if that section of the proposal were to read, "in the case of goods other than goods custom-made to specifications, goods of the same class or kind similar in nature and purpose made or produced in Canada".
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I spoke at some length on this matter on February 2. The minister was good enough to reply in such a manner as to, in his estimation, clarify the situation. I wish to draw the attention of the committee to certain parts of the minister's statement on February 2, as reported at page 1684 of Hansard. The minister said, as reported in column 1:
I hope I can convince him.
That is, myself.
As I have said to those organizations which made the recommendations from British Columbia,
I think their fears are based on an assumption and I do not think the assumption is warranted. In general I think their fears have been greatly exaggerated.
The minister continued:
I shall be glad now to give to the committee and to the hon. member the substance of the views which have been conveyed to these associations. The concern which they have expressed is to the effect that there will be a material increase resulting in the cost of machinery and tools of production used in their operations and thus their position in relation to export sales will be weakened.
The minister then went on to try to clarify the situation. He spoke at some length, and, as I say, I appreciate that. On the following day, without any comment from myself, I sent a copy of Hansard containing the hon. gentleman's remarks to those organizations in the producing and manufacturing industries which had brought this matter to my attention in the first place. After studying the statement of the minister together with the information he had supplied, these people came to the conclusion that they have even more reason to feel concerned at the present time than they did before. As a result, they are in outright opposition to the proposals now before us.
I know that at least one body has made additional representations to the minister. I refer to the Vancouver board of trade which, apparently, takes a view similar to that taken by many of us here. The longer this debate goes on and the more time we have to study this question, the more concerned we are becoming about the possible effect of the changes in the Customs Tariff in connection with the "made in Canada" rulings which the government proposes to introduce.
So, once again, I have to ask the Minister of Finance whether he can clarify the situation further in the light of these new representations following a study of the statements he made in this chamber on February 2. I should like the minister to say whether or not he can answer the problems which these people foresee and whether he can give them assurances that the government proposals will not mean increasing costs in British Columbia. It is still my opinion,

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which is reinforced by this recent information, that the legislation we have before us now is, at least, so controversial that it should definitely not proceed until a great deal more study has been given to it by those who will be affected.
I should like in particular to draw the attention of the minister to five points which, in the opinion of British Columbia, are of major concern. They are outlined in a letter to the minister from the Vancouver board of trade. The first of these five points read as follows:
(a)	The phrase "custom-made to specifications" is ambiguous because it does not state whose specifications shall be considered. Many custom-made goods are bought on the manufacturer's specifications subject to modifications by the customer. It is suggested the wording should be clarified and provision made for the securing of rulings in advance.
The second point reads:
(b)	The words "adequate facilities" seem to mean that a "Made in Canada" ruling could be secured before there is in fact any manufacturer in Canada. Otherwise Canada will be in the anomalous position of having something declared to be "Made in Canada" which has never in fact been made in Canada.
The third point is also very important. It is:
(c)	The words "economic production" are not satisfactory because it is not clear to whom the test of economic production is to be applied. Further, if a Toronto manufacturer is declared as having adequate facilities for the economic production within a reasonable period of time for a Toronto customer how does this affect a Halifax or Vancouver customer? Is freight to be a consideration? It is conceivable in the above example that a Toronto manufacturer could be economic to a Toronto buyer and not at all to a Halifax or Vancouver buyer. If freight is to be a consideration then should not the legislation say so?
The Toronto case is, of course, given as an example. That is how they feel in British Columbia, and I agree with them. Then, again, the point is made:
(d)	The words "reasonable period of time" are not satisfactory since what is a reasonable period for the manufacturer may be completely unreasonable for the buyer.
Finally, the board states:
(e)	The minister's determination may take place at a time when there are outstanding orders with foreign manufacturers. It is departmental practice to acknowledge the problem of "lead time" but there is no guarantee that such practice will be continued when discretion in the matter is vested in the minister without right of appeal. The buyer who had orders outstanding at the date a ruling was made by the minister should be specifically protected in the legislation.
There we have in general the views which have been expressed to the minister. These are the reasons why they are still concerned in British Columbia about the possibilities and the implications of this legislation. I do not intend to take time in order to express their

attitude, and my own, with regard to the question of appeal. I think sufficient has been said on that subject already. Anyway, the bombastic arguments used on the government side and the sneers directed against those in the opposition who try to present the situation as they see it, and as they understand it from outside, are not going to resolve these doubts in any way.
I wish to say this. From all the communications I have received, from discussion with my colleagues and from my own studies to the best of my ability I believe that if the proposals now before us become legislative enactments established as regards the made in Canada rulings under section 2(a) 1(a) and under section 2a (lb), there is every possibility-indeed, it is almost inevitable-that the effect at least in western Canada will be to limit our ability to produce in order to be able to compete on world markets. That ability means everything in my province of British Columbia. I feel that costs of production in western Canada and in Canada as a whole are already too high and that the passage of this resolution will worsen the situation. I think it would be especially harmful to the maritimes and to the province of British Columbia.
I have tried to express the views of the primary and manufacturing industries of British Columbia as well as of the board of trade as they were relayed to me. Perhaps I do not understand this problem but surely industry does. This was their feeling which I expressed on February 2 and it is their feeling now. After reading the words of the minister on this subject there is an increasing feeling that this is dangerous to Canada and harmful with respect to maintaining the position of industry in western Canada.
I am always open to conviction. Although much time has already been spent on this resolution I hope the minister will take a little more time in order to answer the questions that have arisen. If the hon. gentleman does not do a better job of explaining than he has up to this time it is the opinion of many in this chamber and of industry in western Canada that the only course open to the minister is to withdraw the legislation for further and continuing study.


William Hector McMillan: 
Paul Theodore Hellyer: But doing nothing, most of the time.


William Hector McMillan: The government has done this at a time when the decision is appealable. If it is not appealable the government can change it every week or two and we cannot do anything about it.


Donald Methuen Fleming: Mr. Chairman, I do not wish to interrupt the hon. gentleman but if he wishes an answer to his question, I can give it to him if he would prefer to have it now.


Paul Joseph James Martin: The hon. member should be allowed to embellish his argument without interruption.


Donald Methuen Fleming: I was just asking the hon. gentleman if he wished the answer now or later. I am prepared to give it now. The answer is very simple, Mr. Chairman. The generator the hon. member speaks of was not made in Canada in 1959 but by 1960 it was being made in Canada.


William Moore Benidickson: On the 10 per cent rule?


Donald Methuen Fleming: Yes.


William Hector McMillan: In view of the minister's explanation I should like to ask him a question. The generator came in free of duty in 1959. Would the minister extend the same advantage to, let us say, the premiers of Quebec or New Brunswick

gentlemen of different political persuasion-if they wanted to bring one in this year? It seems likely that if Mr. Bennett of British Columbia goes up to the Peace river to build a generating station he might be in the market for a generator. Would the same advantage be extended to him if he wanted to bring in a generator.


John Whitney Pickersgill: Not the Peace river, but the Columbia.


Donald Methuen Fleming: The law is uniformly applied but the hon. member must appreciate that at times new products are manufactured in Canada. If one happens to be of the kind we are discussing here then obviously a time comes when an article that was up to that time ruled to be of a class or kind not made in Canada thereafter may be ruled to be of a class or kind made in

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Canada. These situations change. That is what happened in the case to which the hon. member has just now made reference.


William Hector McMillan: Does the minister then say that the generator of the type and size that was imported by Canadian Fairbanks Morse in 1960 was not of a class or kind made in Canada and would the same apply with respect to the hydro generator?


Donald Methuen Fleming: Mr. Chairman, let me make this clear. The hon. member uses the words "type or size". I have said, in the language of that statute, that the generator that he speaks of was, in 1959, not of a class or kind made in Canada but that by 1960, because of manufacture in Canada, it was in 1960 of a class or kind made in Canada.


William Moore Benidickson: Mr. Chairman, would the minister inform all of us what in 1960 made the change? Which manufacturers were providing the 10 per cent or perhaps the equivalent that is necessary under the law?


John Whitney Pickersgill: Surely the minister is going to answer.


Donald Methuen Fleming: Yes, Mr. Chairman, but I am not sure that I should give names in a situation like this. I happen to know what the names are. I have just received information from my advisers. I do not think the hon. member is going to ask for names. The information is that the manufacture of this type of generator was being carried on in Canada in 1960. I would not mind giving the hon. member the information he requires but not the names.


William Moore Benidickson: I do not want the names.


John Whitney Pickersgill: I should like to ask the
minister whether this generator that was imported in 1960 would be regarded under the present law as shelf goods or as custom-made goods.


Donald Methuen Fleming: The latter.


John Whitney Pickersgill: If it was possible to determine that an article of this sort, which the minister said was custom-made goods, had been made in Canada in 1960, can the minister then explain why the present amendment he is asking for is necessary at all?


Donald Methuen Fleming: The hon. member is talking about one case but we are talking here about all cases in relation to some 70-odd items of the tariff. The hon. member has simply picked out an illustration of the fact that the situation can change, that an article that is not at some particular date made in Canada can be made in Canada at a later time, and therefore the change almost

automatically follows under the statute and the article, if imported, then attracts a higher rate of customs duty.


John Whitney Pickersgill: Before the hon. member for Kenora-Rainy River proceeds, I might point out that the parliamentary secretary told us this afternoon that the erosion had gone to such a point that custom-made goods were automatically ruled not to be made in Canada, so whom do we believe, the minister or the parliamentary secretary?


Donald Methuen Fleming: With respect, Mr. Chairman, let us keep this discussion on the rails and close to what hon. members have been saying. I have made my remarks about the erosion and I am not repeating them at this time. The fact is, however, and everybody is aware of it, that when the manufacture of an article is introduced in Canada, if it is introduced in sufficient quantity then the case moves from one of goods of a class or kind not made in Canada into the category of goods of a class or kind made in Canada.


William Moore Benidickson: Mr. Chairman, throughout this debate the Minister of Finance has made what I regard as a specious and improper argument when he has said that the rates of duty are not affected by the amendments before us. On the sole basis of interpretation of language I could agree with him but with respect to the effect in an industrial way we have had many comments during this debate as to what might be involved so far as volume of trade is concerned. The Deader of the Opposition referred to a figure of $200 million of trade imports in this particular arena. That figure, of course, cannot be taken as a maximum because we have to have regard for things that probably were normally produced in Canada and as a result the figure could be terrifically high.
In this debate I think the Minister of Finance has continually avoided a proper answer to the questions we have raised on some of these matters. Certainly there is nothing in what the Minister of Finance calls a short, simple resolution that changes the rates of duty. The hon. member for Vancouver East has been vocal in this debate but I hope that members of parliament from the prairie provinces, who happen to be all on the government side with the exception of the hon. member for Assiniboia, and Conservative members from the maritime provinces will tell us whether they have studied the implications of this resolution and whether or not they have decided that they approve of the resolution. They have been slavishly silent and have been of completely no help to us with regard to these matters.

I think the time has come for members of parliament from these areas who support the government to tell us whether or not they have studied the uncertainties that have been suggested by the opposition. The things that we have suggested are likely to be very adverse not only to consumers and end users but to the possibility, as the hon. member for Vancouver East mentioned today, of new industries in British Columbia in that this legislation, by means of an unnecessarily high impost on the cost of their basic machinery, will increase their costs to the extent that they will not be efficient. I believe these things have to be considered and in my opinion there are many subjects to be discussed in connection with this resolution.
There is the question of our relationships with GATT. There is the question of whether or not the historic concept has been properly presented by the Minister of Finance. I assert that it has not been properly presented to the house by him. I ask the minister at this point to have regard to the situation vis-a-vis GATT. We are all rather uninformed. We are not specialists or experts in this highly complicated field involving trade amounting to perhaps $5 billion or more.
Normally we rely on a minister to come before the House of Commons and, regardless of his political responsibilities, to accept the administrative responsibility to tell all of us in this chamber what we want to know. We expect that of a minister. We do not want quick assertions such as he made in a speech in Toronto when he said that the action of the government has aroused the interest of all our associates in GATT and that the government is confident that what they are proposing to parliament is within the framework of GATT. Members of parliament, I think, usually pay attention to language such as that used by the minister in addressing laymen in Toronto on January 9 when he said that "our proposals have aroused interest". Surely there is a warning to every member of the House of Commons to ask questions with respect to the use of a loose phrase of that type.
I want to know whether or not the minister is prepared to comment upon his responsibility in connection with the alteration of our trading law that is involved in this redefinition as it relates to article X, subsection 3, paragraph (b) of the general agreement on tariffs and trade signed at Geneva, October 30, 1947, by Canada and many other countries. I quote from this section of the agreement:
Each contracting party shall maintain or institute as soon as practicable, judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review and correction of administrative action relating to customs matters.
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I speak only as a member of this House of Commons, and I do not claim to be a lawyer interpreting this provision. I think it is written in laymen's language. In my opinion, it means that the contracting governments will maintain an appeal opportunity that is above and beyond its customs administration. Of course, prior to the signing of this agreement we had such a procedure in Canada. This meant nothing to Canada.
However, despite the eloquent remarks made this afternoon by the hon. member for Carleton, I suggest that the obvious elimination of appeals in certain areas of customs matters is certainly a violation of this section of the agreement which we made with so many other trading countries in 1947.
I know that the government asserts that our courts have, in some way, in the last decade eroded the situation that existed when we signed this agreement. This particular subject has been debated in this committee on four or five occasions, and on each occasion we have challenged the Minister of Finance, and those who speak for officialdom, to tell us in what respect our partners in GATT can consider that they received what he described as free or non-traded benefits. I do not believe that the minister or his parliamentary secretary has indicated to this committee where we have been giving away, through our judicial processes, something that was not expected in 1947.
I want Canada to retain the things in the agreement that were to Canada's advantage when the agreement was signed in 1947. This administration has not indicated to us in any way that we are not being placed in jeopardy of retaliation in so far as our export industries are concerned. This new proposal is, in fact a departure from what was contemplated by all our trading partners in 1947. I want the utmost for Canada, of course, but what I am afraid of is that, by passing legislation of this kind, we are going to get reprisals, perhaps in a subtle way, from our trading partners. No member of this parliament will hear a word about it, but our exporters will suffer. Our representatives who sit in Geneva year after year, clever and able though they are, are going to be embarrassed by the legislation that is proposed here.
As hon. members of the committee are aware, I have a question on the order paper on this subject. I was rather loath to put it as a formal question, but I wanted to ask this government to inquire about protests that may be received by our representatives at home and abroad. I refer, of course, to people who might feel that, under the terms of the GATT agreement, they were entitled to

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certain adjustments in the trading arrangements that were outlined in part I of the schedule to the agreement. I regret, Mr. Chairman, that I had to put this question in Votes and Proceedings, but I feel that the minister is so glib that I would not ask him this question. I followed this procedure deliberately because the minister has been too glib in the debate and not too accurate in his information to the committee.


Mr. Smith (Lincoln):: I did not intend to enter the debate again. I spoke a few days ago. However, I should like to say that I resented the attitude of the opposition frontbenchers in taking the floor from my good friend the hon. member for Welland. I was enjoying the remarks of the hon. member for Welland and I would have been pleased if he had been given the opportunity of completing his remarks. Perhaps he was saying the wrong thing. He certainly was expressing the principle set out in the resolution we are discussing now. In fact, I do not believe he could do otherwise because he comes from an area in which there is a great deal of secondary industry.


John Whitney Pickersgill: I am very glad the hon. member for Lincoln intervened in the debate at this point because otherwise I might have forgotten a point he made the other day in debate and to which I want to refer. I am very grateful to him for reminding me of it.
I want principally to speak about the speech made this afternoon by the hon. member for Carleton who apparently thought that rhetoric and bombast would be an adequate substitute for a total lack of substance, because there was an almost total lack of substance in his speech. I think we would all have been much more impressed if the hon. gentleman in talking about erosion had given us examples of erosion.
As I understand it the Minister of Finance, the Minister of National Revenue and now the parliamentary secretary, claim that the nature of this erosion has been that the tariff board and the courts by their decisions have changed the concept of a class or kind made in Canada from what it was ten years ago, and have narrowed it and limited it in a way in which it was not narrowed and limited ten years ago. If that is not a correct statement of what erosion means according to the minister, I would be happy to be corrected, but I think it is.
I have examined every one of these seven cases that the hon. gentlemen have adverted to, but they have been very careful to see to it that we are never given particulars. Even the hon. member for Carleton, when referring to the case of the .22 rifles, seemed to be singularly lacking in detail. I have

here a few details about that case which I think ought to be placed on the record because it is typical of all seven that I have examined in somewhat more detail in private than the hon. gentleman did in public.
In the case of the .22 rifles it is true that there was a decision of the deputy minister that these rifles, of a particular kind, were of a kind made in Canada, but I am informed, and I think quite correctly, that these rifles were not ruled of a class or kind made in Canada in the customs memorandum, series D, No. 51 MCR 14, then in effect at the time this decision was made. That memorandum had not been cancelled. That memorandum I might say, constituted the decision of the commissioner of customs, Mr. H. D. Scully, that the seven models and makes of the .22 calibre automatic rifles were of a class or kind made in Canada on April 11, 1939. In other words that decision of the tariff board was a decision that was in line with the decision made by Mr. Scully in 1939, which the deputy minister departed from in his decision of 1949. The plain fact is that the deputy minister, by his decision, had enlarged what had been the historic concept. The tariff board has properly gone back to that historic concept in every case that I have examined.
Of course the hon. member for Kenora-Rainy River mentioned the undisputed details of the shovel case which showed that over the years the shovel case was decided in one way and on an appeal in the way the department had decided over the years and then the deputy minister made a different decision, which was overruled by the tariff board which again went back to the historic concept.
If we had time, sir, we could go through all these cases and show that in every case there was in fact no erosion at all. We could show very much the contrary, that the tariff board and the courts followed the historic trend consistently. What is more, it does seem to me that my hon. friend from Kenora-Rainy River in reading the provision of GATT, drawing to our attention article 10, has given indication that this is so.
Article 10, section 3 (b) reads as follows:
Each contracting party shall maintain, or institute as soon as practicable, judicial, arbitral or administrative tribunals or procedures for the purpose, inter aba, of the prompt review and correction of administration action relating to customs matters.
Mr. McKinnon was chairman of the tariff board for seven years before 1947 and for ten years afterwards. I do not think anything happened suddenly to Mr. McKinnon which would make him erode the decisions he had himself made. Everyone knows that Mr. McKinnon was one of the principal architects

of GATT. Everyone knows that Mr. McKinnon knows better than anyone what GATT meant. I do not think anyone really would be expected to believe that Mr. McKinnon would make decisions that were contrary to GATT.
I would suggest, sir, that this attempt by the government to take away many of the essential elements of appeal to an administrative tribunal is a clear infraction of that section of GATT. It is a deliberate attempt to disregard the provisions of our international obligations.
The parliamentary secretary this afternoon jeered at the reference made by the Leader of the Opposition to the bill of rights. I would just like to draw to the attention of this committee the terms of section 2 (e) of the bill of rights which reads as follows:
(e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations;
No one could deny that at the present time these decisions as to whether an article is of a class or kind made in Canada, are appealable to the tariff board on all the elements and facts of the case, and not on selected facts, selected by the ministry, while other selected facts are to be excluded.
The minister said this afternoon that this was not a determination of the rate of duty, but that is precisely what it is. When the minister makes one of these class or kind decisions he is determining the rate of duty. The minister can arbitrarily and finally, in the case of custom-made goods, and also' by jiggery-pokery, if he wants to exercise his powers in the case of shelf goods, make an arbitrary decision which cannot be appealed, and in the case of normal Canadian consumption, one taxpayer might be paying 22 per cent and the other 7 per cent in comparable circumstances from which there can be no effective appeal.


William Moore Benidickson: No one knows about it.


John Whitney Pickersgill: As the member for Kenora-Rainy River said, it is done in secret. It may be perhaps done by someone other than the minister himself. As everyone is aware, most of these decisions are made by clerks and not by the minister at all.


Mr. Horner (Acadia):: Would the hon. member permit a question?
Just before he sat down the hon. member said that most of these decisions were made by clerks. I take it we can assume that he himself made a number of decisions for Mackenzie King.


John Whitney Pickersgill: No, I did not make any decisions for Mr. Mackenzie King because
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neither Mr. Mackenzie King nor myself happened to be the Minister of National Revenue or a clerk in the department at that time, and that is what we are talking about now. I think there is plenty of scope within the ambit of this resolution to keep us busy without going off into that kind of diverting diversion, if I may put it that way.


William Moore Benidickson: Like British trade.


John Whitney Pickersgill: Yes, like British trade as the hon. member so aptly puts it. Why is the government so frightened of the tariff board? This is a tariff board that they themselves appointed, and yet they are so anxious to take jurisdiction away from the board. That is what they are doing; they are taking away from the tariff board the jurisdiction it now has in the determination of whether a man's obligation is to pay the lower or the higher rate of duty. They are taking away the right a man now has to have a determination by a tribunal.
Why does the government want to do that? Why are they afraid of their own board? What do they think the board is going to do? That is why I was glad the hon. member for Lincoln intervened in this debate because I might otherwise have forgotten this point. The hon. member for Lincoln really let the cat out of the bag the other day. He told us it was not easy to get at the tariff board, but it was easy to get at the minister. That is the reason, and that is the only reason that makes any kind of sense.
I know the Minister of National Revenue, the Minister of Finance, and today the parliamentary secretary to the Minister of Finance, have given the reason that every tyrant has always given for discretion; that it is faster; that it is more efficient; that they are good tyrants anyway. They say, "Maybe the wicked Liberals would do things badly, but not us good Tories. We would assure justice for our friends, and the Liberals do not deserve any justice anyway".


Donald Methuen Fleming: That is bad grammar. Change "us" to "we" there.


John Whitney Pickersgill: I know it is bad grammar, and it is bad law that the minister is trying to enact. No doubt one bad thing tends to generate another. That is exactly the gravamen of my argument.
Why do they want this arbitrary power? What secret, clandestine purpose have they in mind? As the Leader of the Opposition said earlier today, if the government insists on putting in this bad definition and using its majority, a majority from provinces that are going to suffer very seriously because of this law, of course we cannot stop them. But at least it will be the law and at least there

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will be tribunals to determine the matter. But they insist not only on changing the law; but they say there can be no appeal and a taxpayer cannot get the new matter before the courts.
In his omniscient wisdom the Minister of National Revenue will decide these things. They say that it does not matter anyway, that these things are very easy to decide. If they are easy to decide, what difficulty is there about sending them to the tariff board for decision? Moreover, the Minister of Finance, on December 20 in the debate on the supplementary budget, said this as reported at page 1013 of Hansard:
-we consider it important to provide for careful investigation and public hearings before major tariff revisions are introduced. This permits all interests and all points of view to receive full consideration. We believe that the tariff board is the appropriate body to undertake this task, and that in order to do so expeditiously the board should be enlarged sufficiently to permit it to adopt a panel system.
In other words, the minister himself in his speech on the supplementary budget said that the tariff board was the appropriate body to decide these questions. Why does he not let the tariff board decide them? It is true the minister said at another point- and I am not going to the trouble to look it up, unless I am challenged; I have the reference here-that there had been a welter of these appeals; but the Minister of National Revenue said there had been very few. Since they are appeals from the decisions of the Minister of National Revenue, I suppose he really knows better than does the Minister of Finance how many there are. If there are very few, it will not clog up the work of the tariff board to decide them. If there are many appeals, it would suggest there are many taxpayers who feel they have a right to take seriously the words that the Prime Minister put into the bill of rights through this parliament, namely that a person should not be deprived of the right to a fair hearing in accordance with the principles of fundamental justice in the determination of his obligations.
What is a tariff? It is a tax. In this legislation we are saying that the Minister of National Revenue shall decide what the tax is to be, instead of parliament so deciding. As a result of this legislation the Minister of National Revenue will decide whether it is to be a low rate of duty or a high rate of duty.
If custom-made goods are concerned, nobody can challenge that decision at all; there is no way of going beyond it. If shelf-made goods are concerned, all the minister has to do is fix the normal Canadian consumption at such a figure whereby it can be

shown that 10 per cent is produced in Canada and there is again no appeal.
In other words, the meaning is taken right out of the right of appeal. It is true that one can appeal on some of the facts, but the board is not allowed to look at the rest of the matter. They will therefore be incapable of making any decision that has any meaning. This is a travesty of justice.
As the Leader of the Opposition said, this is the fundamental problem. We do not like this surreptitious method of trying to increase the tariff, but that is a proper difference between the two parties. If hon. gentlemen opposite want to do that, they have a majority and all we can do is make our arguments in parliament, put up the best case we can and let the house decide. But when it comes to this question of a fundamental right to a hearing that was supposed to have been guaranteed in the bill of rights only one year ago, we think that surely sincerity should be shown in the very first case to come before parliament and the provisions contained in the bill of rights should be put to the test.
We say that the Prime Minister should come to this committee and tell us why he thinks it is necessary to take away the right of appeal which now exists. He should tell us why it is taken away from people with regard to many important, and indeed what could be decisive facts, when it is necessary to decide what tax people are to pay and what rate of tax is to be imposed upon them.
We think the Minister of Justice should tell us why it is so essential to brush the courts aside, because forsooth the Minister of Finance says that the courts have eroded the law. If the courts have eroded the law- the minister thinks, as he always does, that repeated assertion makes something a fact- he has given us no facts to demonstrate this.
When I asked the minister the other day to cite one case where the rulings of the customs department have been reversed by the tariff board over the years, he dodged the question and he keeps on dodging it. This is simply making a travesty of the bill of rights. It is making a travesty of the rule of law, and of course it is seeking to take away from parliament and hand to the minister the arbitrary, final power to decide what one taxpayer shall pay and what another taxpayer shall pay, without anyone else being able to look at the case at all.
That is what we in this committee are being asked to approve in this resolution and to found legislation upon. I say, sir, that no more fundamental issue could come before us. Not only is the jurisdiction and

the right of parliament to impose taxes being eroded-that is what the minister is seeking to do-but the right of the taxpayer to a fair hearing and to justice is being eroded. We think these two fundamental principles are the most important, though we do not deny the importance as well of this back door method of trying to increase the tariff.


Frank Howard: Mr. Chairman, this debate has been going on for a long period of time.
I am sure the minister and his officials are getting a bit weary. Still, I believe that if he is getting worried and upset over the delay and the long period of time which has been taken, that is one of the penalties he has to pay for attempting to impose upon parliament by this method the right to give a minister of national revenue the unqualified and unappealable powers which this resolution seeks to confer. This, in my view, is the first and only matter to which we should direct our attention at the moment. It is with regard to this issue that some sensible, logical and reasonable explanation-if there is any- should be made. Following the removal of this final and arbitrary power which is being sought in the resolution we should be in a better position to discuss the other effects of the changes proposed in so far as the economy of the country is concerned.
Speaking for myself, I say this. Unless we can have from the minister sponsoring this resolution some indication that he is prepared to alter paragraph 3 relating to the finality of the minister's decision, unless we can obtain some admission that the hon. gentleman has made an error and that he really does not wish to confer on his colleague in the government authority and power of this type, I have no intention of supporting the other proposals which go along with it.
As the hon. member for Bonvista-Twillin-gate pointed out a short while ago, toward the end of the last session, with all the trumpeting and fanfare attendant upon a circus, we passed the bill of rights. Presumably we thought that this bill of rights meant something. We took the word of the Prime Minister and others that it meant something and that it would have some baring upon conditions such as those now being sought by the Minister of Finance. However, it is quite obvious that the government really had more verbosity than integrity when it proposed and introduced the bill of rights last session because what we have before us now to my way of thinking, is completely contradictory to the principles contained in the bill of rights and absolutely at variance with the speeches which the Prime Minister and other gentlemen made about rights and freedoms during the last session, in other sessions, and over the years. In addition, it is contrary in my
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view to all the concepts we have grown up with in this democracy regarding the desirability of removing arbitrary powers from the hands of one or two people in high positions.
For countless years people in this country and in other countries have rebelled against the concentration of authority and power in the hands of one or two persons. The Conservative party, when it was over here on this side of the chamber in opposition, was notable for its objection to the extension of the emergency war measures powers which were wanted when Mr. C. D. Howe was in office. They claimed then that these were arbitrary powers intended to be placed in the hands of one person, that it was shocking to ask for them, and that they should not be continued. The longer this sort of thing goes on, the longer the Minister of Finance and others seek to repeal some of the concepts of democracy and freedom and replace some of the concepts of the bill of rights by a back door approach-I was going to use a word there which came immediately into my mind, but I got into trouble with that a few weeks ago, so I had better not use it again; I will use the word "left-handed"-or a left-handed approach and seek to abridge these freedoms which have taken hundreds of years to develop, they are displaying propensities which are nothing short of tyrannical-and we know that the Minister of Finance is perhaps not lily white in this regard.
I cannot for the life of me understand why the government wants to have these authoritarian powers or why it should want the right to make decisions in secret in some room and not have those decisions brought into the light. I cannot understand why it does not wish them to be subject to an appeal to some other agency or authority such as that which exists in our courts of law. I cannot, as I say, understand for the life of me why they should want this sort of dictatorial power unless there is something nefarious about it, and I am not suggesting there is. I am suggesting, though, that we have so far not received from the Minister of Finance any reasoned or logical explanation as to why he should want his colleague to become more of a dictator than is possible under our present system.
No matter how far the government has convinced itself that it is gentle and kind and sweet and lovable, no matter how far it has convinced itself that it is going to make the right decisions and be generous to everyone and preserve the rights and freedoms of the people, the fact remains that the more that power is concentrated into fewer hands, the easier is the step towards tryranny and dictatorship and the greater is the desire to remove that remains of the freedom and rights

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of the people. One of these rights is the right to appeal decisions reached in secret behind closed doors by politicians when heaven knows what sort of pressures are used to get them to make particular decisions. We know that cabinet ministers, like other members of parliament, are subject to pressure from time to time. Some of this pressure is political, and some types of it are worse than others. Some are of a minor nature involving, say, a problem connected with unemployment insurance. But we know there are pressures from certain forces in the economy which would like the government in office to enact laws or regulations which would benefit some small group to the detriment of everyone else. These pressures exist whether the government in office is made up of Conservatives or whether it is made up of people having any other political conviction.
I think the Minister of Finance is being extremely unkind and unfair to his colleague or to anyone else who might hold the office of Minister of National Revenue by seeking to give him power and authority of the kind proposed in this resolution. Ministers of the crown are political figures upon whom more pressures are brought to bear than upon private hon. members by way of telegrams, briefs, letters, telephone calls, personal visits, requests and so on. In giving a minister the type of power sought by this resolution we are placing him in a position of being increasingly subjected to political pressures and requests for determinations under this proposal which might be to the advantage of some segments of the economy and to the detriment of others.
The problem is lessened if the minister is strong-willed, determined, courageous and honest but if he is vacillating, weak, dishonest or unscrupulous the danger becomes very real. This has happened in the past. Not long ago in British Columbia the minister of lands and forests found himself in a difficult position. A minister with a lack of integrity and honesty may be unable to resist the pressures exerted and he may agree to make a determination in return for one of a number of considerations or for a variety of reasons. The decision is unappealable and cannot be reversed. The decision of the minister is final with respect to those matters enumerated in this resolution.
I have no intention of granting this authority to any minister, regardless of who may be holding the portfolio. I say that with all due respect for the present Minister of National Revenue. We are not dealing here with the personal qualities of the minister but with the government's resolution.
I will not support a resolution that can lead to the possibility of a power-mad

minister, perhaps not long in office, not bothering with the cumbersome difficulties of processing appeals through other bodies but preferring to make decisions in secret behind closed doors, possibly in response to political pressures or pressures that will provide income to the party coffers.
From time to time editorial writers and politicians level accusations against the socialist movement charging that the socialist movement advocates state control. This is true. Many charges are made against the socialist movement by those who like to make a play of the principles for which we stand. Politicians may do this in an attempt to gain political advantage. Never in their wildest dreams, however, would those who make accusations against the C.C.F. think of accusing the socialists of seeking what the minister now seeks in this proposal, namely individual ministerial control which will lead to the whittling away of our democratic institutions and the undermining of our democratic concepts.


William Moore Benidickson: The hon. member is right. It worries the Liberals.


Frank Howard: I did not hear that observation. I am prepared to sit here day after day while the Minister of Finance attempts to justify his request for tyranny, dictatorship and authoritarian control, but I have no intention of supporting this proposal. If it is possible for the minister to be humble perhaps he will tell us he does not really seek this power and will have one of his colleagues move an amendment granting the right of appeal. If that is done, I will withdraw my opposition, the amendment may be proceeded with and I will support it.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
The Deputy Chairman:: Shall the resolution carry?


[Stage Direction]
Resolution agreed to.
Charles Edward Rea: Shall I report the resolution?


Some hon. Members:: Agreed.
Resolution reported and concurred in.



[Stage Direction]
The house in committee of ways and means, Mr. Rea in the chair.

[Stage Direction]
Resolved that it is expedient to introduce a measure to amend the Income Tax Act and to provide among other things:
1.	That with respect to income of corporations earned on and after January 1, 1961, the amount of the first bracket of taxable income subject to a rate of tax of 21 per cent be increased from $25,000 to $35,000.
2.	That for the 1961 and subsequent taxation years the additional tax of 4 per cent imposed on investment income of individuals be repealed as applied to income from sources in Canada.
3.	That for taxation years commencing in 1963 and subsequent taxation years a corporation will qualify as an investment company only if not less than 75 per cent of its gross revenue is received in the form of dividends from taxable corporations resident in Canada and that for taxation years commencing in 1961 and 1962 this requirement be 55 per cent and 65 per cent respectively of such gross revenue; however, this requirement shall be 75 per cent of such gross revenue for taxation years commencing in 1961 and 1962 in the case of a corporation that received not less than 75 per cent of its gross revenue in the form of dividends from taxable corporations resident in Canada in its taxation year that commenced in 1960, and 65 per cent of such gross revenue for taxation years commencing in 1961 in the case of a corporation that received not less than 65 per cent but less than 75 per cent of its gross revenue in the form of dividends from taxable corporations resident in Canada in its taxation year that commenced in 1960.
4.	That for taxation years commencing in 1963 and subsequent taxation years a trust or corporation established or incorporated solely in connection with, or for the administration of, a registered pension fund or plan shall be exempt from tax only if 90 per cent of its income from investments is from sources in Canada and that for taxation years commencing in 1961 and 1962 this requirement be 70 per cent and 80 per cent respectively of such income; however, this requirement shall be 90 per cent of such income for taxation years commencing in 1961 and 1962 in the case of a trust or corporation that received not less than 90 per cent of its income from investments from sources in Canada in its taxation year that commenced in 1960, and 80 per cent of such income for taxation years commencing in 1961 in the case of a trust or corporation that received not less than 80 per cent but less than 90 per cent of its income from investment from sources in Canada in its taxation year that commenced in 1960.
5.	That the exemption from the 15 per cent tax payable by a non-resident person on interest received from a Canadian resident, now granted for interest payable on bonds of or guaranteed by the government of Canada, be repealed with respect to interest on bonds issued after December 20, 1960, other than bonds held by
(a)	national governments of foreign countries and their central banks, and
(b)	such international agencies as may be prescribed by regulation.
6.	That the reduction from 15 per cent to 5 per cent in the rate of tax payable by a non-resident person on interest received from a Canadian resident, now granted for interest on bonds or other obligations of or guaranteed by Her Majesty in right of a province, and for interest on bonds or other obligations provision for the payment of which was made by a statute of a provincial legislature, be repealed with respect to bonds or other obligations issued after December 20, 1960, except bonds or other obligations issued after
Income Tax Act
December 20, 1960 in respect of which a written agreement was formally entered into on or before that day for the purchase and sale, in specified amounts and at specified prices of all of the bonds or other obligations included in the issue.
7.	That the exemption from the 15 per cent tax payable by a non-resident person on interest received from a Canadian resident, now granted for interest payable in a currency other than Canadian currency, be repealed except for
(a)	interest on any obligation where the evidence of indebtedness was issued on or before December 20, 1960,
(b)	interest on any bond or similar obligation issued after December 20, 1960 in respect of which a written agreement was formally entered into on or before that day for the purchase and sale, in specified amounts and at specified prices, of all of the bonds or similar obligations included in the issue, or
(c)	interest on any obligation incurred in the course of carrying on a business in a country other than Canada.
8.	That the reduction from 15 per cent to 5 per cent in the rate of tax payable by a non-resident person on dividends received from a Canadian resident, now granted for dividends paid to a non-resident corporation which owns all the voting shares (except directors' qualifying shares) of the Canadian resident paying corporation, be repealed with respect to dividends paid after December 20, 1960.
9.	That the rate of tax payable by a non-resident corporation on dividends received from a Canadian resident, now limited to 5 per cent in accordance with paragraph 2 of article XI of the income tax convention between Canada and the United States be increased to 15 per cent with respect to dividends paid after December 20, 1960.
10.	That with respect to income earned on and after January 1, 1961 a special 15 per cent tax be imposed on a non-resident corporation carrying on business in Canada, other than a bank, life insurance company, transportation company or communications company and that the tax be computed by reference to the amount remaining after deducting from its taxable income earned in Canada the aggregate of
(a)	the tax payable under part I of the Income Tax Act, including the tax payable under subsection (5) of section 10 of the Old Age Security Act,
(b)	income taxes payable to a province which are not deductible in computing income for purposes of the Income Tax Act, and
(c)	an allowance in respect of net annual increases in its capital investment in property in Canada.
11.	That where the contractual rate of interest on any bond, debenture, mortgage, note, bill or similar evidence of indebtedness issued by a tax-exempt borrower including a government after December 20, 1960 is less than 5 per cent, and the evidence of indebtedness is issued at a discount which provides an effective yield to maturity, or to the earliest call-date, that exceeds the contractual rate by more than 33£ per cent thereof, the whole of the discount shall be deemed to be income in the hands of the first Canadian resident taxable holder of the evidence of indebtdness.
12.	That for the 1961 and subsequent taxation years a student in full-time attendance at a university in a course leading to a degree be permitted to deduct in computing his income the tuition fees paid by him in the year to the university, and that the said tuition fees also be deducted in computing the income of the student for purposes of determining whether the student is a dependent.
[Stage Direction]
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Charles Edward Rea: I might inform the committee that the terms of the proposed amendment will be found as an appendix to Votes and Proceedings for Thursday, February 2 last.


Donald Methuen Fleming: Mr. Chairman,
with respect to the income tax resolution may I suggest that as it is one resolution with 12 paragraphs we follow the procedure of other years, that you call the paragraphs separately as though they were separate resolutions and that we adopt them seriatim in the order in which you call them.


John Whitney Pickersgill: Mr. Chairman, if I understood the minister correctly he suggested that the paragraphs of the resolution should be called seriatim. I think it has been the usual procedure to have some discussion about the resolution as a whole before individual items have been called and I would hope that procedure could be followed. That is the procedure we would wish to follow at the present time.


William Hector McMillan: Mr. Chairman, I should like to say something on this matter because in former years we have had a discussion on the resolution as a whole. I find, in going back to June 4, 1956, that after a discussion of the income tax resolution that covered 24 pages in Hansard the hon. member for Greenwood said, "We have been all over creation", and the hon. member for Eglinton then proceeded to make a speech that took up another six pages. I think we should have an opportunity at this time to discuss the income tax resolution in a general way rather than proceeding to discuss the paragraphs seriatim. After the dinner recess on the occasion to which I have referred there was discussion of the sales tax and the excise tax. The hon. member for Eglinton at that time discussed such matters as the excise tax on furniture and shoes. He said that members of the house should rise in angry indignation against a government that would dare to maintain a 10 per cent sales tax on shoes and furniture and yet the tax is now 11 per cent. I think we should be granted the same privilege as the chairman of the committee at that time granted the hon. member for Eglinton.


Charles Edward Rea: Do X understand it is the wish of the committee to discuss the resolution as one resolution and pass it as one resolution?


Donald Methuen Fleming: I think it would be the wish of the committee to have an orderly discussion and the subject matters of the 12 respective paragraphs of this resolution vary quite widely. Unless we arrange to call each paragraph separately as has been
[The Deputy Chairman.]
done in other years, I think we are going to have a very discursive, mixed up and unsatisfactory discussion.
One hon. member opposite, at any rate, indicated that he wished to say something in general. He then proceeded not to talk about the Income Tax Act at all but about the sales tax which has nothing whatever to do with the Income Tax Act. We are not back to the budget debate. Anything that is relevant to any of the paragraphs of the resolution can be said, of course, with respect to each of them, but this is not a warrant for talking about the sales tax.


John Whitney Pickersgill: Since this is one resolution, I think it would be our wish to have a certain amount of discussion about the whole resolution and I think we would be quite agreeable after that discussion to follow the suggestion of the Minister of Finance that each item should be taken seriatim. This is a single resolution and under the rules, therefore, we have a right to discuss it as a whole. We would like to do that for some little time at the beginning.


Paul Joseph James Martin: Mr. Chairman, when the minister introduced his so-called baby budget shortly before Christmas the only reference he made to the most important domestic problem in our country, namely, unemployment, was when he indicated that he proposed to provide for the application of the concept of double depreciation to what he called chronically unemployed areas. Since that bare announcement some two and one half months ago there have been persistent interrogations from the Liberal opposition addressed to the Minister of Finance, the Minister of Labour, the Minister of Trade and Commerce and the Prime Minister as to when we might expect a more detailed statement about this proposed policy.
When the policy was announced there was some expectancy in the country that this kind of relief, if embodied in a real plan, might provide some mitigation in certain surplus employment areas, and thereby give these areas some relief from the serious problem of unemployment that attended them and has attended them since this government came into office. However, in spite of our interrogations of the ministry from time to time we were never able to ascertain which department of government was responsible for the administration of this policy. We also were not able to ascertain what kind of criteria would be invoked by the government to determine which areas could qualify for the beneficial consequences of the policy which the Minister of Finance announced before Christmas.

Not only were we unable to elicit any information but we were led to believe by the Minister of Finance that there could be no announcement of the details of the policy designed to meet the serious emergency of unemployment until such time as the budget resolutions had been disposed of in this house.


Donald Methuen Fleming: No.


Paul Joseph James Martin: That is what the Minister of Finance told the hon. member for Laurier early in the month of January.


Donald Methuen Fleming: Will the hon. member please direct his attention to the words I used. I said, until the house had passed upon them. I referred to the adoption of the main motion to resolve the house into committee of ways and means. I did not at any time say until after the resolutions had been adopted in committee of ways and means.


Paul Joseph James Martin: The Minister of Finance is entitled to his interpretation of his own words and I am entitled to place my interpretation upon them. The record is clear. He indicated to the hon. member for Laurier early in the month of January that it was not possible to announce the number of areas that were going to be included in this plan for assisting the chronically unemployed sections of the country until such time as the budget resolutions had been' passed. The minister also told the hon. member for Laurier that a member with his experience should know that was the case. He was naturally assuming that there was no provision in the existing law which would prevent any other course being followed than that outlined in the response of the Minister of Finance.
However, as the hon. member for Kenora-Rainy River pointed out a few days later, we had been misled by the Minister of Finance. I shall be kind to the minister and say that he likely forgot the provision in the existing Income Tax Act, which enables the executive to make a decision to provide for the application of added depreciation, if such decision is taken by the governor general in council. There can be no justification, in the face of this situation, for the long delay we have had at the hands of this government in giving to the house and the country even a semblance of the criteria, which the government intends to invoke in the application of this proposal for double depreciation. As a matter of fact, we are not even now acquainted with the facts as to whether or not the government has acquired for itself, pursuant to the Income Tax Act, the necessary power to implement the vague announcement made today by the Minister of Labour.
On orders of the day this afternoon we sought to ascertain from the Minister of
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Finance whether or not an order in council has been passed which would permit the implementation of this new policy of the government which, by the way, is intended to operate not for a period of years but for one year only. The Minister of Finance, for reasons best known to him, refused to say positively today whether or not the cabinet had in fact acted in the matter.


Donald Methuen Fleming: I did not do any
such thing.


Paul Joseph James Martin: We have the anomalous position of a reluctant Minister of Finance seeming to be unwilling to disclose whether or not the government had, after two and a half months, acted in this matter.
The announcement made by the Minister of Labour today, welcome as it is and to the extent that it goes, has not been clothed with any legal authority whatever in so far as this committee knows. Undoubtedly the governor in council could meet tonight, or perhaps it did meet between orders of the day this afternoon and this period tonight, and could have taken the necessary steps pursuant to the Income Tax Act, to acquire the necessary power to authorize the Minister of Finance or the Minister of Labour, who apparently now is being charged with responsibility in this matter, to implement the program announced a long time ago.
Why the government has waited so long to implement what, at least in principle, is a constructive approach to the solution in part of the problem of unemployment is difficult to understand. One can only suggest it is because this government is used to postponing decisions and to delaying action, and has once again forgotten the assurances that it gave not only to parliament but to the people of Canada in the budget which was introduced by the Minister of Finance shortly before Christmas. The fact is that this program will be implemented long after the event, although we were called here in November to deal with certain emergency legislation, designed mainly to deal with the problem of unemployment in the long term along with this scheme which is designed to deal with unemployment forthwith.
The fact is that this government did dedicate itself to the solution of the unemployment problem when it appealed to the people in 1958, but it has waited over 2J months before announcing the details of a plan that would give to municipalities and to corporations some indication of the kind of relief which the government intended. The government, therefore, stands indicted by these delaying tactics, this laissez-faire attitude and this lackadaisical manner in whcih it has

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approached the problem of unemployment in our country. One can only compare this anaemic approach to this serious domestic problem with the attitude taken by the government of the United States. That government has not hesitated to state the character of the problem. It has not hesitated, through its chief executive, to lay before congress proposals which are designed to meet this problem.


Mr. Graffiey:: Half of which we have already carried out.


Paul Joseph James Martin: One method which the United States proposed was the application of this principle of double depreciation for the assistance of what are called in that country, unashamedly, distressed areas. In this country the Minister of Finance takes exception to our referring to these surplus areas of unemployment as "distressed areas". He calls them chronically unemployed areas. I do not know what difference there is between a chronically unemployed area and a distressed or depressed area. The fact is that, in the chronically unemployed areas and in the distressed or depressed areas, we have the picture of thousands of men and women out of work.
Many of those who are out of work are in a very unhappy position because they have exhausted their unemployment insurance benefits and their right to supplementary payments under the Unemployment Insurance Act. They stand in need of assistance to the extent that it is provided by the municipalities, the provinces and this government under the public assistance program that stands on our statute books.
Let us compare the situation in the United States in this particular with the situation that we have today as a result of the vague announcement made under duress by the Minister of Labour. First of all, the Minister of Labour has announced that assistance will be given under certain criteria, and that areas will be divided into two groups, those with a labour force of more than 10,000 and those with less. Areas with a labour force above 10,000 must have been classified as labour surplus areas for 75 per cent of the 48 summer months, that is from May to October, between 1953 and 1960. I call the attention of the house to those years. They must also show a decline in industrial employment during this period. Those areas with a labour force below 10,000 must have been classified as labour surplus areas by the Department of Labour for half of the summer months between 1953 and 1960, and these areas must also show a general depreciation in employment.

The areas involved may either correspond to areas served by a national employment service office, or with the boundaries of a municipality. But we have this mere outline, which the Minister of Labour was content to accept as criteria and which was hastily devised, because yesterday we learned for the first time, from the Prime Minister which department of government was going to be responsible for this matter. It will not be forgotten that last Thursday we asked the Minister of Finance who was going to be responsible and we got from him a characteristic reply that revealed nothing. Then the Minister of Trade and Commerce disclaimed any responsibility, although this kind of program in the United States and in Great Britain is carried out under the administration respectively of the secretary of state for commerce in the United States and the president of the board of trade in Great Britain. We learned yesterday from the Prime Minister that the responsibility was going to lie with the Minister of Labour.
From the conduct of the ministry during these last few days under our interrogations I suggest that it was not clear under which department the responsibility for this matter would come. It is clear from the conduct of the ministers that the Minister of Trade and Commerce was to be charged with part of the responsibility. But, because of the reply given yesterday by the Prime Minister when I asked him which minister was to be in charge and he replied the Minister of Labour, it obviously became necessary for subordinate ministers to foregather and decide either in cabinet or among themselves, that the Prime Minister could not be let down, and that the responsibility in fact must now be entrusted to the overworked, overburdened, over-concerned Minister of Labour.
That is the situation. It is no wonder then that we learned from him today details so vague in character as to convey no real information to anyone in this country in regard as to what are the real criteria. The fact that the government has not adopted the criteria being used in the United States or in Great Britain is, of course, of no real concern apparently to the government. The government today in its announcement did not indicate what areas or what communities of the country could possibly benefit from this program. The Minister of Labour charged with this responsibility, sitting now on the treasury benches, when confronted with this situation said: "I ask the member for Essex East to say now whether or not the city of Windsor is to be designated as a distressed area," as though that was my responsibility, and as though I had concocted

this weak infant, this new instrument by which the government hopes to combat the problem of unemployment in Canada.
I have no hesitation in saying that Windsor certainly is an area which should receive at the hands of this government the benefits of any kind of program that will encourage industry to stay in the community, and will encourage industry to locate in that area in the hope of mitigating the problem which only now the Minister of Finance is beginning to recognize as really existent in this country at this time.


An hon. Member:: The Minister of Finance?


Paul Joseph James Martin: I did not mean to say the Minister of Finance. I must not put too many responsibilities on the Minister of Finance whose burdens now are obviously more than he can bear.
The Minister of Labour today in announcing this program refused to indicate what communities in Canada could in the opinion of the authors of this plan benefit from it. He would not tell us how many communities were covered. That was something that could be determined by hon. members opposite. That was something that could be determined by the member of parliament for Essex East himself, in so far as his own community was concerned. But to let municipalities in Canada know what the government proposes to do for them, that was not the responsibility of the government of Canada. He said in effect, let the municipalities themselves examine this proposal which I make; let them examine the criteria, and if they think that their situation comes within the embrace of our criteria then they can make application. That was an unfortunate attitude for the Minister of Labour to take in the face of this serious problem.
I say to the government that the responsibility which is on it to designate forthrightly the areas in Canada that it regards as coming within the category of a chronically unemployed or distressed area is one that should be recognized by it immediately. Let it say positively that Elliot Lake, Spring-hill, Cornwall, Peterborough, Windsor and other communities in Canada are areas which fall within the criteria instead of leaving this to surmise and guesswork. Our municipal officials are going to have a great deal of difficulty in analysing what this statement really means unless they are now going to be assisted by the research that the Liberal party has done in trying to interpret for the Minister of Labour what in fact his resolution really means.
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It would seem from what the Minister of Labour said today that some 11 communities in Canada may possibly come within the reach of this proposal for a system of depreciation. The minister has referred to Elliot Lake. I doubt whether, under the formula as he gave it to the house, Elliot Lake, ably represented in this house by the Leader of the Opposition, could properly qualify. No one I am sure will deny that the unemployment problem in Elliot Lake is such that it should be one of the communities in our country to benefit from this kind of proposal, which is very limited because it is to be extended only for one year.
The areas which, according to my interpretation, fall in this category-and I give this information for the benefit of these communities in Canada because the Minister of Labour refused to do so-seem to be Brantford, where the percentage of unemployed in the required period is 90.5 on the basis of the last available figure for 1959; Windsor, with 80.9 per cent; Rouyn, Val d'Or, with 76.2 per cent; Shawinigan, with 90.5 per cent; Cornwall, with 80.9 per cent; New Glasgow with 80.9 per cent; Lac St. Jean, with 76.2 per cent; Three Rivers, with 90.5 per cent; and Saint John, New Brunswick with 88.1 per cent. Then referring to the minor areas

two in number-they are Newcastle, with 85.7 per cent unemployed and Drummondville, with 78.6 per cent. That list of names does not include Springhill and does not include Elliot Lake.
I suggest to the Minister of Labour that if he carefully analyses what was prepared for him, he will find that the two examples he gave of communities capable of qualifying for this assistance are communities that will be denied this assistance under the very plan which he announced to the house today.
Have we not reached a sad state in this country, when the government, through the Minister of Labour, in the announcement of a plan has been reluctant to say which communities in Canada can in its judgment qualify for this assistance? That is exactly the position we have had portrayed today by the very limited announcement made by the Minister of Labour. The minister is in the best position to give us this information. The unemployment insurance offices in Canada are administered by the Minister of Labour through the unemployment insurance commission. He is the minister, above all ministers, who has the information which alone determines whether or not a particular area comes within the compass of this particular proposal and is to receive the benefit of the double depreciation allowance.

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It is difficult to understand why the minister is reluctant to give this information, except that it is in keeping with the attitude of this government from whom we have had to extricate information as though we were pulling teeth from the strongest jawbone of the strongest organism known to man. We have had to do that in order to elicit the kind of information which we feel the people who are suffering from unemployment in our country are entitled to have.
When one examines this particular proposal of the Minister of Labour, one finds certain conditions that perhaps require a great deal of explanation by the minister, and I hope he will give that explanation tonight. Let us examine the proposition of these two categories. First, areas of 10,000 or more. The ratio of applications for employment on file with the national employment service of paid workers, including those looking for work, according to this plan must have exceeded (a) 6 per cent in industrial areas of 25,000 or more for 75 per cent or more of the 48 months from May to October, 1953-60; and (b) 7 per cent in areas below 25,000 and above 10,000 for 75 per cent or more of the 48 months from May to October, 1953-60. Second, industrial employment must have declined over the period 1953-60.
I would like to remind the committee of one thing at this juncture. The basis for the figures, according to the Minister of Labour, that are going to be used is not the dominion bureau of statistics' figures but the figures of the national employment service. For two and a half years we have argued in this house that the real measure of unemployment was something approximating the number of people in receipt of unemployment insurance and the number of unplaced applicants; that is, the N.E.S. figures. The government has said that these were the wrong standards to use. We were told at the end of last session that the government was going to resort to a new formula. We were later told, before we reconvened in November, that the new standard of measurement of unemployment in Canada was to be one standard, the dominion bureau of statistics' figures.
Yet in the announcement made by the Minister of Labour today, he used the N.E.S. figures, thereby upholding and confirming the position which we in the Liberal party have maintained throughout the last two and a half years. If it is satisfactory to use the N.E.S. figures now, why is it not satisfactory to use those figures along with the unemployment insurance figures to determine the real state of unemployment in our country?
On the basis of the D.B.S. figures we are told by the government that some 693,000

people in the month of January, the last reported period, were out of work. If we are to add to that the numbers included in the standard used by the minister in his statement today, we would certainly be presented with a much higher figure.
With regard to areas below 10,000, the ratio of applications for unemployment on file with N.E.S. of paid workers, including those looking for work, according to the minister as I interpret it, must have exceeded 7 per cent for 50 per cent or more of the 48 summer months May to October, 1953-60. Industrial employment conditions likewise must have generally deteriorated over the years.
This is not the whole story. The minister has said nothing about the major agricultural areas of our country, where unemployment exists in very large numbers. According to his announcement today, agricultural areas are not included-


Charles Edward Rea: Order. I am sorry to advise the hon. member that his time has expired.


Douglas Mason Fisher: Mr. Chairman, I begin my remarks with an apology. Unfortunately we have not the services of the "Martin B.S." and we have not the statistics in relation to what communities or areas are going to come under this emergency legislation. But I must say I was disappointed, while listening to the hon. member for Essex East, to find that the Port Arthur-Fort William region does not seem to qualify for this particular type of assistance.
To talk about the Port Arthur-Fort William region may seem parochial at this particular stage, but I think what is taking place there in so far as concerns unemployment, and the structural developments in the whole employment picture, is typical of other places in Canada and certainly implies a very strong criticism of these proposals not unlike that made by the hon. member for Essex East. Whether or not we are a distressed area, the communities, including the two municipalities of Port Arthur and Fort William, have undertaken an employment survey of their own, supported by their own funds, and using local people. They had the advantage, through the kindness of the Minister of Labour, of the advice of Department of Labour economists. They are in the middle of a study of our employment situation.
In several months' time they will have a report analysing why our unemployment has skyrocketed very much in the last three years. It seems to me that the basis upon which the Minister of Finance and the Minister of Labour are approaching this matter of what is a distressed area or an area that is going to receive the advantage of these taxation allowances is a most unfair one.

I can explain that best by analysing the unemployment structure in our particular area, which has been of a very high level especially since 1956. We have a very high income level in the region of northwestern Ontario. I think it is one of the highest in Canada. But we have also had an increase in the last three or four years of a very marked unemployment problem. The reasons for this relate to the very nature of the industries.
We have three basic industries, transportation, pulp and paper and mining. I do not know of three industries anywhere else in the nation in which there has been more capital input, more productive gain and the creation of fewer job opportunities. I can give illustrations of this in the pulp and paper industry, where they can now cut twice as much wood as they could ten years ago, with the same labour force. Yet the full effects of all the mechanization in the woods and in the pulp mills, all the dieselization on the railways and the modern loading facilities at elevators, and all the improvements in mine machinery and techniques that have made it much easier to get a ton of ore up from the bottom of the mine, are only now really crystallizing and having their effects.
Our crisis has come upon us very suddenly. It was masked to quite an extent by the expansion in the last few years of the service industries. We have now just about as many bowling alleys, motels, barber shops and service centres as can be supported at this time by our basic industries. Yet if you are going to base this assistance through the tax act and tax concessions upon a look into the past back to 1953, you are not going to get a true picture of the crisis which our area faces. In other words, the whole of this legislation is based on a statistical look backwards to 1953.
It is apparent that the department is thinking in the terms that it is summer unemployment which gives you the real indication of the danger to a community. I insist that is wrong, and one of the reasons it is wrong in areas such as ours is that in the last five years there has been a complete transition in our employment pattern. Where once most of the wood was cut in wintertime, now it is cut in the summer and fall months. That transition would not be noticed at all by the statistical pattern that is going to be invoked in relation to this kind of assistance.
The Minister of Finance himself when he introduced in his budget speech pointed out the limitation on what you could do through these depreciation allowances. It still remains to me to point out that he has scuppered the whole project by the way in which it is going to be applied. I insist just as strongly 90205-6-165
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as the hon. member for Essex East representing Windsor may do that we have a crucial situation at the head of the lakes. If ever there was an area which needed assistance in terms of any kind of allowance for depreciation, it is ours and yet that fact is never going to be revealed from the statistical analysis which is necessary.
There is one other point I want to make clear. I fail to see what the federal government is doing in asking municipalities to deal directly with it and to inform it of their situation. What kind of an informal relationship is this when we have the traditional pattern in Canada of the municipalities, if not being the creatures of the provinces, at least in all their relationships with the federal government going up through the provinces. Surely that is the chain.
I cannot myself understand where the provinces fit into this picture. I know that Premier Frost, despite his political party, has a better understanding of our problems in northwestern Ontario than this government seems to have. He knows we have a crisis up there. He knows what has happened to industries of ours such as the Port Arthur shipyards and the Canada Car factories at Fort William. I doubt if we shall ever build another ship in the Port Arthur shipyards on a commercial basis in view of the changes which have taken place in the conditions of shipbuilding in this country and in the world generally. Yet it is apparent that this government has forgotten those promises, despite the kind words it gave us two years ago through the Minister of Public Works when he was so sympathetic, and so anxious that our big Canada Car plant should carry on. Here we have a huge plant which is now down to a level where 200 men are working in it though it has a capacity in terms of space and equipment to employ several thousand. We have a shipyard which has been working at a capacity of between 20 per cent and 25 per cent. Surely these are the very kind of industries which need this assistance; yet what hope is there under the formula we have had today?
I cannot claim to have understood the formula fully. There may be some loopholes which would enable us to sneak in, but I should like to suggest to the Minister of Finance that on the surface, on a quick interpretation, these concessions are not going to do my part of the country a single bit of good. I hope there are a good many members of parliament irrespective of party who recognize the same thing with regard to these income tax changes and who will get up and inform the Minister of Labour that this is not good enough.

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There is one section of the income tax change which is extremely welcome. I must compliment the minister for broadening this provision since he made his initial presentation with relation to education allowances. I should like to know from him whether nurses are included under his heading of technical education in regard to post-secretary school training. That is not clear to me. Certainly where nurses have had a grade 12 education, generally matriculation is considered the completion of secondary level. In many parts of Canada they go on and train on a full-time basis for three years. It costs their parents in many cases a great deal of money even though there has been a trend to paying them a small amount of money as spending money. I think we would be very much indebted to the minister if he would indicate that nurses qualify for this particular provision.


Donald Methuen Fleming: Perhaps I may deal with that question now though we shall be considering it when paragraph 12 is before us later. I should think that nurses attending a nursing school on a full-time basis where the course is open only to graduates of a secondary school would qualify.


Douglas Mason Fisher: I am very pleased to hear that. There is one other thing which is not a matter of interpretation and I think it is regrettable. I am noticing that many of the witnesses who are appearing before the Senate committee on manpower are stressing the need for people after they complete their normal education to carry on with their own development themselves. It has always been the attitude of the income tax authorities that this post-graduate training that they do in part time and spare time increases their capacity or ability to earn more revenue, so the expenses they incur in acquiring this education have never been recognized as deductible for tax purposes.
I wonder whether the minister has not considered that he could give a fillip to both summer training and academic, technical and vocational training of many kinds if he were to provide that seriously undertaken part time training for a graduate degree or for extra vocational training of a journeyman kind could be considered for deduction. It seems to me this is one of the incentives which we could give to a great many people in Canada to improve their talents or improve the position and the ability of the whole labour force of Canada.
The more complex parts of the income tax amendments are beyond my capacity to criticize or to make any suggestions about, but I would reiterate to the minister that it is most disappointing that the indication

in the statement we have had today from the Minister of Labour is that this is going to do so little for so many parts of the country which know they are in a crisis situation in so far as unemployment is concerned.


Donald Methuen Fleming: The hon. member for Essex East had a very free rein earlier this evening and enjoyed it. It is only right that after he had enjoyed that free rein an hon. member of the C.C.F. opposition should have a similar opportunity to discuss the same question. I think it is quite apparent, Mr. Chairman, that the subject which the hon. member for Essex East chose as the subject of his discourse tonight is quite outside the scope of discussion here.
The suggestion was made by the hon. member for Bonavista-Twillingate that hon. members should be permitted to discuss the resolution generally. I had suggested that we should deal with the paragraphs of the resolution seriatim, but his suggestion was that there should be some opportunity for a general discussion.
Mr. Chairman, nobody took any objection to that course but the subject chosen by the hon. member for Essex East for his discourse is quite outside the scope of the resolution. The hon. member himself reminded us of that. The resolution proposes certain amendments to the Income Tax Act and in the light of this general discussion I take it that anything that relates generally to the proposed amendments, I suppose, is the sort of thing the hon. member for Bonavista-Twillingate had in mind; but this subject lies completely outside the scope of this resolution.
The hon. member is talking about something that he says was done or something that he feels should have been done by executive action, quite outside the scope of these amendments, under other provisions of the Income Tax Act.
We have the hon. member's speech and we have had part of a speech by an hon. member of the C.C.F. opposition on the same subject. May I respectfully suggest that we resume our discussion on the resolution to amend the Income Tax Act.


John Whitney Pickersgill: Mr. Chairman, on the point of order that has now been raised by the Minister of Finance, the minister will recall and if Your Honour were in the house Your Honour also will recall that only as late as this afternoon on the orders of the day my friend the hon. member for Kenora-Rainy River inquired whether under a certain section of the Income Tax Act an order in council had been passed to implement the policy announced in the budget. The minister preferred not to take us into his confidence on

that point presumably because there has been no such order in council, or at least we are entitled to assume that until we are advised to the contrary, and are told that an order in council has been passed.
Anyone who examines the budget speech will see at once-and I do not need to take up the time of the committee to read it- that one of the main features of the income tax changes announced by the Minister of Finance in the budget was this change to allow double depreciation.
Until the government condescends to tell us, as it has not yet seen fit to do, we have no means of knowing whether the government proposes to do that by a new and specific enactment or whether it proposes to take advantage of some of the sections of the present Income Tax Act and do it by order in council. The government has not yet condescended to say how this is going to be carried out. Therefore, until we are told specifically how the government does intend to do that, we have every right to assume that in
some way in these income tax resolutions_____
perhaps some hidden way, in some obscure language that has not yet been explained to us-there is a provision which would carry out this intention of the government.
Since this was part of the income tax change suggested in the budget and since these resolutions are the only matters before the committee at the present time to carry out these changes in the income tax announced by the minister in the budget, I submit that it is perfectly proper for a discussion to take place on these resolutions as to how these things are to be brought about and whether the scheme for carrying out what the minister proposed, which was announced to us today on the orders of the day, is or is not an adequate scheme.
We have never yet been told on what legal basis this double depreciation is going to be extended. In view of all these circumstances, it seems to me this is the only possible place for this matter to be debated under our rules at the present time and that we are perfectly entitled to debate it and even to urge that the government should not take so drastic a step as this by order in council but that it should make a specific and well-defined legislative provision for it.
That seems to me to be all the more at issue when we are told that in some mysterious fashion the municipalities which in the budget we were not told were to have anything to do with this are being brought into it in some fashion. We want to know what is the legal basis for bringing in the municipalities.
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Donald Methuen Fleming: Mr. Chairman, may I say this. The hon. member does not need to be told that, whatever may be the proper legal source of the power which has been exercised by the governor in council as was announced today by my colleague the Minister of Labour, the fact is that there is no proposal before the committee for enactment of an amendment to the Income Tax Act dealing with this matter. That is the only matter before the committee at this time.
Accordingly, while there may be a proper time for the kind of discussion the hon. member for Essex East sought to initiate tonight, this obviously is not that time or place.


Paul Joseph James Martin: Mr. Chairman, may I add my feeble voice to that of the hon. member for Bonavista-Twillingate who, I believe, has stated the situation correctly.
It is true that in so far as we know, although there may be something in the resolutions before us that is an authority not apparent, and although there is nothing directly bearing on this point in these resolutions, the fact is that the announcement made by the Minister of Labour today follows an announcement made by the Minister of Finance in his budget speech, particularly in those passages to be found at page 1007 of Hansard for December 20, 1960.
At that time the minister indicated that the Income Tax Act already allows a rapid rate of write-off for current capital expenditures in the field of research. The minister made reference to this fact to support his announcement that had to do with his observation which will be found also at page 1007 when he said that the purpose of this new program, namely the double depreciation program was to:
-attempt to cope with this problem-
The problem of unemployment-
-in the most effective way by encouraging new industries to establish themselves and provide additional employment in such areas.
When we asked the Minister of Finance in January what the details of this plan were he told us, as I have already recounted, that this would be given the house by him during the course of the discussion on the budget resolutions.


Donald Methuen Fleming: No, the minister did not say any such thing.


Paul Joseph James Martin: Knowing the Minister of Finance who has the enviable capacity-


Donald Methuen Fleming: The minister said no such thing. Will the hon. member produce the statement in Hansard to which he refers? I invite the hon. gentleman to do that.

Income Tax Act


Paul Joseph James Martin: I cannot look it up when I am talking. Perhaps the Leader of the Opposition or the hon. member for Bonavista-Twillingate will look it up. I have done a certain amount of research. It would be difficult for me to follow all the pearls of wisdom uttered by the Minister of Finance and if I cannot readily put my hands on it the minister will understand it is only because I have to be somewhat selective when I come to dealing with his observations in this chamber.
The fact is that that was the position taken by the Minister of Finance as I well recall it. The minister now says we are not to be given the opportunity of discussing the announcement that arises out of an income tax provision, an announcement made today by the Minister of Labour.
If that position could be properly taken and supported by the Chair-and that I gravely doubt, knowing the high quality of judgment that the Chair possesses-we would be denied the opportunity of discussing this matter for some time. There would be no opportunity to ask questions except on orders of the day; and you know, Mr. Chairman, that when we ask questions we sometimes have great difficulty in being heard and in putting our questions, and we do not always receive the kind of complete replies to which we are entitled.
That being the case, we are certainly entitled to ask ourselves: are we not going to have an opportunity to discuss this important matter? This was part of the budget of my hon. friend. What we are discussing now is not a proposal of the Department of Labour but part of the new budget. We are now told by the Minister of Finance that although this is part of the new budget we cannot discuss it when we are discussing the budgetary resolutions, particularly those having to do with income tax amendments. That is the gist of the position taken by the Minister of Finance. The Minister of Finance not only should not seek to deny this discussion but should address himself at once to the question again put by the hon. member for Bonavista-Twillingate: was an order in council passed? If an order in council was passed, it would have been passed under the Income Tax Act, amendments to which we are now considering. I submit, Mr. Chairman, that to deny us this right now would be to deny hon. members an opportunity of discussing under our procedures something that is of vital interest and is perhaps one of the most vital subjects that we have had the opportunity of discussing since this session began.

The minister brought forward no authorities for his position. He is obviously embarrassed by this particular debate. He speaks in a low tone and thereby seeks to enshroud his words in an atmosphere of authority, but he produces no authority. I suggest that this discussion is perfectly in order and that we ought to be allowed to proceed with it.


Lester Bowles Pearson: On the point of order, Mr. Chairman, the minister is taking the position that the regulations regarding the designation of areas of surplus unemployment brought in at last this afternoon by the Minister of Labour-regulations that we consider to be limited, restrictive and inadequate-have nothing to do with the budget resolution before the committee and that therefore we are not at liberty to discuss this matter. But, Mr. Chairman, as found on page 1065 of Hansard, when the hon. member for Laurier asked the minister on January 16 if he could indicate to the house the areas of the country where unemployment was high, to which areas he promised measures of assistance in his budget speech, the reply to that question by the minister was that in deference to constitutional practice the house would expect that the budget proposals would be adopted before this designation could be made.


Donald Methuen Fleming: Go on.


Lester Bowles Pearson: What the minister said was:
-would be adopted at least In general before the government proceeded on that course that was proposed in the budget speech.
Therefore the minister himself admitted that there was a relationship between this matter and the discussion of the budget resolutions and that he himself could not give us the information required until we had adopted the budget resolutions covering that as well as other points. Surely, Mr. Chairman, now that these budget resolutions are before the committee for consideration, we are entitled to discuss this matter of the designation of certain areas of surplus unemployment in relation to these resolutions.


Charles Edward Rea: I think hon. members will realize first of all, of course, that the Chair does not make the rules of the house. The job of the Chair is to try to interpret the rules. When the hon. member for Essex East first rose and started talking about double depreciation I began to read the resolution very carefully and I have read it three times. Up to this point I have not been able to find in the resolution any reference to double depreciation.
I have no other alternative than to suggest to hon. members that they try to be

more relevant to the particular resolution that is before us. We are not debating the budget. We are debating one resolution of the budget. I am sure hon. members will appreciate the position that the Chair has to take and will do what they can to cooperate.


William Hector McMillan: Mr. Chairman, there are three main changes in the budget resolution that have to do with reductions in taxation. First of all there is the proposed reduction in the corporation tax. It is proposed that the 21 per cent or lower rate should apply to the first $35,000 instead of the first $25,000. This will mean that a corporation with a net income of $30,000 will save $1,500 or a corporation with a net income of $35,000 or more will save about $3,000. This is hardly enough to put one man to work and it can hardly be considered a stimulus to the economy.
This afternoon I heard the Minister of Labour talk about double depreciation and, after listening to the formula he put forward, it is my opinion that no greater farce has ever been presented to the House of Commons. I can quite understand that the Minister of Finance is not very much interested in unemployment.


Mr. Woolliams:: On a point of order,
Mr. Chairman, I thought you had already ruled that this subject was out of order.


William Hector McMillan: He has not ruled that we should not touch on this subject. Either we should deal with unemployment or we should not do so, and I can readily see in this announcement the idea of the minister that there is no emergency with respect to unemployment.
The second change in the Income Tax Act is the elimination of the 4 per cent tax imposed on investment income exceeding $2,500. I can quite readily see that this is a measure to entice people to buy government bonds. Government bonds have been very unpopular with investors, and by removing this tax I think the minister will attain his objective of getting more people to buy his heretofore rather unpopular government bonds.
The third decrease proposed in the resolution amending the Income Tax Act has to do with tuition fees of university students. Any student in full-time attendance at a university will be allowed to deduct his tuition fees when computing his income tax. I think this is a very good measure and I wish to commend the minister for it. In my opinion the minister might also have included in the resolution a provision by which those people who obtain an honorarium for their work in
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voluntary fire fighting companies might have received some consideration in computing their income tax. In different parts of Ontario-and I think the same is probably true across Canada-a number of small municipalities are having difficulty in getting volunteer firemen and keeping their fire fighting companies up to strength.
The government is so anxious to get more money all the time that it has made a concerted drive with respect to a number of these firemen and is looking into their back pay. I know that in some areas many of these firemen did not report the income they received as an honorarium for their services as volunteer firemen. These men devote their time to their municipalities and I think they should get some consideration. It is only necessary to list some of their duties to establish this point. They are the backbone of fire protection in our small municipalities. The majority are well trained in fire fighting, rescue work, first aid and other work.


Charles Edward Rea: Order. Perhaps the hon. member could indicate to me any reference to firemen and income tax in this resolution.


William Hector McMillan: I might say that earlier, Mr. Chairman, I referred to the fact that on June 25, 1956, the chairman of the committee allowed hon. members to roam all over and at that time the opposition roamed to such an extent that their remarks covered 24 pages. They referred to different classes of people to whom they thought consideration should be extended under the Income Tax Act. After this had gone on for 24 pages and after the hon. member for Greenwood had said that they had gone all over creation, the hon. member for Eglinton rose and made a speech in the same vein that took up six more pages.


Charles Edward Rea: Perhaps the hon. member and I are a little older now than we were then and do not roam so much. I think perhaps the hon. member had better stick to the resolution.


John Whitney Pickersgill: Surely, Mr. Chairman, we are not going to have our rights abridged in this committee so that it is not possible for us to say that some persons other than those who are actually getting relief under the Income Tax Act should also be included, particularly in view of the fact that the present Minister of Finance, as the hon. member for Welland has just pointed out, covered pages and pages of Hansard doing that precise thing on June 2, 1955. At that time, however, we had a minister of finance who was respectful of the rights of members, who listened politely to what the hon. gentleman said and

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replied to his arguments instead of raising points of order. I suggest, sir, that my hon. friend from Welland is suggesting that this particular provision apply to some other class of taxpayers and that certainly is within the ambit of this debate if we are to have any debate at all.


Charles Edward Rea: I think perhaps the hon. member for Welland and I understand each other fairly well. I am sure that he will want to come back to this resolution. He was wandering quite a bit, and I am sure he will realize that.


William Hector McMillan: Mr. Chairman, I should like to make a plea for the firemen. I shall do so very briefly. These firemen are put to a lot of expense as a result of their work in the municipality. They receive only an honorarium of $200 or less. I feel that the Minister of Finance might give them consideration at this time or when he introduces his next budget. I shall not make any further reference to these firemen, but I would appeal to the minister to remember them either at this time or later when he introduces his budget. I hope that will be this month.
The second category of changes relates to the penalty clauses. These penalty clauses are applied in respect of investment companies and in respect of pension plans, when a certain percentage of their income from investments is not derived from sources in Canada. In other words, they do not fare as well under the Income Tax Act unless they invest in Canadian securities. Federal government bonds are considered the No. 1 investment in Canada. Trust funds are usually invested in Canadian government bonds. In this connection, I would remind the Minister of Finance that the unemployment insurance fund is a trust fund, and as a result of poor investments a loss of over $50 million has been suffered in the last three years.


Charles Edward Rea: Order.


Gordon Harvey Aiken: Mr. Chairman, on the point of order-


Charles Edward Rea: Order; I think the hon. member realizes that we are not discussing the unemployment insurance fund. We must stick closer to this resolution.


William Hector McMillan: I do not intend to discuss the unemployment insurance fund; except to say this-


Charles Edward Rea: Order; the Chair has been very lenient with the hon. member for Welland. I do not believe he should discuss the unemployment insurance fund.


William Hector McMillan: I will not mention that word again. However, these same people who
fMr. Pickersglll.l
have lost so much money in that other fund have their money in pension funds; and if the minister, by his policy, can lose so much money in one fund, why can he not lose a lot in another fund? If his fiscal policy is the same as it has been for the last three years, he will cause $50 million loss or more in these pension funds.
The third category of changes is the withholding taxes by which individuals and corporations from abroad have a deduction in their dividends of 15 per cent up from zero and 5 per cent. The minister said this would discourage provinces and municipalities from borrowing abroad. However, when he was in New York he said this measure was not designed to keep out foreign capital. I do not believe it can do both. He says it will not discourage foreign capital from coming into the country, and at the same time he says it will discourage municipalities and provinces from borrowing in New York. I referred to this provision during the budget debate. If the municipalities and the provinces do go to New York to borrow funds this government, in effect, will be taxing them on new construction, new roads, schools and so on. These New York funds will cost the municipalities and the provinces more because they will have to make up the 15 per cent tax on the interest from these bonds.
I should like to see Canadians develop Canada to as great an extent as they can. However, I feel we are overemphasizing the amount of United States capital in Canada. The newspapers lead us to believe that an evil day will arrive when United States capital will be drawn out of Canada. I believe that people forget just how much United States capital in Canada is invested in plant, pipe lines and other immovable assets. I feel this situation has been rather overemphasized.
I hope to ask some questions in committee on certain phases of the Income Tax Act. I am sorry, Mr. Chairman, that I referred to the unemployment insurance fund, but I had to mention it at least once in order to compare it with the pension fund in which the people of this country could lose money if the fiscal policy is conducted in the future as it has been in the past.


Herbert Wilfred Herridge: I shall, as usual, Mr. Chairman, be brief and strictly in order, the precedent having been set by the hon. member for Welland. First of all, I want to say that I am sure there are numerous small companies that will welcome the first clause in this income tax resolution which provides that the amount of income on which the tax rate of 21 per cent shall apply will be increased from $25,000 to $35,000. I know of a number of small companies, particularly those

operating in the primary industries, that are finding conditions not too easy at the present time. This concession will be welcomed by those companies which will, in some cases, continue to operate under great difficulties and in other cases will try to expand, still under great difficulties.
However, Mr. Chairman, in that connection I may say I have always felt there was a certain academic approach to taxation on the part of ministers of finance and, more particularly, on the part of some of the senior officers. I say that with all respect for their ability and the service they are performing for this country. I understand that the Minister of Finance has had a very distinguished career in the legal profession, but that is very limiting. In some respects, lawyers are excellent people. However, I have found them to be something like preachers in that they are very theoretical. I do suggest it would be a good thing if the minister and some of his senior officials were to visit certain typical small industries in this country because when they are laying out rates of taxation on paper it is often done on the basis of arithmetic and without a great deal of knowledge of the circumstances under which certain of our people operate.
In illustration of this I might say that I know of one small company operating under considerable difficulty with all the risks that are involved in the forestry and lumber industries. There are many that are not seen by the Minister of Finance or on occasion by their senior officials. This company has an investment of close to $100,000 but would realize less profit than a ten by ten stall dispensing coca cola and comic magazines to school children. These different circumstances do exist. I suggest, as I have suggested before, that it would be a good idea, particularly for some of the senior officials, to acquire firsthand knowledge of the circumstances under which certain typical industries in this country operate.
With respect to clause 12 of the income tax resolution, I might say that I was very glad to see the original clause and to know that there has been some amendment widening the basis of this clause. This will be of considerable assistance to those persons with limited financial resources seeking a university education. I would suggest that the minister give consideration to the inclusion of living expenses up to a certain family income limit. I am not suggesting that children of wealthy families should receive this consideration, but certainly those children in families of limited incomes should be given some sort of consideration in this regard. I feel that we should do everything
Income Tax Act
possible to make certain that as many young people as possible obtain university education.
Mr. Chairman, I should like very briefly to refer to the situation in respect to those persons who engage voluntarily in the extinguishing of fires, particularly in small communities. I should like to support the remarks made by the member for Welland in his suggestion that some consideration should be given to those voluntary fire brigade men who receive honorariums for their services as such. Mr. Chairman, in view of your anxiety I shall retreat from this attack.
I want very briefly to mention that the Canadian Medical Association has made representations to the minister with respect to the deduction of expenses for refresher courses. This is not mentioned in this resolution Mr. Chairman. I am bringing this to the attention of the minister for his consideration when he is dealing with the main budget. I feel it is necessary, certainly for rural practitioners, to have the opportunity of taking refresher courses, and it will be realized by all that their incomes differ greatly from the incomes of those who specialize in the cities. I would urge the minister to give consideration to these representations of the Canadian Medical Association when he is dealing with his main budget later this year.


John Whitney Pickersgill: I should like to address myself to the first few words in this resolution which are:
Resolved that it is expedient to introduce a measure to amend the Income Tax Act and to provide among other things:
It will be noted that "other things" which the government is recommending are specified, but it does not tell us what the government is in fact recommending. I think there will be very great disappointment in regard to many of these other things. There are one or two other things which I think ought to be included so that it will be possible for us to pass this resolution with expediency.
Instead of relying upon an order in council made in secret I think that the government should amend the Income Tax Act specifically to carry out the intended policy announced by the Minister of Finance on December 20, which appears at 1007 of Hansard. His statement contained therein is as follows.
I fully share this optimism about the capabilities of Canadian industry. I am anxious to do everything within our means to encourage initiative and enterprise. As a powerful incentive to these ends I am pleased to announce measures to fulfil three major purposes: first, to assist new industries in areas where there is a substantial degree of continued unemployment over the years;
I would argue, sir, that there should be specific provisions put into the act by this

Income Tax Act
parliament at this session to cover that because, as the minister said, it was a major new thing. I contend that a major new thing should be done by parliament and not done, under the colour of some provision already in the Income Tax Act, by order in council. It seems to me that if the minister thought this important enough to include in his budget speech as a new proposal, it should be among the "other things" referred to in the second line of the resolution now before us.
As found at page 1007 of Hansard, the minister goes on to say as follows:
-second, to aid the development of new products from processing operations not hitherto carried on in Canada;
I think there should be a specific provision spelled out so that we in parliament know what this is and have some voice in its condition and some say with regard to how this is to be done instead of its being done in secret by the governor in council. I suggest that this provision should be included in this resolution, and it will not be expedient to pass this resolution, in my opinion, unless that provision is included.
The minister goes on to say:
-third, to encourage the production of new types of goods. Double depreciation will, at the option of the taxpayer be allowed in respect of capital expenditures incurred in the first year for these purposes, but may be applied in any of the first three years.
I would argue, sir, that it may be possible for the governor in council to do that under existing law, but I suggest that when the existing law was made, the use of the law for this purpose was not contemplated. For that reason and because this is new I regard this as something that should be done by parliament and not by order in council.
We have been told something about how one of these three things was going to be accomplished. I am not going to transgress your ruling, sir, by discussing this but I must say that we were not told by the Minister of Labour under what authority, what law, or what statute the policy announced today was being carried out by the governor in council or by the Minister of Labour. We do not know. We are still in ignorance of this.
I would point out again that on December 20 the Minister of Finance produced this as a new policy. I repeat that it is my opinion that parliament should decide the main lines of that policy not in detail but in a broad sense. These details should be decided by parliament and not by the governor in council. Parliament should decide which are the areas of continued unemployment. It is this parliament that is going to relieve certain taxpayers of burdens that other taxpayers will have.

That is something that should be done by parliament here and not by governor in council.
I say that the minister should bring in amendments to this resolution-obviously he cannot argue that this would effect the ways and means because he proposes to do it in any event by order in council-and incorporate them in it so that we as the representatives of the people may have a voice in regard to how these things are done. I would urge the minister to give consideration to the suggestion that the law in respect of these policies be included in this resolution instead of these things being done by order in council or in the cabinet. The law in respect to the policy, to which the government attached so much importance last December, should be dealt with by parliament.


Paul Joseph James Martin: Mr. Chairman, I think the argument of the hon. member for Bonavista-Twillingate to which we have just listened is one that cannot be passed over lightly by the Minister of Finance. The hon. member for Bonavista-Twillingate argues that the Income Tax Act-I think it is section 11 -was never intended to be used in the particular kind of emergency covered by the announcement made today by the Minister of Labour, and that in fact the amendments now before us should include some provision that would deal directly, legislatively, with the authority which the government must have in order to enable it to implement the announcement made in this regard by the minister on December 20 last.
The hon. member for Bonavista-Twillingate further argued that he thought the matter was of such importance that it could very well be dealt with more comprehensively in a measure that went way beyond a mere amendment to the Income Tax Act. I think the minister owes the committee an answer to the very useful observation made by my colleague.
When the minister is replying he might also seek to satisfy our curiosity, already exhibited a number of times today, as to whether or not in fact an order in council under the Income Tax Act has been passed, and if one has not been passed, whether it is the intention of the minister-


Donald Methuen Fleming: Order.


Charles Edward Rea: Order. The hon. member was referring to what might be put into the Income Tax Act. That was quite in order. But I think the hon. member is going a little further than he is entitled to go in asking what has or has not been done in an order in council.


Paul Joseph James Martin: Mr. Chairman, perhaps I could just put my question, because I do not wish to be out of order.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: I do not know why hon. gentlemen take this matter so lightheartedly.


Thomas Miller Bell: Light-heartedly? The hon. gentleman has been out of order all day.


Paul Joseph James Martin: Is it the intention of the government to deal with this matter, not by the amendments now before the committee but to provide an order in council in the case of each municipality?


Charles Edward Rea: Shall paragraph 1 carry?


John Whitney Pickersgill: Mr. Chairman, a most serious suggestion has been put to the minister and surely he is going to have something to say about it.


Donald Methuen Fleming: Mr. Chairman, I can briefly inform the committee that the bill to be introduced following the resolution, when it is adopted, makes no reference to this subject either, so that, as with the resolution, this discussion lies quite outside the ambit of the bill.
It quite clearly follows that the matter is one for executive action within the terms of the existing legislation. That was made abundantly clear this afternoon in the announcement made by my colleague the Minister of Labour. I think the matter is quite clear.
The clauses of the Income Tax Act and the powers thereby conferred upon the executive are precisely the same as those employed by the former government, of which both the hon. member for Essex East and the hon. member for Bonavista-Twillingate were members, when the government applied the rules as to deferred depreciation a decade ago.


John Whitney Pickersgill: Mr. Chairman, I was not a member of the government at that time. I would just recall that fact to the hon. gentleman's mind.


Donald Methuen Fleming: The hon. member was not a member of the government, that is true. The hon. member for Essex East was. The hon. member for Bonavista-Twillingate had the opportunity, because I think he will not deny that he was a power within the government.


John Whitney Pickersgill: I do deny that. I have never made any pretentions of that character and I never intend to do so. But that is not really very relevant to the business before us.
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If one may put it this way, I was shocked but not surprised by the latest observation of the Minister of Finance, who said that the bill to be founded on this resolution contained no reference to these matters. He said "contained", or some verb in the past tense at any rate,-


Donald Methuen Fleming: No, the present tense.


John Whitney Pickersgill: -or the present tense. In other words, the minister implied, and indeed said that the bill was already in existence.


Donald Methuen Fleming: Of course it is.


John Whitney Pickersgill: The minister makes it worse; he now says, "Of course it is".


Donald Methuen Fleming: The bill is ready to be introduced. It must be ready as far as we can prepare it, and that has always been the practice.


John Whitney Pickersgill: Mr. Chairman, I think I have the floor. Here is the minister coming to parliament and asking us to resolve that it is expedient to introduce this measure, and he now tells us that it does not really matter what we do.


Donald Methuen Fleming: I did not say that at all.


John Whitney Pickersgill: His conduct in this parliament is such that he has told us the bill is already there and that it does not matter what we do about this resolution, his bill is going to be introduced. In other words, this stage is just a rubber stamp for this arrogant minister whose bill is already in existence. What is this debate about? What is parliament about? If this arrogant government says it has made up its mind already, the bill is there, and we cannot change it, what are we debating? Why do they use this language, that it is expedient to introduce the measure?
This is just another evidence of the way in which this government carries out its policies. It carries out its new policies by secret orders in council based on legislation which was never designed for this purpose. Then when we suggest that certain things should be put into the bill, the introduction of which they tell us they consider to be expedient, they say nothing can be done about it. They say, "It is our bill. It is going to be done that way and it does not matter at all what you in parliament say about it".


An hon. Member:: Utter nonsense.


Charles Edward Rea: Shall paragraph 1 carry?


[Stage Direction]
Paragraph agreed to.
[Stage Direction]
Income Tax Act
On paragraph 2.
William Hector McMillan: Mr. Chairman, I think this paragraph and the next one are penalty paragraphs unless money is invested in Canadian securities. Suppose the amount specified here is not invested in Canadian securities in respect to pension funds and other funds; what tax would then apply?


Donald Methuen Fleming: Mr. Chairman, I think the hon. member is on paragraph 3, and not paragraph 2.


John Whitney Pickersgill: Paragraph 2 was carried some time ago.


Donald Methuen Fleming: It was not.


Charles Edward Rea: I think the hon. member intended to ask his question with regard to paragraph 3. Shall paragraph 2 carry?


[Stage Direction]
Paragraph agreed to.
On paragraph 3.
Donald Methuen Fleming: With regard to paragraph 3, there is an amendment. It will be recalled by hon. members that for the convenience of the committee I gave notice of the various amendments on February 2. They are to be found in Votes and Proceedings of that day, in the appendix at pages 2 and 3.
There is an amendment to this particular paragraph. I would ask my colleague the Minister of Mines and Technical Surveys if he would move this amendment to paragraph 3.


Mr. Comlois moved: that the resolution be amended as follows:
By striking out paragraph 3 thereof and substituting therefor the following:
"3. That for taxation years commencing in 1961 and subsequent taxation years a corporation will qualify as an investment company only if not less than 85 per cent of its gross revenue for the year is from sources in Canada (which percentage is hereinafter referred to as the "sources requirement") and not more than 25 per cent of its gross revenue for the year was from interest (which percentage is hereinafter referred to as the "interest requirement"), except that
(a)	where less than 85 per cent but not less than 75 per cent of the gross revenue of the corporation for its taxation year commencing in 1960 was from sources in Canada, the sources requirement for the taxation years of the corporation commencing in 1961 and 1962 shall be read as "75 per cent":
(b)	where less than 75 per cent of the gross revenue of the corporation for its taxation year commencing in 1960 was from sources in Canada, the sources requirement for the taxation year of the corporation commencing in 1961 shall be read as "60 per cent" and for the taxation year of the corporation commencing in 1962 shall be read as "75 per cent".
(c)	where more than 25 per cent but not more than 30 per cent of the gross revenue of the corporation for its taxation year commencing in 1960 was from interest, the interest requirement
[The Deputy Chairman.)
for the taxation years of the corporation commencing in 1961 and 1962 shall be read as "30 per cent"; and
(d)	where more than 30 per cent of the gross revenue of the corporation for its taxation year commencing in 1960 was from interest, the interest requirement for the taxation year of the corporation commencing in 1961 shall be read as "40 per cent" and for the taxation year of the corporation commencing in 1962 shall be read as "30 per cent"."


Charles Edward Rea: Hon. members have no doubt read this amendment in Votes and Proceedings. Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
Charles Edward Rea: Shall paragraph 3, as amended, carry?


William Hector McMillan: Perhaps the minister would now answer my question. What would be the taxation on these funds if they did not meet the requirements under paragraph 3 as amended?


Donald Methuen Fleming: Mr. Chairman, the tax rate at the present time is 21 per cent, consisting of 18 per cent general tax and 3 per cent contribution to the old age security fund. This makes a total of 21 per cent. That is the low rate that is applied to these investment companies.
If they do not qualify for that low rate within the terms of the proposed requirements, then the ordinary general rate would apply.


Charles Edward Rea: Shall paragraph 3, as amended, carry?
Paragraph 3 as amended agreed to.
Paragraphs 4 and 5 agreed to.
On paragraph 6.


Donald Methuen Fleming: On paragraph 6 there is an amendment which appeared in Votes and Proceedings and I would ask my colleague the Minister of Mines and Technical Surveys to move this amendment.


Mr. Comtois moved:: That the Income Tax Act resolution be amended by striking out all the words in paragraph 6 thereof following the words "December 20, 1960" where they first appear therein and substituting therefor the following:
"except bonds or other obligations issued after December 20, 1960, for the issue of which arrangements were made on or before that day with a dealer in securities, if the existence of the arrangements for the issue of the bonds or other obligations can be established by evidence in writing given or made on or before that day."


Charles Edward Rea: Is it the pleasure of the committee to pass this amendment?


Some hon. Members:: Agreed.
Paragraph as amended agreed to.

On paragraph 7.


Donald Methuen Fleming: On paragraph 7, again there is an amendment of which notice was given in Votes and Proceedings of February 2 and I would ask my colleague the Minister of Mines and Technical Surveys to move it.


Paul Comtois: That the Income Tax Act resolution be amended by striking out subparagraph (b) of paragraph 7 thereof and substituting therefor the following:
"(aa) interest on any obligation where the evidence of indebtedness was issued after December 20, 1960 if the obligation was entered into under an agreement in writing made on or before that day, under which the obligee undertook to advance, on or before a specified day, a specified amount at a specified rate of interest or at a rate of interest to be determined as provided in the agreement, to the extent that such interest is payable
(i)	in respect of a period ending not later than the day on or before which the obligation is expressed to be redeemable, if the obligation is expressed to be redeemable on or before a specified day, or
(ii)	in respect of a period ending not later than one year after the day the obligation was entered into, if the obligation is not expressed to be redeemable on or before a specified day, and for the purposes of clause (i) hereof an obligation shall be considered to be redeemable on or before the first day on which the obligee is entitled to demand redemption thereof,
(b) interest on any bond, debenture or similar obligation issued after December 20, 1960 for the issue of which arrangements were made on or before that day with a dealer in securities, if the existence of the arrangements for the issue of the bond, debenture or similar obligation can be established by evidence in writing given or made on or before that day, or"


Charles Edward Rea: Is it the pleasure of the committee to adopt the amendment?


[Stage Direction]
Amendment agreed to.
On paragraph 7 as amended.
Paul Theodore Hellyer: Before this clause as amended is carried would the minister care to express an opinion as to whether or not this clause amounts in its effect to another tax on the municipalities and provinces in connection with their borrowing? Reducing the yield to foreign investors would necessarily increase the cost of borrowing to Canadian municipalities and provinces and therefore increase the burden which presently exists due to the high cost of raising money.


Donald Methuen Fleming: My answer to that question is, no. This is not an additional tax on municipalities. It is, however, an increase in the withholding tax as applied to the payment of interest by the municipality to nonresident bond holders in respect of bonds issued after December 20, 1960. I stress the fact that this resolution and the withholding tax thereby proposed have no application whatever to any outstanding obligations of 90205-6-166J
Income Tax Act
municipalities up to the date of the budget. In this respect the proposal differs from one which Mr. Ilsley brought forward some 20 years ago. He put forward a similar proposal and at that time he proposed to apply it to all outstanding issues as well as to future issues. There was no little flurry over that, and the resolution in its original form was withdrawn by Mr. Ilsley.
This will have no effect whatever on issues outstanding at December 20, 1960. With respect to issues after that date I think the hon. member will agree that it is very much better for municipalities to do the raising of funds by their bond issues in Canada rather than abroad. I am sure the hon. member must share the concern which I have felt and expressed in budget speeches in previous years over the raising by some municipalities and some provinces of loans in the New York market. They were losing on account of the premium on the Canadian dollar sometimes as much as 5 per cent of their borrowing, and in addition to that they were facing on the day of maturity the prospect that the exchange rate might have changed and that they might be confronted with a further loss if the Canadian dollar at that time should be not at a premium but at a discount.
The Canadian market has shown since the budget that it is quite capable of absorbing the issues which have been offered to it. I mentioned recently that in the first six weeks of this new calendar year provincial and municipal bond issues to the amount of $200 million and a federal issue in February of $150 million had been fully absorbed in Canada without the slightest disturbance of interest rates. In this period the market tended to strengthen and there was a slight reduction in the prevailing interest rates, subject, of course, to the usual fluctuations.
So I think the answer which might be given to the questions and observations of the hon. member is, in all the circumstances, a reassuring one.


Paul Theodore Hellyer: I share the minister's concern about Canadian borrowing in New York. 1 am sure he appreciates the reason why so many municipalities have had to go to New York in the last few years is the chaotic conditions in the Canadian money market which he and his colleagues have created. This has been a source of concern to us all.
I think the minister will also agree on reflection that if these changes which he is now proposing do increase the prices at which municipalities and provinces can borrow money, it is in fact an extra tax or an additional burden which he is placing on the already over-burdened municipalities.

Income Tax Act


Donald Methuen Fleming: Far from agreeing I must disagree with practically everything the hon. member has said. I think he will know why without my having to repeat what I have said on other occasions.
Paragraph as amended agreed to.
Paragraphs 8 and 9 agreed to.
On paragraph 10.


Donald Methuen Fleming: Mr. Chairman, on paragraph 10 there is an amendment of which notice was given on February 2 and there is an additional amendment as well. This is the only paragraph to which there is an additional amendment, and I shall ask my colleague the Minister of Mines and Technical Surveys to move this new amendment instead of the shorter one of which notice was given on February 2.
Perhaps I might point out that the new amendment embraces the one of which notice was given on February 2, providing for the inclusion of all insurance companies and not simply life insurance companies in the exemption provided. The new amendment contemplates as well extending the exemption to include any corporation which was incorporated before July 1, 1867 for the purpose of carrying on trade in any province or territory now comprised in Canada and which has been carrying on trade in Canada without interruption since that date.


Paul Comtois: That the Income Tax Act resolution be amended by striking out all that part of paragraph 10 thereof preceding subparagraph (a) and substituting therefor the following:
"That with respect to income earned on and after January 1, 1961 a special 15 per cent tax be imposed on a non-resident corporation carrying on business in Canada, other than a bank, insurance company, transportation company, communications company or a corporation that was incorporated before July 1, 1867 for the purpose of carrying on trade in any province or territory now comprised in Canada and that has been carrying on trade in Canada without interruption since that day, and that the tax be computed by reference to the amount remaining after deducting from its taxable income earned in Canada the aggregate of".


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
On paragraph 11.
William Hector McMillan: I referred to this as a so-called gimmick by which the minister was able to issue bonds at a discount and give wealthy people in the past a very high rate of interest indeed.
This year in his baby budget the minister said he found the provinces were doing the same thing as he was doing and he proposed to stop it. I think this has been a very bad practice on the part of the Minister of Finance

in the past and I should like to ask him if this will apply to federal bonds in future as well as to provincial issues. In the past I have called the attention of the minister to the fact that a bond sold at a discount for just one year would return a high interest rate, but he would go back and give us examples of bonds sold, say, at 97 over ten years so that the appreciation of that bond would only be $3 a year whereas the appreciation in a bond sold at 97 to mature in one year would be $30 on a thousand dollar bond. I think the minister, unwittingly or not, has misled the committee. It is one thing to talk about a bond appreciating up to its face value in one year and it is quite another thing to compare it with one that has appreciated in ten years. That is what the minister has done. That is the way the hon. gentleman has answered me in the past and I think he has been wrong.


Donald Methuen Fleming: Mr. Chairman, the answer is that this requirement will apply to all bonds whether issued by the federal government or by any other level of government.
I think I must correct the impression left by the words of the hon. member and tell him that out of all the federal bond issues in the last three years and eight months there is only one to which this resolution would have applied. There have been some extreme cases with respect to provincial and municipal bond issues that have led to the introduction of this proposal.


[Stage Direction]
Paragraph agreed to.
On paragraph 12.
Donald Methuen Fleming: Mr. Chairman, on paragraph 12 there is an amendment of which notice was given on February 2. Again I would ask my colleague the Minister of Mines and Technical Surveys if he would move the amendment.


Paul Comtois: Mr. Chairman, I move that the Income Tax Act resolution be amended by striking out paragraph 12 thereof and substituting therefor for the following:
"12. That lor the 1961 and subsequent taxation years a student in lull-time attendance at a university in a course leading to a degree, or in lull-time attendance at a college or other educational institution in Canada in a course at a postsecondary school level, be permitted to deduct in computing his income for the year, fees for his tuition paid to the university, college or other educational institution in respect ol a period not exceeding 12 months commencing in the year and not included in the calculation ol a deduction for such fees for a previous year (except any such fees paid in respect of a course that did not require his full-time attendance for a period of at least three consecutive months), and that the said tuition fees also be deducted in computing the income of the student for purposes of determining whether the student is a dependent."


Charles Edward Rea: Hon. members
have had notice of the amendment. Shall the amendment carry?


John Whitney Pickersgill: Before it carries, Mr. Chairman, I wish the minister would explain precisely how this clause as amended will work.


Donald Methuen Fleming: Mr. Chairman, it will be remembered that the proposal in its original form dealt with the case of the student in full-time attendance at a university in a course leading to a degree and in that case the amendment proposed would have permitted him in computing his income to deduct the tuition fees paid by him in the year to the university and also that the tuition fees should be deducted in computing the income of a student for the purpose of determining whether or not he was a dependent. That matter, of course, affected the question whether his parents are entitled to the $500 deduction in the case of dependents 16 years of age or over.


Paul Joseph James Martin: The year does not run from September, does it?


Donald Methuen Fleming: The year in question in the original resolution applied to the year 1961. The purpose of the amendment has been to widen very considerably the scope of the original proposal.
In the first place, as to the number of students who will qualify within the scope of the amendment, this definition is now broadened to include students whether in a university in a course leading to a degree or students in full-time attendance at a college or other educational institution in Canada in a course at a post-secondary school level. That is the enlargement of the class which will be benefited by the resolution.
The resolution is also broadened with respect to the application of the principle. Where in the original resolution the effect dated from January 1, 1961 and applied only to tuition fees paid on or after that date, the amendment now contemplates the inclusion in the scope of the amendment of tuition fees paid for a period not exceeding 12 months commencing in the year and not included in the calculation of a deduction for such fees for a previous year, except any such fees paid in respect of a course that did not require full-time attendance for a period of at least three consecutive months. I believe those are the leading elements in the broadening of the benefits of this proposed amendment.


John Whitney Pickersgill: Mr. Chairman, I wish to make one brief observation. I approve of this proposal in its amended form as I approved of it in its original form but I would
Income Tax Act
point out, just the same, that it does underline the fact that those students who need help most get none at all and that if the student earns a considerable sum he gets a certain amount of additional help from the government, but if he does not earn that much he does not qualify for assistance and-


Donald Methuen Fleming: I think the hon. member will agree that that other class would not be a matter to be dealt with under the Income Tax Act.


John Whitney Pickersgill: If the minister would allow me to finish my own sentence, I was going to say that in addition to providing help for those students who were fortunate enough to earn a relatively larger amount it underlines the need of a proper program of scholarships and bursaries on a national basis for those who were not fortunate enough to come up to a sufficiently high level of income to enable them to qualify under this clause.


Herbert Wilfred Herridge: Mr. Chairman, the amendment certainly improves the application and intention of the resolution. Would the minister inform the committee from what sources he received representations with respect to this amendment and state whether he has received any from organizations or institutions suggesting a further widening of the deductions permitted under this clause of the resolution?


Donald Methuen Fleming: Mr. Chairman, there have been resolutions received from time to time broadly relating to this subject. Sometimes they have come from student organizations. Since the introduction of the supplementary budget on December 20, I have received a number of communications from student organizations and educational bodies expressing most cordial approval of the recommendations. Some of them proposed extensions such as those that are now put forward in the amendment.
There are some colleges that are not affiliated with any university but which are well-recognized educational institutions at post-secondary level. Their case was very carefully considered and it seemed to my colleagues and myself that it was a fair case they had put forward. Representations of that kind led to the broadening of the resolution.
There were some representations received from individual students. In every case these have been carefully studied and I think that the resolution in its amended and broadened form will cover and accede to practically all the representations in this field that we have received.


[Stage Direction]
Amendment agreed to.
Paragragh as amended agreed to.
Resolution as amended agreed to.
Resolutions reported.
[Stage Direction]
Business of the House
Mr. Speaker:: Mr. Fleming (Eglinton) seconded by Mr. Churchill, moves that the said resolution be now concurred in. Is it the pleasure of the house to adopt the motion?


John Whitney Pickersgill: On division.
Motion agreed to on division and resolution concurred in.


CUSTOMS TARIFF
Donald Methuen Fleming: for leave to introduce Bill No. C-72, to amend the Customs Tariff.


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


John Whitney Pickersgill: On division.
Motion agreed to on division and bill read the first time.


Mr. Speaker:: When shall the said bill be read a second time?


John Whitney Pickersgill: Never.


Mr. Speaker:: Next sitting of the house?


Some hon. Members:: Agreed.


INCOME TAX ACT
Donald Methuen Fleming: for leave to introduce Bill No. C-73, to amend the Income Tax Act.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Mr. Speaker, in view of the ruling of the Chair in committee that the announcement made by the Minister of Labour today could not be discussed on the
income tax resolution, I should like to suggest to the leader of the house that he call the estimates of the Department of Labour tomorrow so that this matter can be discussed in view of the great public interest in it and its urgency.


Mr. Churchill:: Mr. Speaker, we always give careful consideration to suggestions from the other side but so many people are waiting to discuss another matter of great public interest, namely, agriculture, that I think perhaps we should go on with the estimates of the Department of Agriculture tomorrow as announced earlier this week.


John Whitney Pickersgill: In that case would the leader of the house allow me to make an alternative suggestion, that the government move on Monday to go into committee of supply in order to give the opposition an opportunity-


Jay Waldo Monteith: You had it last week.


John Whitney Pickersgill: If the minister would not interrupt, it would be appreciated. May I suggest that the government on Monday move to go into committee of supply in order to give the opposition an opportunity to discuss the announcement made today which there was certainly no opportunity to debate before today.


Gordon Minto Churchill: In view of these suggestions which will be given careful consideration, I will not announce any business other than that for tomorrow.


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

[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. Tucker: What Is the result of the investigation referred to by the Minister of Transport in his answer to the question regarding lake Williams, Nova Scotia, as reported in Hansard for Friday, August 5, 1960, at page 7598?
Answer by: Hon. Leon Balcer (Minister of Transport):
Question
A Department of Transport report of the inquiry into the accident to Piper J-3CG5 aircraft, CF-DGT, at lake Williams, Nova Scotia, on May 22, 1960, revealed that the accident occurred because the pilot in command failed to see the sailboat until too late to avoid a collision while he was taxiing his aircraft at high speed into the sun.
Seaplane operations at lake Williams, Nova Scotia, have been thoroughly investigated by officers of the Department of Transport and those operations are, and will be, kept under strict supervision in order to make certain that the air regulations are being observed and that such operations are being conducted in a safe and orderly manner.



Friday, March 3, 1961



COMMITTEES OF THE HOUSE


[Stage Direction]
Mr. Lucien Grenier (Bonaventure) presented the first report of the joint committee on Indian affairs and moved that the report he concurred in.
Motion agreed to.
Fifth report of standing committee on standing orders-Miss Aitken.