1961-09-26

COMMITTEES OF THE HOUSE


[Stage Direction]
Mr. Nicholas Mandziuk (Marquette) presented the sixth and seventh reports of the standing committee on miscellaneous private bills, and moved that the seventh report be concurred in.
Mr. Speaker:: By reason of the special orders that were made yesterday perhaps I should inquire whether it is the wish of the house that this sixth report, which appears to refer to a great many divorce bills, should be available for consideration today, in which case suspension of the ordinary practice of having it listed on the order paper will be required. Otherwise it could not be considered until tomorrow.


Hon. Gordon Churchill (Minister of Veterans Affairs):: Mr. Speaker, it would be helpful if the report were available today.


Mr. Frank Howard (Skeena):: I think that would be the proper thing to do.


Hon. J. W. Pickersgill (Bonavisla-Twillin-gale):: I do not think there would be any objection to that, Mr. Speaker.


Mr. Speaker:: Then by unanimous consent the report which is now tabled will be available today at the hour for private bills, notwithstanding the fact that it has not been listed on the order paper. Is that agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Third report of standing committee on agriculture and colonization-Mr. McBain.


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker-


Mr. Chevrier:: Is the minister going to make a statement?


George Harris Hees: Yes; I missed motions.


Lionel Chevrier: Mr. Speaker, if the minister wishes to revert to motions I have no objection.


George Harris Hees: Could we revert to motions, Mr. Speaker?


Mr. Speaker:: Is it agreed that the minister has leave to revert to motions?


Some hon. Members:: Agreed.


George Harris Hees: Mr. Speaker, I should like to make a brief report about a trip which has necessitated my absence during the past two weeks. During these two weeks I have, as the house already knows, attended the commonwealth economic conference at Accra with my colleague the Minister of Finance, and later visited our trade commissioners in five of the important markets of Europe.
At the Accra conference I outlined the importance to Canada of maintaining the commonwealth trading arrangements which have been so beneficial to our farmers, fishermen, lumbermen, miners, other primary producers and manufacturers in the United Kingdom market, and also to United Kingdom producers selling in the Canadian market. I pointed out that acceptance of the common market tariff by the United Kingdom would mean for us the loss of free entry for a number of important industrial raw materials, the whole range of semi-processed and manufactured goods, and most of our agricultural exports.
I told the meeting that out of total sales to the United Kingdom last year amounting to $915 million some $691 million, or 76 per cent, would be affected by United Kingdom acceptance of the common market tariff; $631 million would in our view be seriously affected; $584 million of this trade would be faced with higher tariffs, and $553 million would be faced with not only a loss of preference but, in most cases, a preference against Canadians and in favour of Europeans. I said this would be an entirely new and disturbing situation for us. I pointed out that such figures are by no means a full measure of the potential damage of such a move for Canada. In some cases the loss of preference, let alone reverse preference, could eliminate Canadians from the United Kingdom market.
The other commonwealth delegations attending the conference expressed similar concern over the effect which the loss of present trading arrangements in the United Kingdom
8900	HOUSE OF
Commonwealth Economic Conference market would have on their economies, and the communique, which was adopted unanimously, expresses accurately the grave concern felt by members of the commonwealth about this matter.
At no time did I say anything which could be construed as an ultimatum to the United Kingdom government that she must choose between the European common market and the commonwealth. I endeavoured to point out to the United Kingdom government the importance to Canadian producers of maintaining our present trading arrangements in the United Kingdom market, and the damage that will result if these trading arrangements are not maintained. I pointed out that our economy would be harmed to the degree that the United Kingdom government is unable to maintain these trading arrangements.
I think the house might be interested to learn of the increase in exports between this country and the United Kingdom which has developed since this government took office. In 1956 Canadian exports to the United Kingdom market amounted to $812,668,049. Last year exports to the United Kingdom market from Canada amounted to $915,289,654. Our exports to all commonwealth countries, including the United Kingdom, in 1956 amounted to $1,055,833,671. Last year they amounted to $1,244,519,631.1 cite these figures simply to show how trade with the United Kingdom and the commonwealth as a whole has been increasing during the time we have been in office, and the importance of this trade to Canada.
After leaving Ghana I visited our trade commissioners in Italy, West Germany, France, Belgium and the United Kingdom. My purpose in doing so was threefold. First of all I wanted to examine the opportunities which exist for expanding trade in those countries. Having discussed this matter with our trade commissioners and with businessmen, I am convinced that we can substantially expand our trade in those markets if our businessmen will visit the markets and show prospective customers good samples at competitive prices. Canadians have a lot of goodwill in Europe and people there are anxious to do business with us, but they want to meet our salesmen face to face and discuss prospective sales with them.
My second purpose was to find out at first hand if our posts abroad are carrying out efficiently the task I have given them of making it as easy for a Canadian businessman to sell his products in the country in which they are serving as it is for him to do business in Canada. I find that this is being done very effectively in the five countries which I visited.


My third purpose was to find out if the department in Ottawa can do a better job of backing up our trade commissioners in the important tasks they have been given to do. A number of good suggestions were made to me and these will be put into effect in the near future.
In conclusion, Mr. Speaker, I felt that the visits I made to posts abroad were very useful indeed, and I intend to make similar visits to other posts abroad just as soon as sufficient time is available.


Lionel Chevrier: Mr. Speaker, I was wondering whether the Minister of Finance had a statement to make. If he has, I would rather reserve my comments until after he has completed his statement.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I arrived in Ottawa at a very late hour last night and I have no prepared statement. If it is the wish of the house, however, I shall be pleased to review this and other matters on which I had the privilege of representing Canada abroad during these past two and a half weeks. I understand that my estimates will perhaps be before the house today and I shall be glad indeed to deal more fully with any of these subjects at that time. However, if it is the wish of the house I shall be glad to make a statement now, Mr. Speaker.


Mr. Speaker:: Before the minister proceeds may I say I would think if there is to be discussion to any extent of the matters on which statements have been made, it would be more appropriate to deal with them on the estimates, where debate is permissible. At this time of day it is not customary to get into debate. I would think if that course commends itself to both sides it would be preferable, unless the statement is a purely factual statement which requires to be made at this time, which I take it that it is likely not to be.


Lionel Chevrier: Mr. Speaker, I doubt that the statement is a purely factual one. In any event we on this side of the house are willing to abide by your suggestion.
First of all I wish to follow the course followed yesterday with respect to the Minister of Trade and Commerce, and welcome back to the house the Minister of Finance. I should like to congratulate him at once for his decision to visit the Vatican. I think that was a commendable decision, and I should like to see others of the minister's colleagues emulate his decision. There is precedent in that the royal family have been visitors at the Holy See from time to time.
The Minister of Trade and Commerce has made a statement which I shall not say was

comprehensive, but which dealt with his activities at the economic commonwealth conference at Accra. We were concerned, and everyone in Canada who expressed an opinion was similarly concerned, as a result of the reports that came from Accra to the effect that not only the Minister of Finance but more particularly the Minister of Trade and Commerce were lecturing the British about their own political problems. When we saw the text of the speech which the Minister of Trade and Commerce admitted yesterday was his text, a copy of which I hold in my hand, we were even more shocked to find that a Canadian minister was telling the British, in effect, that they could not stay in the commonwealth unless they did what the Canadian government told them to do.
Although the minister attempted this morning to water down what was said it is clear from this press report, prepared by Norman M. MacLeod of United Press International that Canada took the lead in ganging up in a negative and obstructive fashion against Britain.


Mr. Diefenbaker:: Nonsense.


Lionel Chevrier: We think this was the wrong approach.


Mr. Speaker:: The course of the proceedings puts the Chair in some difficulty, because it is apparent that this is a debate. I suggest to the house that the debate be adjourned to the estimates of the Minister of Finance and be carried on there; otherwise I shall have to exercise my discretion and prescribe some limits to what is taking place.


Lionel Chevrier: Mr. Speaker, there are a number of statements-


Donald Methuen Fleming: May I speak on the point of order?


Mr. Speaker:: Yes.


Donald Methuen Fleming: If the hon. member were to be permitted to proceed in this fashion I would have to ask you to permit me to rise and contradict these misstatements categorically, Mr. Speaker, because they just do not accord with the facts of the case at Accra. There was no ganging up on the United Kingdom. That is a complete distortion of what happened at Accra.


Mr. Speaker:: I appreciate the fact that that is the situation. If the hon. member for Laurier is permitted to continue in the way in which he is now going there will be necessity to give an opportunity to hon. members to comment on his statement, and then there would be no limit to the extent of the discussion.
Commonwealth Economic Conference
This is not the period for debate. The Minister of Trade and Commerce expressed opinions and certainly they should be commented on, but I would expect that it might be more appropriately done, if the house would agree, when the house takes up the estimates of the Department of Finance.


Lionel Chevrier: Mr. Speaker, some comments were made by the Minister of Finance that I should like to deal with, and I think I can deal with them with the velvet glove instead of the iron fist that I am being accused of using.
If I am allowed to do so I should like to suggest to the minister that we on this side of the house think the statement he made this morning as well as the report of his speech which we have in our hands was the wrong approach. We think the approach which was adopted by the government at Accra was the wrong one. We think that rather than have proceeded in the way in which the government did there should have been a positive approach. We feel-


Mr. Speaker:: I think the hon. member has made the position of his party clear, which is all that is normally permitted in the preliminary remarks, reserving the right to comment and debate further on. If the hon. member for Laurier proceeds it will not be possible to restrict the discussion. Therefore I would ask him whether he would leave it at this point.


Lionel Chevrier: I shall conclude what I have to say on the estimates of the Department of Finance.


Mr. Hazen Argue (Assiniboia):: May I make a very short statement. I appreciate the opportunity to do so. I listened very carefully to the remarks of the Minister of Trade and Commerce. It is accepted in this house that when a member makes a denial of statements that have been credited to him the house accepts that denial, and this I am sure we all do. I think it is the general feeling of hon. members that the statement attributed to the minister would not have been a wise one to make, to say the least. However, Mr. Speaker, I think we can also go overboard in criticizing the minister for having pointed out in a very strong way the serious implications that can flow to Canada from Britain joining the common market.
I wish to say that I believe the minister was carrying out the responsible duty of a minister of the crown in pointing out in a very strong way the very serious consequences that will flow to Canada should Britain join the common market. The result could be a disastrous increase in tariffs applied affecting Canadian exports.

Canadian Disarmament Position
However, after having said that, I think it is also right to say that Canada must not be satisfied with a negative approach. We must have a positive approach toward increasing trade, toward extending the area where barriers to trade can be reduced, and we shall await with interest the minister's enunciation of these more positive proposals. We feel that Canada's role in the future must be one of association with members now in the European common market as well as with other nations in widening the areas in which trade barriers are reduced and will eventually be removed.



UNITED NATIONS


John George Diefenbaker: Yesterday President Kennedy, in his speech to the United Nations general assembly, revealed new disarmament proposals. The new plan has been submitted to the United Nations in a United States document. I want to make clear at once that it has full Canadian support, and that Canada took an active part in the preparation of these proposals. I think the house might be interested in a statement on their main features.
Throughout the summer we have been working closely with representatives of the other members of the ten nation disarmament committee to get these new proposals ready. There has been very full consultation with other members of the western alliance. The Canadian point of view was presented, and vigorously presented, in the course of those meetings, and the majority of the suggestions made by Canada are embodied in the new plan as enunciated.
These proposals meet the wishes of the average person throughout the world for a really significant measure of disarmament to be attained at the earliest possible date. As well, they underline the necessity of viewing disarmament as an uninterrupted process directed toward a definite goal.
These are factors to which great importance was attached by the commonwealth prime ministers at the meeting earlier this year. It is significant that they now find a place in the new disarmament proposals. In point of fact, the communique issued by the prime ministers' conference represented, I think, the first occasion on which all of the nations of the commonwealth joined together in one proposal and in one compendium of suggestions on this or any other matter.
The new plan, as enunciated, does not stop at pious deference to the ultimate goal of general disarmament. It provides an opportunity for undertaking immediate measures

to put a stop to the arms race, to reduce the dangers of surprise attack and reverse the frightening spiral of threats to peace which now confronts the world. It is clear proof of the fact that the western nations are not out to promote empty slogans but are sincerely desirous of seeking active, concrete disarmament as soon as possible.
The most striking point of the new plan is that it provides for a large measure of disarmament at the very first stage. It would get disarmament started right away in all important areas. In that regard, I should point out that there are substantial proposals to deal with the most dangerous of modern armaments, nuclear weapons, and the means for their delivery. The production of nuclear weapons material is to be stopped at the very outset. Quantities of fissionable material from past production for military purposes are to be transferred to peaceful uses. In that connection I might point out that when I spoke at the United Nations assembly in September, 1960, that was one of the matters advanced.
In conjunction with these measures, provision is also made to stop the further spread of nuclear weapons by prohibiting any country which possesses them from relinquishing their control to countries which do not. The section in question, to which I might refer, reads as follows:
States owning nuclear weapons shall not relinquish control of such weapons to any nation not owning them and shall not transmit to any such nation the information or material necessary for their manufacture. States not owning nuclear weapons shall not manufacture such weapons, attempt to obtain control of such weapons belonging to other states, or seek to receive information or material necessary to their manufacture.
There is also provision at the beginning of the program for the reduction of existing stocks of the major means of directing nuclear weapons to their targets, "strategic delivery vehicles" as they are called in the plan. The production and testing of specified types of these weapons are also to be limited or discontinued altogether. This provision, too, was one of those I placed before the assembly in September, 1960, when I pointed out the need of a law for outer space before the dangerous potentialities of the future would permit of the launching of war as against all mankind from outer space; and that outer space should be available to all nations, great or small, in an equal manner and should be used for peaceful purposes.
These measures suggested by the President go a long way toward removing the widespread fear that the nuclear powers are embarked on a contest which they cannot stop and which no one can win. Their importance cannot be exaggerated.

I think it is apparent that while nuclear weapons present the most frightening threat of modern times, the so-called conventional means of warfare can also cause-and have done so on more than one occasion in our lifetime-extraordinary devastation and misery.
There are provisions for significant manpower reductions, to 2.1 million men in the case of the United States and the Soviet union in the first stage. It is also provided that conventional armaments will be reduced. Further, the plan calls for limitations on the production of certain categories of conventional weapons.
There are measures designed to reduce the dangers of surprise attack or accidental war through advance notification of military manoeuvres and ground observation posts. An international commission is to be established to study further measures of this kind. The importance of these provisions is apparent in a world where a miscalculation could result in all-out war before either side has had time for second thought, sober second thought, on the subject.
A further section of the plan deals with the peaceful usage of outer space. I have already made reference to that. The plan would prohibit the stationing in outer space of weapons of mass destruction, and calls for a system of advance notification of satellite launchings so that all states will be reassured that these launchings are peaceful in intent. The Secretary of State for External Affairs on more than one occasion has advanced this and other suggestions that now find their way into the presentation of this plan.
The entire plan is to be implemented under the strictest international verification. The provisions for effective control are among the most important, because they give the assurance that is sought by all that the measures undertaken will in fact be carried out, and that all states will fully respect their obligations.
Finally, there are significant new provisions for increasing the strength and effectiveness of international machinery to keep the peace. These proposals are given prominence because it is clear that no states will be prepared to sacrifice the means by which they now provide self defence, unless there is sufficient guarantee that there will be effective arrangements by which the security of all states can be protected internationally. The new proposals look to the development of existing United Nations arrangements for keeping the peace, and call for the creation of a United Nations peace observation group which could investigate any incident anywhere in the world which would be likely to constitute a threat to the peace. In addition
Canadian Disarmament Position -and this has been the hope for 1,000 years -the creation of a genuine international force, to take place in the second stage of disarmament.
All these things constitute a broad program the goal of which is to remove all threat of war and to ensure that disputes between nations will be settled by peaceful means. After further development in stages two and three, if the plan is accepted, the only armaments and armed forces which would be retained would be those required to protect the security of individual citizens and for contributions as well to an international peace force.
I think the proposals are impressive and that, if they were accepted, they would bring about a major achievement in the field of disarmament effectively and quickly. To what extent they will prove acceptable to the Soviet union will be seen only in detailed negotiations. I think the proposals are realistic. While all of us feel a sense of encouragement with every indication of even the slightest change, I think the acceptance by the United States and the U.S.S.R. of the basic principles which underlie and guide these negotiations will be a step forward.
There are other problems which remain to be resolved. An element of co-operation on both sides can still contribute to their solution at an early date. It is an overriding obligation for everyone in our country as well as throughout the nations of the world to ensure that this challenge shall be met without further delay.
In the midst of the difficulties of the present, the fears that overhang all mankind, the proposals constitute great hope if accepted; for if the expenditures now being made in the field of armament could be applied to those talks that raise the living standards of men, we would be entering a new era in which the past would be far exceeded by the potentialities which technology permits and allows in the present.


Lionel Chevrier: I wonder whether the Prime Minister would permit a question at this stage. It is this. Can the Prime Minister say whether the government was consulted about the third principle for disarmament put forward by the president and which reads as follows:
Prohibiting the transfer of control over nuclear weapons to states that do not now own them.
If so, how can this be reconciled with joint control?


John George Diefenbaker: Mr. Speaker, the Canadian government has continued to be in favour of a comprehensive system of disarmament which will include measures for

Canadian Disarmament Position stopping the further spread of nuclear weapons. Last year at the general assembly the Canadian representative said this:
... we believe that the spread of nuclear weapons to an ever increasing number of countries would pose a threat to mankind. We consider that the only satisfactory way to dispel the dangers inherent in this possibility is through international agreement on a comprehensive and carefully verified system of disarmament.
Consistent with this policy the Secretary of State for External Affairs and all Canadian representatives have worked for the recognition of the importance of including measures to prohibit the spread of these weapons as part of a disarmament program. I am glad that they form part of these new proposals.


Hazen Robert Argue: Mr. Speaker, the statement of the Prime Minister was something of a general summary of the speech of the President of the United States at the United Nations. I think peace loving people throughout the world will in general welcome the tone as well as most of the content of the speech delivered by President Kennedy. In the last few weeks, without wise counsel from important leaders of the world, the world was hell bent toward nuclear war. I think the statement of President Kennedy may bring to the councils of the world a measure of sense.
The resumption by the U.S.S.R. of nuclear tests was perhaps the greatest single blow in recent weeks to the hopes of mankind for an enduring peace. We have criticized the United States for resuming nuclear tests, but we welcome the statement of President Kennedy that cessation of nuclear tests by all nations should be agreed upon forthwith.
We welcome the statement by the Prime Minister that Canada had been consulted before these proposals were put forward by President Kennedy. It seems to me that President Kennedy, in stating that there should be no further extension of control of nuclear weapons, strengthens the opinion of those Canadians who believe that Canada should not accept nuclear weapons. We do not feel that nuclear weapons should be on Canadian soil, whether or not those weapons are under the control of Canada itself.
In recent weeks so much of the talk has been about preparation for eventual war that it seems a very satisfactory thing to hear the leader of the United States talk about peace and the terrible results of an atomic war. The world is looking to the United Nations now for leadership in the field of peace. We hope that the United Nations, as requested by President Kennedy, Canada and other nations, will appoint a secretary general who can continue the good work of the late Dag Hammarskj old.


John George Diefenbaker: With the leave of the house, Mr. Speaker, may I say that I think it might be well to have printed as an appendix to Hansard the United States declaration and program on disarmament which, as I said a moment ago, reflects the Canadian view and to which Canada made ample recommendations, many of which were accepted.


Mr. Speaker:: Is it agreed that the declaration submitted by the Prime Minister be printed as an appendix to Hansard.


Some hon. Members:: Agreed.
{Editor's note: For document referred to above see appendix "A".]



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I should like to address a question to the Prime Minister. Has he any comment to make on the story appearing in this morning's Gazette that Donald Gordon would be reappointed as head of the Canadian National Railways, and that his appointment would be announced by the Minister of Transport within the next 48 hours?


John George Diefenbaker: Mr. Speaker, that is the old, old question the hon. gentleman has asked now in a different form. The answer remains the same as already given.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to address a question to the Minister of Agriculture. In view of the general disappointment on the prairies arising out of the fact that the government has not announced a policy on acreage payments either in lieu of deficiency payments or as additional payments-


Some hon. Members:: Question.


Hazen Robert Argue: -in order to compensate for widespread drought, can the minister say when the government will make an announcement of policy, and whether the house will be asked to pass estimates at this time for such purposes.


Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, this is the first opportunity I have had since the events of the past summer to extend my congratulations to the hon.

member for Assiniboia for the high office and the high responsibilities he has been given in the new party. I wish him well in those responsibilities.
In so far as the question is concerned, I think it is very apparent that the efforts of the government to meet the drought situation in its first stages, and second to deal with the water problems that now exist, are the main factors facing western farmers. Needless to say the question of income, in which we set an example in 1958 and 1960 and took some responsibility, is still under consideration. I think the farmers know where their friends are.


Hazen Robert Argue: Mr. Speaker, I wonder whether I can ask the minister to clarify his answer by asking him whether this means no to western agriculture during this session. In the light of the minister's generous use of words we are entitled to an answer.


Mr. Speaker:: Order.



CIVIL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. R. Garland (Nipissing):: Mr. Speaker, may I ask the Minister of Public Works whether it is a fact that the shelter against radioactive elements which has been recommended for construction by the government is contrary to the national building code.


Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, I shall be glad to accept that question as notice.



TELEVISION


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, may I ask the Minister of National Revenue whether he has any information from the board of broadcast governors as to the matter of the transfer of stock in the television station in Toronto to a United States company. If so, would he inform the house?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, the answer is no. It has been the custom of the board to issue statements at the conclusion of hearings. I presume this will be done when they finalize the matter.
Inquiries of the Ministry DRUGS



REPORTED INCREASE IN NUMBER OF FORGED PRESCRIPTIONS

[Stage Direction]
On the orders of the day:
Hon. J. W. Monieiih (Minister of National Health and Welfare):: Mr. Speaker, on Friday the hon. member for Sudbury asked me if I had any comments in connection with a story in the Toronto Globe and Mail of that day which quoted reports that forged prescriptions for barbiturates had greatly increased over the past few months.
My department has been aware of irregularities in this field, and I can assure the hon. member the matter is under active investigation by police authorities. The general situation, as far as trafficking is concerned, led to the legislative action recently approved by parliament. These steps were effective as of September 15, and I have no doubt that many of the reported activities will be eliminated now that the legislation is operative.



UNEMPLOYMENT ASSISTANCE


[Stage Direction]
On the orders of the day:
Jay Waldo Monteith: Mr. Speaker, during my estimates on Saturday last I promised the hon. member for St. Denis that I would table some figures. At that time I said I had no objection to these figures being printed in Hansard. These are payments by the government for unemployment assistance over the past few years.


Mr. Speaker:: Has the minister leave to table the document?


John Whitney Pickersgill: And have it printed in Hansard.


Jay Waldo Monteith: At that time I said I would agree to the figures being printed in Hansard.


Mr. Speaker:: Is it agreed that the document be printed as an appendix to Hansard today?


Some hon. Members:: Agreed.
[Editor's note: For figures referred to above, see appendix "B".]



HOUSING


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I wonder whether I may put a question to the Minister of Public

Inquiries of the Ministry Works. During the course of the debate on the amendments to the housing act the minister was good enough to say that at a later date he would make available for inclusion in Hansard a list of the universities to which assistance had been given under that act, and a list of the institutions which were eligible for such assistance. I wonder if the minister would endeavour to expedite the production of that document for its inclusion in Hansard this session.


David James Walker: Mr. Speaker, on the understanding that the hon. member for Bonavista-Twil-lingate is trying to expedite the prorogation of this house, I would be very happy to do that if he can give me an idea when that date will be.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. C. R. Granger (Grand Falls-White Bay-Labrador):: Mr. Speaker, I wish to direct a question to the Minister of Northern Affairs and National Resources. Can the minister say what consideration is being given to providing funds to assist the Eskimos in Labrador?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, as the hon. member knows, under the terms of union responsibility for the Eskimo population of Labrador fell to the province of Newfoundland. From time to time there have been suggestions whereby assistance might be rendered by the federal government. Incidentally, this also involves the Indian population of Newfoundland. I can assure the hon. member that we are giving consideration to these suggestions.


Charles Ronald McKay Granger: Mr. Speaker, I should like to ask a question of the Minister of Citizenship and Immigration similar to the one I asked the Minister of Northern Affairs and National Resources. Can the minister say what consideration is being given to providing funds to assist Indians in Labrador?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Mr. Speaker,
as my colleague has just said, the responsibility for the Indians of Labrador, like the Eskimos, under the terms of union was placed on the provincial government. Consequently theirs is the responsibility for providing services, housing, etc., for the Indian population.
However, we have received several suggestions from the provincial government of Newfoundland asking for assistance in the provision of housing accommodation for the

Indians of Labrador. This matter is under consideration by the government at the present time and as soon as a decision has been reached an announcement will be made.



TRANSPORT


[Stage Direction]
On the orders of the day:
Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, on Friday last the hon. member for Trinity-Conception asked if I was in a position to say whether a decision had been reached to build a new ferry to operate from some port on Newfoundland's east coast and, if so, when construction would begin. No final decision has yet been arrived at.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
The house resumed, from Monday, September 25, consideration in committee of Bill No. C-126 respecting the construction of a line of railway in the province of Alberta and in the Northwest Territories by Canadian National Railway Company from a point at or near Grimshaw, in the province of Alberta, in a northerly direction to Great Slave lake, in the Northwest Territories-Mr. Balcer- Mr. Chown in the chair.
On clause 6-Agreement required.
John Whitney Pickersgill: When we adjourned last evening I had just asked the minister for certain information and he had undertaken to provide that information if possible. I am glad the Minister of Finance is here this morning, and perhaps I could have his attention; because if the Minister of Transport cannot provide this information I am perfectly sure the Minister of Finance can. Perhaps I should recall what it was I said:
I believe we ought to have an indication other than merely the minister's expression of confidence that traffic will be available in approximately that volume. I do not necessarily refer to traffic in concentrates, but to lumber and any other commodities that might be shipped. This railway will not carry passengers, nor will it carry much package freight in an area where there is already a highway, as anyone who has had much experience of highways and railways knows. It is likely that this railway will carry only bulk cargo of one kind or another. I believe we ought to have a much harder estimate. When we resume in committee tomorrow the minister should tell us what the estimate of the cost to the treasury is based upon, including the projected rate of interest they are working on.
By the cost to the treasury I do not mean the $86 million; I mean the cost of carrying

that $86 million over the period, since there is no provision in the agreement for any direct return on it.


Léon Balcer: As I explained yesterday, this money will be paid to the company out of the consolidated revenue fund from time to time under the direction of the governor in council and upon a report of the Minister of Transport concerning the mileage of railway line constructed or to be constructed, in such amounts and in such manners and subject to such conditions, if any, as the governor in council deems expedient. There will be the same conditions, the same charges, as those applied in respect of any other subsidies paid out of consolidated revenue for any special purpose.


John Whitney Pickersgill: I am sure the Minister of Finance would not have agreed to this agreement and to the introduction of this bill without having a projection over the period until 1966-during which the railway is not going to be operating, according to the prospects-[DOT] of what this is going to cost the treasury. I am not talking about the $86 million itself. I am talking about the carrying charges on that sum as the money is borrowed over that period. I think before we approve this bill we ought to know what the estimate is. I realize that the actual amount will depend on how quickly the railway is built. The slower it is built the more it is going to cost, because more money will have to be provided for a longer period. I think the Minister of Finance, as the custodian of the treasury, should tell us what estimate has been made of the carrying charges up to the time the railway begins to operate in 1966.


Léon Balcer: I think anybody will realize that if this money is to be borrowed we shall have to pay the interest in the bond market of Canada at that time. We do not know what this is going to be three years from now, for example, or at any given time. It will be whatever the market will require at that time.


Lionel Chevrier: May I ask the Minister of Finance what is the rate of interest which is being paid by the government now on short term borrowings?


Donald Methuen Fleming: It depends entirely on the maturity. The treasury bill rate has been remarkably low for some time now. Our own market borrowings have been in the short term field in keeping with the policy which I announced in the budget. We have not been borrowing in the long end of the market for some time. I shall be pleased, when we come
Canadian National Railways to the discussion of my estimates, to deal with the question of interest rates if the hon. member wishes.


Lionel Chevrier: Can the minister not give some indication of what rate the government would have to pay if, say, $100 million were required?


Donald Methuen Fleming: That would depend on the time of the borrowing; it would depend on conditions at the time. It would depend on the maturity date, and on many other factors.


Lionel Chevrier: I asked the minister to tell us as of now.


Donald Methuen Fleming: I said that we have not been borrowing on the long end of the market for some time for the reasons I indicated in the budget speech. We have been leaving that end of the market open to the provinces and the municipalities. The maturity would be a matter for decision when the time came. I think the hon. member will not overlook the fact that this money is not all required at one particular time; it would be a matter of taking care of this additional requirement along with all the other cash requirements of the government.


Lionel Chevrier: I realize that, and if the minister had been here last night-he was not here, through no fault of his own-he would be aware that the discussion had to do with regular amounts which would have to be provided year by year until the railway was built.
I come back to the question I asked the minister last night in connection with the amount of concentrates required by the Northern Alberta Railways to amortize the capital over a period of years. The minister said he would consult with his officers to ascertain whether there had been an amount of concentrates per year required by the N.A.R. in case they should decide to build this line with their own capital.


Léon Balcer: I understood from the discussion last night that this information was not required any longer. The hon. member for Laurier himself gave the figure; he had made the calculation. We had a rate for 215,000 tons of concentrates and he made the calculation himself based upon that figure and gave the results to the committee. I thought he was satisfied with that. If I understand him well, he wants to know what the Northern Alberta Railways figured would be the full requirement of concentrates which should be shipped on that line so as to completely amortize the total cost of the line. I am sorry, but I have not got that figure at the present time. My people can endeavour to get it, though I am not sure whether we

Canadian National Railways have in the department any figure prepared by the Northern Alberta Railway Company with regard to such a requirement.


Lionel Chevrier: I put the question to the minister, as reported at page 8896 of Hansard, as follows:
Would it not then require, to amortize everything, something in the neighbourhood of 800,000 or 900,000 tons of concentrates per year over a period of 25 years, not 10 years?
The minister replied:
Tha is quite possible. I know that the economists in my department have worked out all these figures, but I have not got them with me. I do not disagree with the hon. member, but what I wish to say is that this line is not being built exclusively for one mine.
Later on, as reported at page 8897, the hon. member for Bonavista-Twillingate said:
In a qualified way the minister assented to the proposition advanced by the hon. member for Laurier that it would be 800,000 or 900,000 tons instead of the 215,000, which is over four times what they are being asked for over a period of years.
I cannot readily locate it in Hansard, but I understood the minister to say that he would check with his officers to find out whether that was correct. The minister now says he could obtain those figures at a later date. I would appreciate it if he would secure them before the conclusion of this discussion.


Léon Balcer: I have just received information from my officials. If all the traffic from Pine Point were to consist of concentrates a volume of approximately 800,000 tons would be required to amortize the capital cost. What the hon. member for Laurier seems to forget is that there would be concentrates other than from Pine Point. This does not take into account the traffic moving into Pine Point mines including equipment, supplies and other things, nor does it take into account commercial fishing at Great Slave lake which will be transported on this line, together with other commodities such as lumber and agricultural produce.


Lionel Chevrier: Does the note which the minister received say anything about the length of time required? The minister will remember that the agreement extends for only ten years. My suggestion was that when worked out mathematically it would take between 800,000 and 900,000 tons over a period of 25 years. That is four times greater so far as the volume is concerned, and two and a half times greater so far as the time is concerned. Has the minister any information as to the length of the term of the agreement?


Léon Balcer: I agree with my hon. friend that approximately 800,000 or 900,000 tons

will be required over a period of 25 years if we ship on that line exclusively concentrates from Pine Point.


Lionel Chevrier: That is fine. I thank the minister. I did not hear him refer to the period of 25 years.
I wish now to follow up another point raised by my friend the hon. member for Bonavista-Twillingate in connection with the demand for concentrates over the period of time mentioned in the agreement. Mr. D. F. Purves who appeared as a witness before the standing committee on Thursday, September 21, 1961, as reported at page 258 of the minutes of proceedings and evidence, when referring to the assurance of a continuing market for concentrates, said:
We do not have any assurance in that regard, but we do have the other assurance with which we primarily are concerned. That is, the company will ship 215,000 tons per year or pay a penalty.
The question that arises is this. Did the government make any survey of the future of these concentrates? From the evidence it would appear that both the C.N.R. and the government took the position of saying that they did not have to worry about that because that is the problem of Cominco, and that if they were willing to enter into an agreement that was no concern of the government or the C.N.R. That is the impression I received from the testimony of the witness, Mr. Purves, and also from what the minister said.
As the committee knows, there is a drive on in the United States congress to raise tariffs and also to impose quotas upon lead and zinc. The question that comes to mind is this. Suppose the decision with respect to lead and zinc is similar to that in relation to uranium. What steps has the government taken, either through an analysis by an interdepartmental committee or a study made by its economists and experts, to ascertain the future of lead and zinc tariffs? This is not a matter involving a few million dollars but perhaps $100 million. I wish to be enlightened on that point if the minister is able to assist me.


Léon Balcer: The experts and economists in my department who dealt with this agreement reached the conclusion that the special guarantee from Pine Point and Cominco of a shipment of 215,000 tons a year for a period of ten years was a good guarantee as far as the government is concerned. As the agreement states, if in any year Pine Point produces and ships less than 215,000 tons, the mine will have to pay $7.75 for each ton it fails to produce.
According to the experts in my department who are well versed in questions involving

tariffs, the building of railways and the drafting of agreements between the government and railways, this is a fair guarantee in the circumstances. The mine will spend $21 million to build a plant at Pine Point, and Cominco will spend $16 million to enlarge its smelter at Trail. We feel that these two companies are taking a risk. We feel that if they produce at that rate for ten years there is no reason to believe that immediately after that period the traffic will drop off. I think the agreement for ten years is a fair agreement. This is the agreement that is usually concluded in the trade with respect to the period of time and the amount of concentrates.


Lionel Chevrier: In his statement the minister said this was a fair risk, and he has now repeated that comment in another form by saying it is a fair agreement. Is that as far as the minister will go in qualifying the financial soundness of this agreement?


Léon Balcer: As I said earlier, if we take into account the general situation it will be seen to be a very good agreement. I think it is a calculated risk, and that the people of Canada will appreciate that the government has entered into this venture.


John Whitney Pickersgill: I wish to make one or two
observations based upon the minister's disclosure this morning that in order to cover not merely the maintenance and operating cost but also the amortization of the capital this railway would require to ship approximately 800,000 tons of concentrates a year.


Léon Balcer: If there were no other shippers.


John Whitney Pickersgill: Yes, I will give the condition. I understand that this calculation is based on there being no other traffic. This is a good hard measure-it may not be accurate, of course; it is an estimate, and we recognize that-of the amount of traffic in one form or another that this railway will have to get in order to give a return to the people of Canada. Even though the treasury will not get the capital back directly, presumably it will get it back in indirect benefits through taxation and through reduction of the deficit of the C.N.R., and in that sort of way.


Léon Balcer: I am sorry; I do not like my hon. friend to be under the wrong impression. It is the amount that would be derived from the shipment of 800,000 tons of concentrates that would completely amortize the $86 million. It is not the taxation, salaries and things of that sort. It would be strictly the amounts paid by the company-
Canadian National Railways


John Whitney Pickersgill: I understand that perfectly. There is no provision in the agreement indicating that it would ever come back to the treasury directly if 800,000 tons were shipped. The only way it could get back to the treasury is through the profits of the C.N.R. or incidentally in an even more indirect way through increased business producing increased revenues, which is a proper consideration. I do not object to it at all. I think we would never develop this country if on every expenditure we said we have to get the return directly. I have never argued that, and no one on this side has ever argued that, but we feel we must be shown there is either a direct or an indirect return. Therefore we really need a very hard assurance that in a reasonable period of time there is going to be traffic of this volume on this railway, or it is not going to make a return. In other words, we have a measuring stick now to measure this proposition in hard terms, namely 800,000 tons of concentrates or its equivalent in other forms of traffic.
Last night the hon. member for Peace River in a rather persuasive intervention-and one understands the incentives to persuasion in the case of the hon. member-sought to show what other traffic there would be on this railway in addition to the concentrates.


Mr. Pugh:: At what page of Hansard?


John Whitney Pickersgill: At page 8890. He quoted from the report of the mining commission. I have had a chance this morning to look at the case made by the hon. member for Peace River. He quoted from Mr. Anderson-Thomson, whose qualifications he described very flatteringly. I have never met him and I have no reason to believe he is wrong. In fact in most matters not connected with his riding I would accept the words of the hon. member for Peace River without much question, and I would accept his word about any facts at any time; but when it comes to accepting his opinions, that is another matter.


David Vaughan Pugh: I bet it is mutual.


John Whitney Pickersgill: Well, I hope it is mutual. I would not expect the hon. member to accept my opinion, but I would expect him to accept my word on a matter of fact, and I am sure he would.
The hon. gentleman quoted testimony to the effect that from the potential agricultural traffic both the C.N.R. and C.P.R. can expect an addition to their gross revenues of $2 million per annum; not immediately, of course, but over a period of years that would be a reasonable period of calculating by a businessman. I take it that is what the hon.

Canadian National Railways member meant. I am seeking to make this case in the best possible way, because I want to be lair.
The hon. member then referred to lumber. He said there would be a total yearly revenue-this is not a quotation, and I hope the hon. member will listen very carefully because I want to be sure I am correctly stating the implication of what he said. Perhaps I had better read what he did say:
He indicates that if the total potential of the annual allowable cut is developed, and I do not anticipate that this will happen at once, of course, there will be a total yearly revenue to the two railway companies of $3,600,000.
I do not know whether the hon. gentleman meant gross revenue to both railways, but I assume that since the only other figure was gross revenue to both railways, these are gross revenues. They are not profits; indeed, it is a nice question whether they would ever enter into the realm of profits at all. I feel that approximately $5.5 million of gross revenues from the only other two immediate sources in prospect-and that is not right away, and it is not just to this line mind you, but to the Canadian National and the Canadian Pacific all over the country-does not go very far to fill the gap between the
215,000	tons of concentrates and 800,000 tons of concentrates which the minister has indicated his officials consider are really necessary to make this a self-supporting undertaking.
This really points up what we were trying to get, that is precise and hard information that is wanted by my hon. friend from Laurier and me and others who joined with us. This is the point we were trying to make last night, that we should have more than a gleam in the ministers' eye. We should see a probability, not this year, not next year, but a probability, not a possibility, of traffic of this magnitude in order to justify this operation.


Mr. Baldwin:: I calculated last night that the hon. member for Bonavista-Twillingate would in all probability make an estimate of the statements I had made. I will not say I did it deliberately, but I left out two other prospects for traffic which I now bring to the attention of the committee. If the hon. member will read page 86 of the report of the commission to which I referred him last night he will find that in addition to the lumber there is a potential of traffic generated by pulp which would be available from this area. I think the hon. gentleman can see that in due course this potential would justify six pulp mills producing 200 tons a day, which would bring about a yearly traffic of $12 million.
I think the hon. member will see on the same page that in addition, once you get to the stage where you have this amount of


business generated you are bound to find that more people will be in the area. There will then be incoming traffic of manufactured and processed goods, the long haul type of carriage, from the central and eastern parts of the continent. As I understand the formula which has been worked out, the profit pattern of railway transportation indicates that manufactured and processed goods of that nature always yield the highest revenue. Therefore when you ship out $5 million to $10 million worth of goods from this area you are bound to have a situation where substantial traffic in processed goods, probably equivalent to the same amount of money, will be shipped in yielding that much revenue to the railways.
This, I think, answers the point raised by the hon. member for Laurier, that this is not the kind of railway where you have to wait until the last tie is laid and the last spike driven before there will be revenue. Once this line has been laid and completed for a distance of 75 miles-and I refer to 75 miles from the south, because I am assuming that is where construction will start-substantial traffic will immediately be generated. I think the cost will be very much less than the average of $170,000 a mile. There will then be railway traffic available on the first 75 miles, and the cost of the construction of that mileage will probably be less than $10 million. In the ensuing years there will be more construction and more traffic generated, both incoming and outgoing. All these are things which hon. members have not taken into account in their calculations.
I should like to refer hon. members to the report of the Gordon commission and the Paley report which, it will be recalled, was a report delivered some years ago to the president of the United States. This report was based on careful calculations of the indicated material requirements of the North American continent. The Paley report coincides pretty well with the Gordon report. They say it is inevitable that over the course of the next 15 to 25 years there will be required of Canada substantial quantities of these lead and zinc concentrates. Mr. Fitzpatrick, the president of Cominco, in a speech he made early this spring in Edmonton, said that in his opinion the opening up of Pine Point would probably lead to the development of the mine and the shipment of concentrates for a greater period than 25 years. This is the statement of a responsible man and indicates the premise on which his company is prepared to expend almost $40 million. Surely, Mr. Chairman, if there are indications of substantial traffic for a greater

period than 25 years, this should be an answer to the very pertinent questions which have been asked.


Mr. Robichaud:: Last evening and earlier today we heard statements from the Minister of Transport in an attempt to justify the spending of $66 million of the taxpayers' money for the construction of a railway which could lead to the development of mineral deposits in the far north. I am sure the minister is aware of the fact that in 1956 the Canadian National built 16 miles of railway in northern New Brunswick under similar, but probably much more favourable circumstances. This railway has been used rarely, I think only for the official opening ceremonies.
We have in New Brunswick, in populated and inhabited areas, from 12 to 20 miles from deep-sea ports, over 10 million tons of mineral deposits which are awaiting development. A small portion of this amount could be spent to much better advantage to the taxpayers of this country if the government would, by means of tax incentives or other provisions, stimulate the development of the deposits that are located in these populated areas. Here we are considering the construction of a railway from 500 to 600 miles long which goes almost nowhere, leading to mineral deposits, and those concentrates will have to be transported about 1,000 miles or more before they can be processed.
I repeat that we have right in northeastern New Brunswick 100 million tons of mineral deposits which are idle now, awaiting more advantageous market facilities. I suggest to the minister, therefore, that serious consideration should be given to the provision of facilities for existing mines in areas to which access is easier.


Lionel Chevrier: There are two questions that I do not think have been cleared up to my satisfaction. One of them has to do with the traffic from the various points. I think it is quite clear that from Great Slave lake to Grimshaw, a distance of 438 miles, that is traffic which would belong to the new line; from Grimshaw to Edmonton over the N.A.R., 325 miles, the traffic is divided equally between the two railways; from Edmonton to Calgary, 233 miles, the traffic moves over Canadian National; from Calgary to Tadanac, 460 miles, the traffic moves over the Canadian Pacific. I do not believe it has ever been stated how the traffic will move from the various points to British Columbia ports. There are several lines, as the minister knows. There is the national transcontinental, there
Canadian National Railways is the P.G.E. and there is the Canadian Pacific. What is the division of traffic in so far as the various British Columbia ports are concerned?


Léon Balcer: My information is that it will be 50-50 between the two railways.


Lionel Chevrier: The other question that came to my mind was this. Have the provincial interests been approached at all in connection with the cost of this railway? By that I mean that sometimes when arrangements are not satisfactory to Canadian National Railways, in the financial sense, in connection with a railway of this nature, namely of a developmental character, the provincial authorities are approached to ascertain whether or not they would be willing, because of the natural resource development which will ensue in their province, to contribute a subsidy toward the construction of the line. Were the provincial interests involved here approached in that respect?


Léon Balcer: Not to my knowledge, Mr. Chairman.


John Whitney Pickersgill: I should like to refer to the first question raised by the hon. member for Laurier, the division of traffic to British Columbia ports. I was not a member of the committee, so I was not able to ask this question during the committee proceedings. I presume the reference here is to concentrates which would be shipped not to Trail or Tadanac but to British Columbia ports for export, presumably from Edmonton. I presume there would be no choice of route up to Grimshaw, and there would be no choice beyond Grimshaw unless a line were built to the P.G.E. Presumably the agreement says the concentrates will be shipped from Edmonton; I read the agreement once and I think it said something about a fair distribution or something of that sort. I must say that my opinion of what a fair distribution would be, having regard to the fact that the taxpayers are putting up all the money to build the railway, would be 100 per cent to the Canadian National Railways. If the taxpayers are going to put up this money, and if the only way we can get back a return on our capital is directly through a Canadian National surplus, I do not see why any traffic should go via the Canadian Pacific where there is a Canadian National line.
There is no Canadian National line between Calgary and Trail, so that traffic has to go by the Canadian Pacific. However, a firm undertaking seems to have been given that the Canadian National will get the traffic between Edmonton and Calgary. During the sessions of the committee on railways

Canadian National Railways air lines and shipping I asked Mr. Gordon a question about this traffic, and I am hoping that my intervention may have had some influence in making sure this traffic did go by Canadian National.
I have nothing against the Canadian Pacific; far from it. However, I see no good reason, if the taxpayers are going to put up the capital to generate this traffic, why the Canadian National should not get all the traffic everywhere it has a line. It seems to me this is one respect in which the government should insist upon this agreement being renegotiated in the interest of the taxpayers.
I assume that most of these concentrates will go to Trail. However, there may be an export market for concentrates beyond our smelting capacity in Canada. I suppose the government hopes there will be such a market or, at any rate, at some stage there is going to be more traffic. Surely we ought to make absolutely sure that all this traffic the C.N.R. can handle goes to the C.N.R.
It seems to me that this is a very serious defect in the agreement. If the C.P.R. were putting anything into this project, it would be another matter. However, they are not putting a plugged nickel into it. There is therefore no earthly reason why the C.N.R., if it has the capacity to do so, should not carry the traffic. I wonder whether the minister would comment on that aspect.


Léon Balcer: As I said earlier, the fact is that from Pine Point to Grimshaw it will be all C.N.R. We all agree on that. On the N.A.R.-this is a jointly operated railway and there is nothing we can do about it-it has to go by N.A.R. From Edmonton to Calgary the situation is this. I can tell my hon. friend that there was a very substantial discussion that was carried on for a long time among the various parties to the agreement, and finally the government and the C.N.R. obtained agreement that all traffic between Edmonton and Calgary would be carried on the C.N.R. line which, by the way, is longer than the C.P.R. line to the same points.


John Whitney Pickersgill: Not much. The rates are the same.	"


Léon Balcer: That is a great departure from any usual practice in the circumstances.


John Whitney Pickersgill: I think it is rather too bad that I did not ask Mr. Gordon another question in the committee last July. We might have obtained some arrangement between Edmonton and the coast. However, I think the minister ought to look at this matter again. After all, as my friend the hon. member for Laurier pointed out last night, the C.N.R.'s immediate concern is merely to

cover its cost of maintenance and operation. The C.N.R. has no obligation to get any return on the capital. They do the best they can, no doubt.
After all, however, this is a pretty good deal for the C.P.R. and its creatures Cominco and Pine Point mines. We should not lose sight of the fact that between $66 million and $86 million of the taxpayers' money is going to be used for the immediate purpose of making a property owned largely by the C.P.R. a mine instead of a prospect. That is a fairly big plum for the C.P.R. If the taxpayers are going to do that, surely every ounce of traffic the C.N.R. can carry should go to the C.N.R.


Léon Balcer: That is exactly what happens.


John Whitney Pickersgill: No, it is not what happens. As far as traffic going to Trail is concerned that is what happens, but as far as traffic going from Edmonton to the Pacific coast is concerned, the minister told us it was to be divided 50-50 between the two railways. The C.N.R. has a railway that is, of course, a great deal better because the C.N.R. goes direct from Edmonton through Yellowhead pass. For the C.P.R. to carry this traffic it will have to go to Calgary through the Kicking Horse pass or away down through the Crows-nest pass. So in common sense there is no reason why any traffic going from Edmonton to the coast should go on any other railway than the C.N.R. I think the government should insist on this stipulation.


Léon Balcer: I should not like to have given the committee the wrong information. I am not quite sure with regard to these concentrates for export. All I can say is that the C.N.R. are extremely pleased with the situation between Edmonton and the coast and believe they have a very favourable arrangement. Unfortunately, however, I cannot spell out what the agreement is as far as that part of the traffic is concerned. I know, for instance, that in the middle of the fight for the traffic between Edmonton and Calgary the C.N.R. were extremely keen on getting every possible bit of advantage as far as traffic was concerned, and they were pleased at the situation as far as the traffic between Edmonton and the west coast is concerned. I should not like to leave the committee with the wrong impression that the C.N.R. have given up any of its part of the shipments, as they were extremely pleased with the arrangement.


Lionel Chevrier: May I ask the minister to explain paragraph (a) of clause 6? It deals with the responsibilities and obligations of Pine Point mines. From this provision it would appear that the payments do not begin

until 1966, and also that there may not be an obligation on their part to pay the full amount of $20 million. Will the minister explain the subclause and also comment on the two points I have raised?


Léon Balcer: As I said earlier in this debate, what is meant by subclause (a) is that in addition to $7.75 per ton, the mining company will also pay a special transportation charge based on the value of the concentrates shipped, starting three years after the commencement of production and extending for 10 years. This will not exceed $2 million in any year and $20 million over the whole 10 year period. At the anticipated rate of production and at average lead and zinc prices prevailing during the period 1951 to 1960, this contribution would aggregate $12,500,000 over the ten years. This amount is to be payable to the railway which in turn will pay it to the government. It constitutes a capital contribution by the mining company toward the building of the line.


Lionel Chevrier: Is this special transportation charge the minister speaks of the one referred to in schedule B of the agreement?


Léon Balcer: That is right.


Lionel Chevrier: If you look at that schedule, you will find that if the value of the ore or concentrate goes below $64 they do not pay anything. Is that right?


Léon Balcer: Yes, that is right.


Lionel Chevrier: Is the minister's figure of $12 million based on ore at $80 per ton or on ore at $70 per ton, or on a price between the two?


Léon Balcer: As I said, the $12,500,000 would be the contribution of the company if we were basing the payments on the average lead and zinc prices prevailing during the period 1951 to 1960. If I am not mistaken this average price is about $90. I am not too sure on that point, but my impression is that the average price prevailing from 1951 to 1960 is about $90.


Lionel Chevrier: This clause states that the payments to Her Majesty shall not exceed $20 million. However, in referring to schedule B of the agreement the minister has now indicated that the special transportation charge, which I take it is the charge referred to in subclause (a), will bring in roughly speaking, based on the average price between 1951 and 1960, approximately $12.5 million. Where is the other $8 million or so going to come from?


Léon Balcer: That is the point. The agreement is that this figure will fluctuate with the price of lead and zinc. Of course if lead and
90205-6-562
Canadian National Railways zinc reach a very high price it will make quite a difference to what the company has to pay. The company had no interest in paying this, but after long discussion they agreed to pay it as their share in the building of this line. It is a capital contribution, and we have agreed to a limit of $20 million. I think this is quite fair, if the average price for nine years produces $12.5 million-I would imagine that for the next ten years we cannot expect to go too fast-and if the price increases by that amount, so much the better. But we had to put a certain limit on it, and we thought in fairness to all the parties $20 million would be a fair limit.


Lionel Chevrier: Am I being fair in the interpretation of this agreement when I say that should the price of the concentrates go below $64, under this clause no money will be payable to Her Majesty as a special transportation charge?


Léon Balcer: That is quite right.


Lionel Chevrier: Then if the price is between $70 and $80, which was the average price between 1951 and 1960, the government, Her Majesty, will receive in the neighbourhood of $12 million?


Léon Balcer: That is right.


Lionel Chevrier: Finally, am I fair in saying that this might well be the full amount which Her Majesty will receive, and not the $20 million?


Léon Balcer: Definitely.


John Whitney Pickersgill: I should like to ask the
minister whether the officers of the Department of Finance and treasury board scrutinized this agreement. The minister tells us that on the basis of the last ten years this clause would produce $12.5 million, yet parliament is given the impression that it is going to produce $20 million. Is that the measure of the inflation the Minister of Finance is expecting over the decade after this bill comes into operation? Because if it is, that is a frightening prospect indeed and is very different from what he said in his budget speech and speeches made elsewhere.
It seems to me that either the government have been trying to pull the wool over our eyes by putting in this $20 million when there is no real prospect of deriving much more than $12 million or $13 million, or they are expecting a staggering inflation over a short period, relatively speaking, as these things go. Of course if there is a staggering inflation of that description we will not be getting back the dollars we are putting into this, but dollars that are worth a great deal less. On the other hand, as the hon. member
8914	HOUSE OF
Canadian National Railways for Laurier pointed out, if rather than staggering inflation we have a fall in the price of lead and zinc, which might easily happen if some of these protectionists in the United States have their way, we might get $8 million, $6 million or anything down to zero out of this.
When the minister talks about this being fair, it certainly does not seem to me that it is very fair to the taxpayers. This is by way of comment. However, I should like to put a question to the minister. I have read the agreement through once. I am not a lawyer. The minister is, and he can perhaps put me straight on this. There is a provision that the first charge on this special transportation fund is not the replacement of capital, but is to make good any deficiency in revenues to the C.N.R. That is to say, if less than 215,000 tons are shipped in any year, the special transportation charge goes first of all to the C.N.R. to make up this deficiency, and the crown only gets what is left over, if anything. Is that correct?


Léon Balcer: If there is a deficiency under
215,000	tons.


John Whitney Pickersgill: Is there any provision for making up that deficiency in the succeeding year, or does the taxpayer just lose it for good and all?


Léon Balcer: There is a rider clause there. If the mine ships less than 215,000 tons they pay a fine of $7.75 a ton on the difference. If it ships more than that, this is set aside in reserve to meet the deficiency of the next year, if there is a deficiency. I do not think the Canadian taxpayer stands to lose anything. I am not quite sure whether I understood the question.


John Whitney Pickersgill: It is very complicated. I know I do not understand this agreement; I say that to the minister at once. However, I do not think anybody should let this bill pass until we do understand it, even the more stupid of us.


Gordon Minto Churchill: We will never pass it if we have to wait for you.


John Whitney Pickersgill: I know, but the hon. gentleman will find it is probably just as well to wait in some of these cases. By waiting, a great many mistakes have been avoided in the past. It looks as though there is a real opportunity to avoid one right now. What I am trying to get at is this. If there is less than 215,000 tons shipped in any one year during the operation of this agreement, this money-what I call the $20 million-will not go to the crown; it will go instead to the C.N.R. to make up for the loss in freight. Is there any way of ever getting that back? Is


this debited against the company and do they have to make it up the next year, or does it mean there is that much more lost to the treasury? Mr. Chairman, perhaps the minister would like to consult his officials on this matter.


Léon Balcer: I will have to do that.


John Whitney Pickersgill: I wonder whether the minister would at the same time ask his officials, so he can tell us at 2.30, precisely what the arrangement is between the two railways regarding traffic between Edmonton and the Pacific coast.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
The Deputy Chairman:: Shall clause 6 carry?


John Whitney Pickersgill: No, Mr. Chairman. At the time of our adjournment at one o'clock the minister said he would give us an answer to two questions at 2.30. One concerned the arrangements made for traffic beyond Edmonton which would go to the Pacific coast, or anywhere else for that matter, rather than to Trail. The other question was set out in a statement in which I defined the matter carefully and at length, and perhaps the minister would just as soon define it himself this time.


Léon Balcer: In answer to the first question, any traffic in concentrates out of the Pine Point mine only which goes to the west coast for export will be divided on the basis of 50-50 when it leaves Edmonton. All other traffic will be controlled by the C.N.R.
The second question asked by the hon. member related to subclause (b) of clause 6. First of all, I must say that the mine will be organized to produce a minimum of 215,000 tons annually, and it is expected there will be no deficiency. The whole agreement is based upon that. The whole undertaking among the various parties concerned is based upon the assumption that a deficit is not to be expected. However, if there should be a deficit in any particular year, the first money drawn upon is the credit which the mining company may build up through shipping more than 215,000 tons in one year. If there is still a deficit, the money deriving from the special transportation charge is drawn upon, and should there still remain a deficit the Pine Point mine has to meet the remainder at $7.75 per ton. There is also a provision that the credit built up by the mining company shipping more than 215,000

tons a year would go to repay, first, the amount of money needed to meet a deficit by the mining company and, second, to repay the government for any money drawn from the special transportation charge account. Third, it would be used to repay the mining company for any of the deficits to which it might have contributed at $7.75 a ton.


Lionel Chevrier: Dealing with clause 6, subclause (b), I understand this to mean three things; first, a guarantee to the C.N.R. by the mine; next, a guarantee to Her Majesty by the company of the traffic volume; third, a guarantee by Her Majesty to the railway to the extent of the payments referred to in paragraph (a). That is my understanding of the breakdown of paragraph (b) of clause 6. I ask the minister now if this means that the payments received by Her Majesty under paragraph (a) will be transferred to the C.N.R.


Léon Balcer: No, only if there is a deficiency in one year and the deficiency cannot be met from the surplus accumulated in the previous year. If that is the case Pine Point railway can use the money-the special transportation charge-in the first instance and, second, the mine would have to start paying $7.75 per ton, as I explained previously.


Lionel Chevrier: What is the meaning of the following language in the first part of paragraph (b):
(b) a guarantee to the company by Pine Point Mines Limited, and, to the extent of the payments referred to in paragraph (a), by Her Majesty-


Léon Balcer: That is it.


Lionel Chevrier: Does that mean that Her Majesty guarantees the C.N.R. to the extent of the payments it receives from Pine Point Mines?


Léon Balcer: That is what I have explained. There are two guarantees given to the C.N.R. First there is a guarantee by Pine Point Mines and, second, a guarantee by the government. Everything that Pine Point Mines ships over
215,000	tons will be paid to the C.N.R. It will be a reserve. If in succeeding years there is a year in which there is a deficiency, the money that has been paid to the C.N.R. will be used to meet the deficiency. If there is still a deficiency in that year the balance will be paid by Pine Point to the government as a special charge. This special charge will be paid to the C.N.R. Third, if all this is not enough, Pine Point will have to pay a minimum of $7.75 a ton for every ton that is not shipped on the line.


Lionel Chevrier: From what has been said do I understand that if the traffic falls short of 215,000 tons per year the government then might well have to put up the money 90205-6-5621
Canadian National Railways to cover the operating and maintenance charges of the C.N.R.? As I understood the evidence in the committee, the C.N.R. wanted to make sure of one thing, namely that it had sufficient traffic at a fixed freight rate to guarantee the operating and maintenance costs of the line. That was clearly explained in the committee and I believe is understood. If the traffic in this movement of cencentrates is not sufficient to pay the operating and maintenance charges of the line, the government under this clause will have to put up the money to cover the operating and maintenance charges of the C.N.R. Is that correct?


Léon Balcer: Only up to the amount the government will receive from Pine Point on these special transportation charges I mentioned earlier. If the charge is not enough to meet the deficiency, then Pine Point railway will have to pay $7.75 for each ton shortage under
215,000	tons.


Lionel Chevrier: Might a contingency arise under this clause wherein the government would have to put up the operating and maintenance charges over and above the capital investment?


Léon Balcer: No, this cannot happen. As I explained earlier, the only thing the government could be called upon to pay is what the government has received from the mine as a special transportation charge. That would be the limit. Over and above that, payment would be made by Pine Point Mines.


Lionel Chevrier: I wish to say respectfully to the minister that that is not the way I interpret paragraph (b), which I shall place on the record again:
(b) a guarantee to the company by Pine Point Mines Limited, and, to the extent of the payments referred to in paragraph (a) -
That is the $20 million. I continue:
-by Her Majesty-
That is a guarantee by Her Majesty. I continue:
-of such traffic volume over the railway line as will, in the opinion of the company, be sufficient to ensure recovery of the cost of operating and maintaining the railway line-
In my opinion that language means that if there is not enough to be derived from the special transportation charge the government will have to pay the operating and maintenance charges of the C.N.R.


Léon Balcer: I am sorry, but my hon. friend is under the wrong impression. In this paragraph there are two guarantees. The first is a guarantee by Pine Point Mines to the C.N.R., and the second is a guarantee by the government to the C.N.R. The agreement outlines in detail what the guarantee is from both

Canadian National Railways sources, the mine and the government. As I explained earlier, it is set out in the agreement. First, the deficiency is met by drawing on the surplus of the previous year, if there is a surplus and if it is large enough to meet the deficit. If a surplus does not exist or if it is not large enough, the government is called upon to draw on the special transportation charge that has been paid by Pine Point, and if that is not enough the government does not have to pay one cent more. What is paid in addition to that will be paid by Pine Point Mines.


John Whitney Pickersgill: Mr. Chairman, I wish to put a case which no one expects will arise-


Gerald William Baldwin: Mr. Chairman, may I be recognized?


John Whitney Pickersgill: Mr. Chairman, I wish to follow the precise point dealt with by the minister.


Gerald William Baldwin: I also wish to do so, if the hon. member will bear with me. I wish to put a simple question to the minister. Under this paragraph there is recourse to the government, but there can be recourse to the government only to the extent of the special transportation fund which has built up. The railway may have an opportunity to draw upon the amount which is refered to in section 3 of the agreement, which is the revenue received by the railway from the industry and its suppliers applicable to the carriage of freight and merchandise other than ore, and also the revenue received by the railway from other mining companies applicable to the carriage of all types of ore and concentrates. Only if those two sources are exhausted will there be recourse to the amount of the special transportation fund which has been built up. Is that not correct?


John Whitney Pickersgill: The hon. gentleman has simply said in other words what the minister has already stated. I wish to put to the minister what I might describe as an extreme situation, and I shall do so whenever I have the minister's full attention. The extreme situation I wish to present is this. Suppose the mine does not operate at all. In that case there will be no special transportation charge, because it arises out of the price of the concentrate and its volume. In those circumstances there will be no traffic if the mine does not operate during the 12 month period. The minister had better not say this is theoretical because it was not theoretical in New Brunswick, which is a great deal nearer the markets than this other place. In that case is the company obliged none the less

to pay to the C.N.R. the amount of money realized by multiplying 215,000 tons by $7.75 a ton in that year.


Léon Balcer: Exactly.


John Whitney Pickersgill: That is absolutely clear?


Léon Balcer: Absolutely clear.


John Whitney Pickersgill: If there is no production at all the company is still obliged to pay 215,000 times $7.75?


Léon Balcer: Unless there is an accumulated surplus from the previous year.


John Whitney Pickersgill: Quite. I want to put another question to the minister. In his explanation of this very complex matter the minister did indicate that if in a 12 month period there was somewhat less than 215,000 tons shipped and there was no surplus from any previous year, the next way of meeting the deficiency of the C.N.R. would be from this special transportation fund. Suppose that happens in the very first year, is that an airtight compartment, that first year, or does the special transportation fund recover in the second year what is used by the C.N.R. instead of the crown for the first year?


Léon Balcer: I am not too sure that I understand my hon. friend's question correctly.


John Whitney Pickersgill: Let me put it arithmetically.


Léon Balcer: I think I can clear it up by stating that the special transportation charge is the charge that will be paid by the company over a period of ten years, beginning in the third year after the start of the operation. With respect to anything that is shipped during the ten years, whether it is surplus or deficiency, at the end of ten years the government will make up the total and a special charge will have to be paid, or a special contribution charge will have to be made, by the company as a contribution to the capital of the line.


John Whitney Pickersgill: Suppose-this might happen, sir-there is a deficiency every year in the whole ten year period so that in every year some of the special transportation charge which in the normal course is supposed to go to reduce the capital cost has to be used for operating and maintenance. At the end of the ten year period, as I see it, the agreement is over; whatever part of this fund has had to be used to meet those deficiencies, the crown loses.


Léon Balcer: If there is no money from the special transportation charge it is estimated that the cost of the line will be $86 million.

But if a special transportation charge has to be paid by Pine Point and it is not drawn upon too heavily by the deficiency that we are talking about, then it will be $86 million less what is left in the special transportation charge.


John Whitney Pickersgill: But the minister did seem to suggest at one stage that if this fund needed to be drawn upon in one year there was some way of recovering that amount in a subsequent year. Would the minister explain how it is done?


Léon Balcer: Yes. First of all, it will be the reverse operation. I am getting all mixed up now; it goes backward. First of all, it is the amount of money contributed to meet a deficiency by the mining company. That will revert to the government. Second, it will be repaid to the government for any money drawn from this transportation charge. Third, it will be a repayment to the mining company. I am not quite clear there.


John Whitney Pickersgill: Perhaps I can give a hypothetical illustration to the minister, that would perhaps clarify the matter. This is very important. Suppose during the first year- I take the first year so there will not be any complications about what was done before- instead of being able to ship 215,000 tons they are 30,000 tons short and ship only a 185,000 tons. They will have to draw on the fund. Suppose the price of concentrates is fairly good and they have quite a lot in the special fund. They will draw on the fund 30,000 times $7.75 to make up this deficiency. Well, if in the next year they are able to ship 245,000 tons, would they pay freight at $7.75 on that
245,000	tons, and would the extra money go back into the special fund? Is that how it operates? I am trying to assist the minister.


Léon Balcer: Yes.


John Whitney Pickersgill: I would like to be sure about this.


Mr. Winch:: Mr. Chairman, this matter becomes more and more confusing. We actually started this debate at around eight o'clock last night and we are still on it. I should like to ask the minister just one question. In view of the bill and the contractual agreement among the government and other parties, in order to simplify the entire situation, why was this not considered by the government as a straight capital expansion of the Canadian National Railways and dealt with as such, with an agreement that certain money would come back to the government because of the help it was going to give Consolidated Mining and Smelting Company through the medium of the Pine Point railway. Would it not have been a lot easier to
Canadian National Railways
deal with this thing as a straight capital
expansion of the Canadian National Railways?


Léon Balcer: Mr. Chairman, the reason the bill is based on such an agreement and that we did not take the very simple way mentioned by my hon. friend is precisely that the government wanted Pine Point Mines and Cominco to come into the picture and guarantee a minimum tonnage to be shipped from this mine every year. We also wanted this mine to contribute to the operation, the maintenance, and part of the capitalization of this railroad.


Harold Edward Winch: What the minister is saying now is that if this had been made a straight capital expenditure by the C.N.R. we could not have made that kind of arrangement with the Pine Point corporation.


Léon Balcer: It could have been done. The C.N.R. is a crown company. It still would have been the Canadian taxpayer who in the long run would have been called upon to pay the capital cost.


Harold Edward Winch: They are stuck no matter how you do it.


Léon Balcer: Yes. To reply to this matter of the taxpayer being stuck, I think it is quite proper to read from the brief presented to the Gordon commission, by the commissioner of the Northwest Territories as follows:
A railway to Great Slave lake will not be just another railway. It is not a railway to a lake or to open a mine or to serve a community. A railway to Great Slave lake will be one of the great development railroads of the country. It will not bring population to the Northwest Territories to the same extent that the western railroads brought it to the prairies, but it may well bring in the years ahead of comparable increase in the wealth of Canada. This railway is quite different from most of the branch lines constructed in recent years which were destined to serve one mine, or a group of mines; its purpose is to open up a whole new region. The fact that there happens to be a potential mine of great value at its northern terminus is a piece of great good fortune, for it will enable this railroad to be built without the long wait for reasonable returns which so often has been the lot of a pioneer railroad.
I quite realize that the Pine Point mine will not pay the whole capital cost of the railway or for the operation of this railway. On the other hand, the Pine Point mine will make a very large contribution to the cost of operation and maintenance of this railway and will contribute, as well, to the capital cost of this line. I sincerely believe, therefore, that, using the arguments that have been put forward by Mr. Robertson, this is a railroad that is completely different from the other railroads that have been built in the past, or from the branch lines we are building, like the Mattagami line. The government will not be called upon to
8918	HOUSE OF COMMONS
Canadian National Railways pay one cent for the Mattagami line because that railway is being built to serve one mine. Of course it is a much shorter line, too. This railway is a long one, and I think when you consider all the potentialities of the area we are justified in building it. We are fortunate that at the end of this line there happen to be deposits of lead and zinc which can be called upon to contribute to the cost of this undertaking.


Lionel Chevrier: Is it not a fact, notwithstanding what the minister said and in answer to a question which was addressed by the hon. member for Vancouver East, that the Canadian National Railways were not interested in making the kind of agreement that is set out here, or in making the kind of agreement which they made in the case of the Mattagami railway? If the Canadian taxpayers were not part and parcel of this agreement the Canadian National Railways would never have gone along with it, because they do not think it is a profitable venture.


Léon Balcer: I agree with that entirely.


Mr. Flemming (Royal):: The observations I have to make in connection with the bill now before the committee are brought about by the observations made by the hon. member for Gloucester this morning in connection with ore bodies of a similar nature to the ore body at Pine Point which exist in the northern part of New Brunswick. He mentioned that there were about 100 million tons in the two ore bodies in his own county. I would take exception to his estimate of the quantity, because I think it is much more than 100 million tons. As I recall, there are various ore bodies running into much larger quantities than those mentioned by the hon. member for Gloucester.
My feeling in connection with the bill before the committee is that we have to recognize that we are living in a very large country, a very rich country in so far as natural resources are concerned. I believe the hon. member for Peace River referred to the Paley report, and the fact that it indicates that in the years to come there will be a greater demand for lead and zinc than the available quantities of these two commodities would supply.
I support the hon. member for Gloucester to the fullest extent in so far as bringing to the attention of the committee the need for development in New Brunswick. I believe, however, the premier of New Brunswick has already announced that arrangements will be made shortly for the development of the mines situated in my hon. friend's constituency. It seems to me the committee might take into consideration this fact, that

I see no particular reason for considering there is any conflict between the production of lead and zinc concentrates in western Canada and the production of those concentrates in eastern Canada, I am one of those who feel that there is a need and a place for all the natural resources that can be developed, and which we have in great abundance. I for one do not think progress was ever made by being pessimistic. I do not think progress is made by pessimists. I think we must have some courage and some faith; we have to go ahead and develop our country in the west, in the north, in the east and wherever we may have the opportunity and the natural resources at our disposal.
I suggest, therefore, there is no conflict between ore bodies in New Brunswick and ore bodies in Alberta or in the north. I think there is a need for all of them, and there is room for all of them. We as members of parliament and members of this committee might very well consider that we have every reason to be thankful that this country has natural resources in such volume.


John Whitney Pickersgill: Mr. Chairman, the Minister of Forestry has spoken with his usual moderation. I am not surprised that he is very moderate, almost tepid in his enthusiasm for the bill that is now before us. I think I would be too if I were on the treasury benches at this time. If I were on the treasury benches I do not think the bill would be before the committee.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I do not say there would not be a bill before the committee, but it would not be this bill with this agreement. I say that without any hesitation whatever. While I can readily agree with the Minister of Forestry that there should be no conflict between the development of mines in the east and the development of mines in the west, I think he will agree with me that there should also be equality of treatment.
One of the things that an investor in a mine takes into account when he makes his investment is the proximity of the mine to its market. This is one of the things that I, at least, would consider if I were going to invest in a mine. However, the market is not going to grow any more because we develop two mines in Canada rather than one. It will grow because there is an increasing demand, and not because there are more mines, unless the price is lowered so that the demand is increased in that way.
There is no doubt that this bill makes it possible for one company, having one mine in one place, to proceed with the development of that mine. Whatever the ancillary and

secondary developments may be-and if we are going to construct this line I hope there will be lots of them-I think they are highly speculative. The only shipper willing to sign an agreement to ship anything on this railway is this mine, and I am sure if there are others we would have been told about them. This is the only shipper the C.N.R. now have. All they have in addition are a number of prospects. The hon. member for Peace River in my judgment did not improve his case, or perhaps I should say that from my angle he did not improve his case very much, by talking about additional pulp mills. The Minister of Forestry and I know how difficult it is to get pulp mills and paper mills established, and I do not think either one of us would be very much impressed by the kind of pulp and paper mills a member of parliament can establish in his constituency in a debate.
I should like to see a dozen contracts, even poor contracts like this one, between the C.N.R. and potential shippers, at least something concrete as to some kind of traffic. But to come back to this point I was making, may I say this. What we will do if we go ahead with this bill is to pay from a maximum of $86 million to a minimum of $66 million of the taxpayers' money for which we are to get no interest and no repayment directly, merely to make it cheaper than it otherwise would be for ore of this one company to be moved into the market.
What is the government going to say to every other mine in Canada, for instance to mines that are a good deal nearer the market? What about the people in this Mattagami case that we dealt with this session, who are to pay every dollar of the cost of the railway? Why should they do that? Why should Mr. Jules Timmins and the Iron Ore Company have had to build their railway entirely by themselves and raise all the money to get that iron ore out-and it was a stupendous undertaking- and then have the treasury come along and do this with another company?
The Lynn Lake deal was not like this deal. The deal this government made with the International Nickel Company in northern Manitoba was not like this deal. The thing that really troubles me is how we or this government or this parliament are ever going to face any other company with a mine unless we give them just as good terms as this one is going to get. That is basically the problem.
Perhaps there is not much profit in trying to go into all the details of section 6, as this whole agreement from start to finish, as far as the mine is concerned, is on a basis of heads I win, tails you lose vis-a-vis the treasury. One would at least have expected that since the company has so many safeguards given to it, if it turned out much
Canadian National Railways better than had been expected a little of the gravy would go into the treasury. However, it seems that once the railway gets paid for the maintenance and operating costs the freight rates are to go down, the company is to get all the benefit, nothing is to come back to the taxpayers. If we are going to go into this proposition which is a real example of socialism as I said last night it is an exercise in socialism and very one sided socialism-I think it would probably be a great deal better for the C.N.R. also to take a share in the mine and, if the thing is going to pay, get some of the profits out of it. But according to what we are saying now, we are going to provide the transportation. We hope to get back the cost of maintenance and operation, but we are not even sure of that. We give up all idea of ever making any real profit out of this project unless there are many other shippers. But if the company make any profit they take it all and the treasury gets nothing. It seems to me that this is as one sided a deal as has ever been put up to the taxpayers of this country.


Some hon. Members:: Carried.


Léon Balcer: Just before it carries may I say this. I should not like the committee to be left with the impression that my hon. friend was trying to create, namely that this is a special deal for this mine that was refused to other mines, and all that sort of thing; that this mine has special treatment, and that we are building this railroad just for this mine. This mine happens to be at the other end of this railroad, as I explained earlier, and we are charging a special rate to the mine which is much above the normal rate the mine could expect to pay on any other line across Canada. We are calling upon this mine to contribute to the building of this railroad which has as its primary purpose the development of a brand new area of Canada which is full of promise and which has such a bright future for the population of Canada.


Lionel Chevrier: Before this clause passes I wish to protest again about the manner in which the clause interprets the agreement. I do not think clause 6, with its three subparagraphs, fully interprets the agreement as set out among the parties. While it is an attempt to summarize what is in the agreement, nevertheless it is a very poor summary. As I said earlier, this is a very complicated agreement which has been prepared by topnotch lawyers of this country acting on behalf of three of the parties. To have tried to implement it in these three subclauses in the manner in which it has been

Canadian National Railways done is, in my opinion, not fair to the House of Commons any more than it is fair to the taxpayers of this country.


Léon Balcer: I very much resent those remarks, Mr. Chairman. Actually, I have never seen in any bill for a branch line any statement about the rates that shippers are going to pay or anything like that. It has never been included in a bill of this type. The bill is not a resume of the agreement. The bill states some conditions which are required to be fulfilled before the government undertakes the building of this railroad. This agreement has been drawn not by topnotch lawyers of three companies but by the lawyers of four parties, and the first of the four parties was the government of Canada. As my hon. friend says, we had our topnotch lawyers, who are just as good as the other lawyers and who fought just as hard as they did.
I think it is a good deal for the government and for the C.N.R. There is no secrecy about the matter. The agreement was tabled. The agreement has been in the hands of the opposition. It is open to the press or to anybody. What are stated in clause 6 are the principles on which this line is going to be built. In the past it has never been the practice to give the rates for traffic on a railway line in any bill for any branch line in Canada. We have followed the practice that has been established in this House of Commons.
I think this bill is clear. We have protected the interests of the taxpayers, the Canadian government and the crown owned company, the C.N.R. I sincerely believe that the bill is drafted in proper fashion, and also that the agreement is a very good one as far as the government and the C.N.R. are concerned.


Lionel Chevrier: I am sorry the minister resents the remarks I have made, but so far as I am concerned they are on the record and they remain just as they are. The minister has said that they have been following the established practice. May I say to the minister that they have not been following the established practice. In committee and in the house the minister has stated that this is not the kind of agreement that has been made in former days, that this is an extraordinary agreement. The minister said that.


Léon Balcer: It is the first time that an agreement has been given to the House of Commons.


Lionel Chevrier: It may be true that this is the first time an agreement has been given to the House of Commons, but it is an agreement that is entirely one sided.


Léon Balcer: No.


Lionel Chevrier: What I say is being done is this. The minister or the officers who prepared this bill have simply followed the ordinary pattern of former railway bills, and that is why I say clause 6 is not sufficient. That is why I say clause 6 does not give the house or the Canadian taxpayer any idea of what is contained in this extraordinary agreement.


Gerald William Baldwin: That is not correct.


Lionel Chevrier: It would certainly take more than these three subclauses to do that. I am glad the minister has repeated that there is no secrecy about this agreement. I am going to remind the minister about that statement in a little while when we come to another clause, because I think there may be more to be said about it.
There is no deal by Canadian National Railways or by the government, as far as I know, that is similar to this one. If there are, let us have them. I am sure if there had been any the minister would have detailed them to the house. I am not familiar with all of them, but I am familiar with most of them. Each time there was a guarantee given the Canadian National Railways by the mine for a fixed amount of traffic which would pay not only the operating costs but would go beyond that. In this case there is no provision whatsoever for the amortization of the capital involved. Mr. Chairman, I rose originally to protest against the fashion in which clause 6 of this bill seeks to summarize what is in the agreement among the four parties.


Léon Balcer: Mr. Chairman, perhap the hon. member is right when he says this bill contains clauses that are different from clauses that have appeared in previous bills. However, I must tell him that this bill is complete. It states that other payments are going to be made; it states the type of guarantee we are going to have. As far as details are concerned, if we detailed how much is going to be paid for each ton, and so forth, we would have pages and pages of these freight rates, and I do not think they should be included in this bill.
The hon. member says this is a very poor bill; that it does not give the information that is needed; that it does not guarantee that the taxpayers' money will be properly used, and so on. If my hon. friend is against the bill, he can vote against it. I cannot go any further than the explanation I have given.


John Whitney Pickersgill: Mr. Chairman, we have heard in plain, unvarnished language, such as we never heard in this house during a very celebrated debate in 1956-I never heard it

from the treasury benches

that the opposition has no right to information about the bill before the committee, and if they do not like it they can vote against it. That is a new concept of parliament that the minister has put forward.


Mr. Ricard:: You are twisting the facts and the words.


John Whitney Pickersgill: In other words, "You are not allowed to know how much you are committing the taxpayers to. If you do not like this bill, vote against it".


Mr. Speakman:: There is the agreement.


John Whitney Pickersgill: There is the agreement, but it is not part of the bill. As my hon. friend from Laurier has shown, the agreement is not adequately reflected in the bill.


Some hon. Members:: Oh, oh.


James Stanley Speakman: Are you questioning the draftsmanship?


John Whitney Pickersgill: I could carry that a little further, but I will not. I hope, Mr. Chairman, I will be allowed to make my points and make them consecutively. We have been seeking to get an explanation from the minister about this clause since twelve o'clock, I think, or a quarter past twelve. That is not a very long time in which to consider the details of an expenditure of $86 million, practically none of which is going to be recovered. It is not a very long time in which to be considering the commitment to the expenditure of that sum of money. I say it was impossible for the minister to explain to me-and I do not think I am very much more stupid than the average Canadian taxpayer-


An hon. Member:: Oh, no?
Another hon. Member: Don't pat yourself on the back.


John Whitney Pickersgill: It was impossible for the minister to explain to me, and he finally gave up himself, how this special transportation fund would be drawn upon to meet a deficiency in freight rates in one year that was to be repaid to the treasury in a subsequent year. The mechanics of that are not spelled out in the bill, and even the minister was not able to explain them. The hon. member for Peace River tried to help him a bit, but I do not think we were very much wiser when he was finished.
I have read the agreement myself. Hon. members of the house who are learned in the law, as I am not, have read it, some of them several times. It does not appear to be clear how this money, if it is to be paid back in a subsequent year, is going to be paid back and where it is to come from. Surely these 90205-6-563
Canadian National Railways things should be clear. Surely we who are the trustees of the treasury of this country are entitled to know these things. We are entitled to understand them fully, clearly and comprehensively.
I asked the Minister of Finance this morning to explain to us what his estimate was of how much this was going to cost the treasury. He refused to answer. Well, he did not answer the question; he simply remained in his seat, and then walked out before I had a chance to repeat the question. I suspect the Minister of Finance just hates this bill and does not want to be in the house. Certainly if I were minister of finance and were facing a deficit of $600 million to $700 million in the current fiscal year, and one of my colleagues was introducing a bill to expend $86 million on which there would be no return of any kind before 1966, and no return of the capital or of service on the capital at any time in the future, except for what is provided for in clause 6 (a) which, according to the present prices of lead and zinc would be about 12J million, less the amount that might have to be used to meet the deficiency in freight revenues-and nobody can speculate what that might be-I would not be very happy when the bill was introduced.


J.-H.-Théogène Ricard: Call the vote; then we will know.


John Whitney Pickersgill: It is very easy to say "Call the vote".


J.-H.-Théogène Ricard: Call the vote and we will know how you stand.


John Whitney Pickersgill: That was not the kind of language heard from this side of the chamber in 1956. The desire then was not to call the votes; the desire then was, professedly, to debate a bill. That is the desire now, to debate this matter until it is understood, until we know what it is about, and until the people of Canada know what it is about and what is really being done. If they want it done, of course it should be done; but it should not be done in the dark, and the opposition should not be told "Well, vote on it, blind".
The minister has made a great deal-1 have not said much about it up to now, but I think his last intervention makes it necessary to say something-of the fact that this draft agreement is of a character that was never made available before. I have not checked the records so I do not know whether that is the fact. However, I think that is utterly irrelevant. What is relevant, though, is that on the first day of the resumption of the session in September my hon. friend from Laurier, if I remember correctly-

8922	HOUSE OF
Canadian National Railways certainly someone on this side of the house -asked the minister if in order to facilitate debate on this measure he would table this agreement then. The agreement was ready. The minister admitted that; he said it had been finalized.


Léon Balcer: No.


John Whitney Pickersgill: That is in Hansard. The minister said it had been finalized, but he would not make it available to the opposition. This is not a strategic matter; there is nothing secret in it. The request was made plainly and reasonably. It was made again at the second reading stage of the bill. On both occasions the government declined to make it available, and did not make it available until hon. members were actually in committee, and then only to the hon. members who were in the committee.
I say there is no reason on earth, if the government had been respectful of the rights of the opposition or of the rights of any hon. member, why this document should not have been put on the table the day we came back here so there would have been time for people to be properly informed about this bill, so that when we met in committee those who were members of that committee-and I was not-could have asked all the questions which should have been asked instead of having the kind of debate we have been obliged to conduct in this chamber. Even with this kind of debate, the information we have been given is such that it really is almost incredible that any government should consider proceeding in the circumstances.
The minister said we are building a railway which just happens to have this mine at the end of it-a mine which is going to provide the railway with some traffic. Well, if that mine was not at the end of this railway, everybody in the house knows that this bill would not be before us. If that mine was not there, if that semi-assured traffic was not there for ten years, this bill would not be before us at all. I point out that there is no assurance of any other traffic. There is speculation about other traffic, and I have no doubt there will be other traffic, though I have a great deal of doubt about what the volume of that traffic will be. However, I am not recommending the bill to the house; this government is doing that. The minister has indicated to the committee that four times the amount which is now semi-assured to the railway would be needed in order to amortize the cost of this operation. It seems to me that the government should have something concrete in sight and not merely speculative suggestions as to what the future traffic might be before it embarks on this venture. I say

this because $66 million or $86 million, whatever the cost turns out to be-and it may be more than that-is a great deal of money to spend even today when there is to be no direct reimbursement and no servicing of the debt. There are so many things in so many parts of this country which could be done with that money. It will not be spent twice, and that is why it is frightfully important for us to make sure that we are spending it in the best possible way.


[Stage Direction]
Clause agreed to.
Clauses 7 and 8 agreed to.
On clause 9-Report to parliament.
Lionel Chevrier: I am reminded of the statement which the minister made a while ago that there was no secrecy respecting the agreement and the arrangements made between the parties. In the light of the fact that this is not an agreement of the ordinary kind, I intend to move an amendment to this clause and I hope the minister will have no objection to it.
I am familiar with the type of statement which the minister is required to file under clause 9. This is the type of statement which is usually filed within a fixed period of time after the opening of a session of parliament in connection with other railway lines. But this arrangement has some extraordinary features about it. For example, this is the first time an agreement has been produced. Then again, there is the fact that there is no secrecy about it. In these circumstances it would seem to me that the minister should have no objection to tabling, over and above the information which he would normally impart to the house, an annual report on the operation and maintenance of the line together with a statement showing the net capital investment. With this in view, I move:
That clause 9 be amended by adding at the end thereof the following:
and after completion of the line an annual financial statement on the operation and maintenance of the line together with a statement showing the net capital investment on the said line.


Léon Balcer: We have no objection to this amendment, because the money which would be paid on the part of the government would be drawn from a vote in the estimates of the Department of Transport. At that time the house would have had every possibility of discussing the matter at length. With the assistance of my officials I could have produced all the information needed. However, I shall be glad to give this information.
Amendment (Mr. Chevrier) agreed to.
Clause as amended agreed to.


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


Some hon. Members:: Now.


Léon Balcer: the third reading of the bill.


Lionel Chevrier: We have had some discussion over the last few days in connection with this bill. We on this side of the house have not been satisfied with the agreement which is referred to in the bill and with the contents of the agreement itself.
I wish to make it clear, however, that our position as far as the principle of the bill itself is concerned remains unchanged. I stated on the resolution stage, as I stated on the second reading of the bill and as I state again now, that we are in favour of the construction of the railway line into this northern area but we are not in favour of this kind of bill. We are not in favour of this agreement for many reasons, first, because the railways and the other groups who were approached to build this line turned the proposition down. We are against this agreement because it favours very clearly those persons involved in the agreement as against the crown and as against the taxpayer. We are against the agreement because the government and the taxpayers receive absolutely nothing for their investment-there is no amortization of the capital, there is no amortization of the interest during construction. The minister, himself, has stated that this is an extraordinary kind of agreement. If it is, then some attempt should be made in our estimation to recoup the capital by way of amortization. This has been the practice not only in connection with other railway lines but also in connection with many other public projects in this country. I do not wish to go into this now but there are many examples of projects where the taxpayer's money has been advanced and where that money has been amortized over a period of years, but not so in this case.
It has been clearly stated that the survey is not yet completed and will not be until the end of the year. The survey upon which the estimate is based is not yet completed. How then can there be a clear and intelligent estimate of the cost of this line? Surely parliament and the taxpayers are entitled to know what the cost will be. Neither the minister nor the witnesses in committee were able to give a clear indication of what this railway is going to cost. As a matter of fact, the borings on the line and the bridge have not yet been taken. I understand there is a bridge which must be built and where of 90205-6-563J
Canadian National Railways necessity borings will have to be taken. If it is a fact that the survey will not be completed until the end of the year, what possible injustice could arise from the postponement of this bill until such time as the survey is completed and the estimate upon which we must base our decision made known?
The Prime Minister has indicated, although perhaps not officially at least semi-officially, that parliament is to meet again early in December. The survey will not be completed by that time. What injustice would be done to anyone if this bill were postponed until that time? When parliament meets in early December the government could come forward with a bill containing an accurate estimate of the expenditure involved in this matter.
I wonder what hon. gentlemen opposite would have said when they sat on this side of the house if we had brought in a measure of this nature without knowing the estimated ultimate cost and without having facts upon which to base an estimate of the cost of the project? That is exactly what is taking place here.
It was clearly established as far back as 1956 that the estimated cost of this project would be between $50 and $55 million. We have not yet been told why the estimate of the cost has been increased from $50-55 million to $75-86 million. The latter figure is only a guess because the witness stated that the person who was able to inform us about the cost was on the line and would not appear before the committee as a witness. It seems to me that no great harm would befall the area concerned if this matter were postponed for a couple of months.
Since the survey upon which is based the estimate of the cost of this line is not yet completed and will not be completed until the end of this year there would be no delay in building the railway line if this legislation were not passed now and if a new bill were introduced at the next session of parliament. As I have said at all three stages of our consideration of this bill hon. members on this side were in favour of the construction of a railway line in this area. We are, however, against this bill and this agreement. We favour construction of a railway but as members of the opposition it is our responsibility and duty to carefully scrutinize the agreement. Since there would be no delay in constructing the railway as a result of what we propose and since no one will be hurt in any way whatsoever if we were not to approve the bill in its present form, under the circumstances I move the following
8924	HOUSE OF COMMONS
Canadian National Railways amendment to the motion, seconded by the hon. member for Bonavista-Twillingate:
That the word "now" be left out and the words "this day six months hence" be added at the end of the question.


Léon Balcer: Mr. Speaker, I wish to say a few words on the amendment. My hon. friend has moved that the bill be given a six months hoist which indicates that hon. gentlemen opposite wish to get rid of this bill. The hon. gentleman said he feels it is too early to proceed, that we should wait for the completion of the survey, that it is an awful thing that the bill should have been introduced while the survey remains incomplete. I feel it is exactly the opposite, that the government should be commended for bringing in this legislation while the survey is under way.
We are forced to base our figures on an estimate which in the long run may perhaps not be exact but there is nothing to prevent our correcting the estimate when the survey is finished. The sooner the survey is completed and the legislation passed, the sooner will a few thousand Canadians be employed in constructing the line. I feel this is a valuable reason for our proceeding with alacrity in a situation like this.
The hon. gentleman said he did not receive the information he sought. Last evening and again today I have endeavoured to answer not only the questions of fact but the large percentage of hypothetical questions which have been put to me by the hon. member for Laurier and the hon. member for Bonavista-Twillingate. Approximately 60 per cent of their questions were hypothetical and I have repeated the answers six or seven times. Even now the hon. member for Laurier feels he is not quite sure he understands what is meant by the agreement.


John Whitney Pickersgill: I do not think the minister understands it.


Lionel Chevrier: I hope the minister understands it.


Léon Balcer: I do not wish to repeat the arguments that have been used during the debate but in order that there should be no misunderstanding let me say this. I feel that this bill and the agreement embody a principle which is in the interest of Canadians and the country as a whole. My hon. friend treated very lightly the fact that a mine is located at the terminus of the railway. I remind the hon. gentleman of what was said by the commissioner of the Northwest Territories in addressing the Gordon commission, that this railway is a great developmental railway. It is opening up a new area in Canada. A new pioneer spirit is embodied in
[Mr. Chevrier.l
this undertaking. We are going to develop a part of the country that is rich in potentialities, especially mining, timber and agricultural resources. We are indeed fortunate that there is found on the shores of Great Slave lake, one of the world's greatest lead and zinc deposits and that we have succeeded in having the owner of this mine enter an agreement under which there will be paid rates far above the normal rates and also special charges to help us meet the capital costs of this great project.
The hon. member for Bonavista-Twillingate was hurt when we said, "If you do not like it you can vote against it." What we meant was that the opposition was just trying to carry on this attitude of theirs of criticizing everything and tearing it apart, to try to say that what we are doing is absolutely wrong; but they do not dare face the people and say that they are against such and such a big undertaking that is put forward for the development of Canada. I think this Pine Point railway marks a milestone in the history of the development of Canada, and of the north in particular, and I recommend to the house that it vote against this amendment because it would simply be putting off this great project. If the amendment is passed it will mean the killing of something that will definitely bring a lot of good eventually to the Canadian people.


Mr. J. F. Browne (Vancouver-Kingsway):: Mr. Speaker, before we vote on this amendment may I as a member from western Canada say that I feel I must rise and express the shock that I experienced at the incredible lack of confidence and faith in the future of western Canada and the north as expressed by the Liberal party in this house. I am sure it must come as a shock to every other member of this house. Of course we can realize the handicap that this party is operating under, since it has no members from western Canada to represent it in the house or to advise it. When one considers the attitude that they have adopted in this debate there is little wonder that they have no members from that part of the country.
They have professed to put forward to the people of this country that the only thing they can see in the whole northwest of this country is one mine, and they say if we build a railroad up there that is the only thing we are going to have. Well, surely, Mr. Speaker, nobody in this country has as little faith as that. I cannot understand how a political party, professing to be a major party in this country and representing all parts of it, could possibly or conceivably take such an attitude toward the development of northwestern Canada. As I pointed out the other

day, this is not the first time they have adopted that attitude. When it came time to build the Canadian Pacific Railway to unite Canada into a nation and open up the western part of the country they adopted a similar attitude; they have adopted the same attitude toward this railroad. Some 30 years ago Mackenzie King promised to build it but they have found one excuse after another to put it off. Now we have the same suggestion from the hon. member for Laurier again; put it off again for another six months; it will not hurt. I suppose in his view, after his party put it off for 30 years, another six months will not hurt. I can only say that I think the people in this country are fortunate in having a government in office today that is not going to approach the problems facing Canada with an attitude such as that.
Here we have an opportunity to develop the whole northern part of this country in a way that has been outlined by the government of the province of British Columbia in support of this measure, and by the commissioner of the Northwest Territories, and by the many briefs that were put before the royal commission which investigated the route. We are in a position where we can build this railroad and be guaranteed its operating and maintenance costs for a period of ten years. The hon. member for Bonavista-Twillingate (Mr. Pickersgill) professes to tell us that he does not believe it is possible under these conditions for this railway to operate at a profit. No returns are we going to get, he says. There is apparently no return to the taxpayers from this. Well, I dare say even if what he said were true, even if we were spending $86 million and the Canadian taxpayer was not going to get something back in dollars and cents, the benefit obtained by developing that part of the country would be worth the money.
It has been pointed out already that there are many financial benefits which will be gained from it. I refer in that connection to what was said by the commissioner of the Northwest Territories when he pointed out the amount of ore that was going to be shipped fom this one mine. When the possibility of building the line was investigated in those days the estimate was considerably lower than what was signed for in this agreement which provides for 215,000 tons each year. At that time they were planning on shipping 147,000 tons and the commissioner pointed out that the federal treasury would benefit to the extent of $3.5 million a year just from that one thing alone. We are now guaranteed in this agreement that we are going to have that shipment for ten years so there will be a return to the taxpayer in taxes from the
Canadian National Railways operation of this one mine of an amount of $40 million to $50 million. The hon. member for Laurier (Mr. Chevrier) and the hon. member for Bonavista-Twillingate tell us that there is going to be no return to the taxpayer. In addition to that, as I have pointed out, the railroad is guaranteed its operating and maintenance costs for a period of ten years. Surely, with that potential development of northwest Canada in mind it seems incredible to believe that any member in this house would rise in his place and under those conditions say that this railroad cannot operate at a profit.
I do not want to take up any more of the time of the house on this matter. The various views have been put forward. The hon. member for Peace River (Mr. Baldwin) and the Minister of Transport (Mr. Balcer) have answered everything that has been raised and some of the things that have been raised by the opposition are so incredible that it is hard to believe that anyone in this country would hold views of this kind any longer.


Harold Edward Winch: Mr. Speaker, I find myself in a peculiar, unique and difficult position, which is not unusual for a member of the House of Commons. This group voted for the principle of the legislation on the original resolution and second reading of the bill. Unfortunately, sir, we were not able to attend the committee meetings because we did not know of them. Yesterday in the committee of the whole I expressed certain misgivings because I felt that full information had not been given to the house. I want to say, Mr. Speaker, that not one of the questions I raised was answered. However, we now find that there is a motion before us which asks that the word "now" be left out and that the words "this day six months hence" be added at the end of the question. This, sir, is a guillotine amendment. There is no question about that at all. That is its effect even though the Liberals unanimously supported the resolution and the second reading of the bill.
As a member of this group and as one who is speaking on the amendment I want to say that I have not changed my mind whatsoever from what I said yesterday at the committee stage. The entire matter has been mishandled. Basically, perhaps indirectly, the C.P.R. is going to be the recipient of the advantages of the expenditure of the taxpayers' money. The major expenditure, which is this subsidy, is going to be on behalf of private enterprise and not the publicly owned Canadian National Railways. And yet, sir, this bill, whether we have criticism or not and whether we like certain features of it or not, is one that is going to benefit Canada and is one that we all looked forward to. We expect that, irrespective of other considerations this bill will

Canadian National Railways result in the development of the northern part of our country. Having made our whole position clear in voting on the principle of the bill, having raised our objection during the committee stage, I must say that, irrespective of criticisms, objection, understandings or misunderstandings, we in this group feel that the stand we are taking is in the interest of our country, We have sufficient hope and belief in our stand that we are prepared to support the bill and therefore cannot support the guillotine amendment which would kill the advancement of the development of the north. We will, therefore, oppose the amendment which is now being proposed.


John George Diefenbaker: I have not had the opportunity of being here throughout the entire debate. I have been here from time to time, however, and during the period when I have been here the particular section upon which questions were being asked was explained, and explained in detail, by the minister. However, as so often happens, regardless of the clarity of the explanation, the degree to which the opposition desires to oppose a measure is indicated by the fact that it invariably says, "well, we have not had an answer". This has been the course of the opposition on a number of measures.
I look back over the period when this particular railroad was under discussion. I remember well the election campaigns during which construction of the road was promised over and over again. At every election since 1926 the Liberal party has promised action but the same result was to be found in connection with this as we found in the province of Saskatchewan with that other development so frequently promised, the south Saskatchewan dam. These promises were conveniently forgotten after the election was over.
This is a most interesting situation now. If the hon. gentleman, the former minister of transport and subsequently the holder of a high position as chairman of the St. Lawrence seaway, had faced up to the situation and said, "I am opposed to this bill", we could have understood that.


Lionel Chevrier: We did not proceed in this manner with the seaway.


John George Diefenbaker: This is simply a subterfuge on the part of the opposition. What they are trying to do is to pretend that at the next session of parliament the views of today will have changed in the meantime and they will be able to give support to this measure. The hon. member for Laurier (Mr. Chevrier) moves a six months hoist. It has been mentioned that this, in fact, is the guillotine. Sir

Thomas Erskine May summarizes the situation at page 530 in these words:
The ordinary practice, in opposing the second reading of a bill, is to move an amendment to the question, by leaving out the word "now" and adding the words "upon this day six (or three) months".
As the case might be.
The amendment, "upon this day three months" is usually employed in a normal session-
And so on. Then, he goes on to say:
The acceptance by the house of such an amendment being tantamount to the rejection of the bill, if the session extends beyond the period of postponement, a bill... is not replaced upon the notice paper of the house.
That is what the opposition is doing, destroying the possibility of the building of this railway for the opening of the north. They are doing this by a subterranean course of pretense, pretending that at the continuance of this session, to use the words of the hon. gentleman, this matter "may be brought up again". This has been their attitude, as the hon. member for Vancouver-Kingsway (Mr. Browne) said so well, throughout the years. This has been the attitude of the party represented by hon. gentlemen opposite from the days of the Canadian Pacific. There were no assured markets then; the west was unopened. The Liberal party at that time referred to the railroad as two streaks of rust on a roadbed of false hopes. Another Liberal member said that the axle grease would never be paid for. If there had not been a Macdonald, there never would have been the opening of western Canada.
The same situation exists today. In 1957, this party promised it was going to launch a long delayed national development policy and a policy for the opening of the north. Anyone visiting the north today, and I invite the hon. member for Laurier to do that, will see the change.


Lionel Chevrier: I have been there several times.


John George Diefenbaker: Recently?-not since the developments have taken place. I also invite the itinerant member for Newfoundland to go up there and see the tremendous developments that have taken place during the last four years. Let them go into the Yukon or into the Mackenzie constituency and argue that there have been no developments, no opening of the north, and I should like to see the reception they receive.


Lionel Chevrier: No one is arguing that.


John George Diefenbaker: I am at the moment. As a matter of fact, in 1957 the Liberal party said, "if you give us a chance this time we will build the railway". Does the hon. gentleman remember that promise? In 1958,

Canadian National Railways
they said the same thing. A few months ago we were criticized for not having brought this bill before the house earlier. The Leader of the Opposition (Mr. Pearson) said in western Canada on his last tour, a tour d'horizon during which he was looking over the field, and it is a disheartening look he is having, that we were not proceeding.


Lionel Chevrier: The tour d'horizon I see now is not a vision.


John George Diefenbaker: If the hon. gentleman will maintain silence, I can proceed.
In looking over the field, what does he find? He complains that we have not proceeded with the Peace River route or with the Pine Point railway. While he is out there expressing himself, and I am sure being consistent and saying the same thing now as he did on his last visit, the acting leader of the Liberal party is in the house opposing the measure that his leader is advocating. Let there be no evasion of this fact. The motion means the defeat of the bill. I am looking forward to watching these hon. gentlemen vote at this time. Of course, they will have to support the amendment, and then on third reading the destruction of the bill. I am looking forward to that because it will be in keeping with their attitude toward development throughout the years. They give it vocal support; the objective is good, the purpose is admirable, but the vote is in the negative.
This is an example of what we have seen over and over again. This is one of the reasons the policy of opening the Northwest Territories to oil and mineral development, the roads to resources policy, all of those things advocated by this party when in opposition, have been implemented when we had the power to do so. This is one of the undertakings that we gave and I ask hon. members of the house to join with the government in advancing this policy of development. It covers every part of Canada. It covers British Columbia and the Columbia river if we can ever induce Premier Bennett to agree that the action we have taken is going to be beneficial. In the province of Alberta this railway is a step forward. In the province of Saskatchewan we have begun the south Saskatchewan dam. In the province of Manitoba we have the northern development of resources through the opening of areas that were never opened previously. In the mari-tdmes we also have had a policy of opening resources through roadways and highways. All these things are part of the policy of national development. This Pine Point railway is one of the integral promises that we made. We wish to put it into effect at the earliest possible moment.
As to what it will do, may I say this. Mention has been made by the Minister of Transport (Mr. Balcer) of the employment it will provide. It will provide freight service and passenger service to some 28,000 people living north of Grimshaw. It will provide service and savings to existing industry, such as commercial fishing on Great Slave lake and the Yellowknife gold mine. When I was in Yellowknife recently, the people there without regard to party considerations, pointed out that this was something they had been waiting for.
Once this railway is completed to Pine Point, it will make possible extensive development and, as the hon. member for Vancouver-Kingsway (Mr. Browne) said, vast changes in mineral development in the north, in areas which are potentially great but which as yet have not had the transportation facilities to permit the necessary developments that should take place. There will be the stimulation of agricultural expansion in some 6 million acres of arable land adjacent to the railway. There are 13 million acres of adjacent forest land. There will be stimulation to the development of these particular forest areas, stimulation to mineral exploration and also the provision of essential transportation in order to equalize opportunities in all parts of Canada.
The people up north who have opened up those areas in northern Alberta have, through the years, looked forward to the day when there would be this railway. I am sure they will also look with great interest at the fact that the opposition, while giving lip service to the necessity for this development, having criticized this government for not having proceeded with it earlier and now having the opportunity to vote in favour of it, decide by this measure of an amendment to destroy and kill legislation to which they have given vocal support for so many years.


John Whitney Pickersgill: Mr. Speaker, I had not really intended to speak on this amendment. I think the complaints we had to make were adequately made by my friend the hon. member for Laurier (Mr. Chevrier). I still think so. The Prime Minister (Mr. Diefenbaker), of course, has not paid much attention to the bill. However, that is not unusual. The Prime Minister has passion for avoiding detail that has not been excelled by any of his predecessors. The Prime Minister has opened up other fields that I think are too tempting for me to resist and I do not intend to try to do so. I can only hope that the Prime Minister's history-I refer to his early history of the 20's and 30's about which I do not profess to be as detailed an expert-is a little bit

Canadian National Railways more accurate than is his later history. I think I am familar with every promise that was made by the Liberal party in the elections of 1940, 1945, 1949, 1953 and 1957.


Gordon Minto Churchill: And none of them was carried out.


John Whitney Pickersgill: In all those elections I state without hesitation that the leader of the Liberal party whether it was Mr. King or Mr. St. Laurent never at any time promised to build this railway and never at any time promised to build the south Saskatchewan dam. As a matter of fact, not only did he not do that, the Prime Minister will recall that Mr. St. Laurent, during the course of one election, in Regina, at the armouries during the election campaign stated why he would not promise to build the south Saskatchewan dam.


John George Diefenbaker: I want to get that matter clear now.


John Whitney Pickersgill: Yes. The Prime Minister has a passion for history which is very entertaining. However, history, of course, has something to do with the facts and not simply what one would like the facts to be.


Mr. Graffiey:: It depends on who is writing them.


John Whitney Pickersgill: What Mr. Dunning may have said in 1929 and to which I think the hon. member for Peace River (Mr. Baldwin) made some reference is another matter. I was not with Mr. Dunning in 1929. As a matter of fact, in 1929, when Mr. Dunning must have visited that place, I was probably abroad completing my education. However, I know this. From the time the Prime Minister was elected to this House of Commons I know of no occasion when either Mr. King or Mr. St. Laurent ever promised to undertake either of these projects to which the Prime Minister has referred. I just point that out casually. It does not seem to me to be particularly relevant to the situation with which we are now faced. What is relevant to the situation with which we are now faced is whether or not this is a proper way in which to use $86 million more or less of the taxpayers' money.


An hon. Member:: Here we go again.


John Whitney Pickersgill: That is the important issue. The Prime Minister said that the amendment which had been moved by my hon. friend is a subterfuge. It is not a subterfuge at all. We do not argue for a moment- certainly I do not do so, and I do not think that my hon. friend meant to give any such impression-that if this motion is passed, this bill will not be killed, and killed it

should be because it is a bad bargain for the Canadian people as has been clearly shown by the answers given by the Minister of Transport (Mr. Balcer) to questions that have been put to him.
The Prime Minister said that the killing of this bill would destroy-


Mr. Horner (Acadia):: You will not be able to find a Liberal candidate for Peace River.


John Whitney Pickersgill: I am glad of that interruption for this reason. It enables me in one reply to deal with the whole speech of the hon. member for Vancouver-Kingsway. The tenor of the whole speech of the hon. member for Vancouver-Kingsway was that we should vote for this bill in the hope of electing Liberals in Alberta or Liberals in western Canada and not because on its merits, it was good for Canada. He said, "If you vote against this bill, good-bye to the chances of the Liberal party in western Canada." If this is just a great big scheme for buying votes, may I say that I do not think this is the way in which to defend it to serious minded people when you are spending other people's money. If the argument is sound that it may hurt Liberal candidates in one or two constituencies to vote against something that is not justified it will just have to hurt one or two Liberal candidates, as it is time that we had a few people in this House of Commons who considered the interests of the whole Canadian people and not merely their own immediate political future.


Mr. Jones:: You certainly would not be in a position to speak.


John Whitney Pickersgill: But of course the motion will not destroy the possibility of the railway at all. It will destroy this bill; but as the hon. member for Laurier has pointed out, there is going to be a new session of parliament soon-the Prime Minister has told us that-in December or January. There is nothing to prevent the government from bringing this bill back in a new session, although I hope they will not. Certainly there is nothing to prevent their bringing in another bill after finding some more customers for the railway and after making a better deal for the Canadian people.
That is why instead of just waiting for the third reading and voting against the bill we moved the six months hoist, to emphasize the point that nothing is going to be delayed. Everybody knows that this railway cannot be started, even by this government, before the survey is completed. We have been told that the survey will not be completed before the end of the year. Everybody knows that the contracts cannot be let on January 1 if the survey is completed on December 31.

Therefore there will not be one day's delay in providing employment if this bill stands over until next session and if the government proceeds expeditiously with a new bill in the next session. But between September and January there will be three or four months for the government to reconsider this matter and see whether not only with the parties to the agreement but with the other interested people they can make a better bargain, one that will protect the treasury and one that will give the taxpayers a reasonable break and a reasonable assurance that the people of Canada will get an adequate return on their investment.
The Prime Minister talked about the lack of vision of the Liberal party since the early days of the C.P.R., and I believe earlier in the debate the hon. member for Vancouver-Kingsway talked the same way. Of course, there were two sides to the early days of the C.P.R. There was another side to it that the Conservative party never boasts about. There were hand-outs on a huge scale to the promoters of the C.P.R. Here is what is happening now. Again it is the C.P.R., in the guise of Consolidated Mining and Smelting Company and the Pine Point mine that have to get a railway built for the transportation of these ores to the smelter; to get a railway built with the taxpayers' money, which money is not going to be recovered and on which no interest is going to be paid. That is what is involved here.
The Prime Minister talks about the opening of the north. Once more I think it is necessary to make a few corrections to the Prime Minister's historical perspective. The Prime Minister's conception of Canadian history seems to have jumped, as I said once before in the house, from June 6, 1891 to June 21, 1957. There is a big gap in between. It was a sort of jump from John to John. During that time nothing happened in this country. The fact of the matter-


John George Diefenbaker: "Igloo to igloo" was the slogan of the Liberal party.


John Whitney Pickersgill: The Prime Minister evidently does not like what I am saying because he is seeking to divert me.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I would just suggest to the Prime Minister that the quickest way to kill healthy northern development is to go into schemes that will turn out not to be well founded. Sixty six million dollars or $86 million is still, as I said earlier, a tremendous amount to pay out of the treasury of Canada with no provision for interest on that money and no provision for the return of the capital.
Canadian National Railways
I am not saying it would not be justified in
certain circumstances, but it is still-


An hon. Member:: You have said all this before.


John Whitney Pickersgill: Bearing in mind our resources, it is a tremendous sum. We have a duty here to be absolutely sure that when we are dealing with sums like that we are dealing with them in the best possible way. That is the point, and that is the only point we have been making throughout.
If in fact the traffic that the Minister of Transport told us just after lunch would be required to make this a self liquidating project-not self liquidating to the treasury but self liquidating to the whole economy-of about 800,000 tons of concentrates, or their equivalent, is going to be forthcoming, and if the government can show that will be forthcoming or that there is a very good prospect of it, nobody would vote for this bill with greater enthusiasm than I. But if this is going to turn out to be a flop-as railways built for development in Canada in the past have turned out to be flops; unfortunately all too many of them-this is just going to be another big drain on the treasury of Canada. It is going to hold back real development and set back those things which ought to be done.
The Prime Minister made a good deal of criticism of the Leader of the Opposition who said that this bill should have been brought in earlier. I echo that criticism. The hon. member for Laurier has made that criticism half a dozen times. I think it is a shocking thing that on the 172nd day of the session, when this railway was referred to on the first day in the speech from the throne, we have only at last got around to considering this tremendous project at a time when we are under unusual pressure to terminate the session.


John George Diefenbaker: No.


Gordon Minto Churchill: It is your choice.


John Whitney Pickersgill: The Minister of Veterans Affairs (Mr. Churchill) says it is our choice. It is not our choice. Our choice would have been to have this bill earlier so we would have had time to consider it adequately. Our choice would have been to have the agreement as early even as September 7. We were denied that. Those were our choices. It was not our choice, it was the government's choice, to hold the bill back to the very last moment. I think when we see what kind of bill it is we understand why the government made that kind of choice. They hoped they could get this bill through with a minimum of
8930	HOUSE OF
Canadian National Railways publicity outside Alberta and the rest of Canada would not know too much about it-


Some hon. Members:: Oh, oh.


Mr, Pickersgill:: -so they could exploit it politically to the maximum out there. There is another thing, of course, about this bill that really demolishes completely the argument of the Minister of Transport that delaying this bill is going to hurt employment. Not one sou can be spent under this bill, as the minister told us-


Mr. Palleil:: What is a sou?


John Whitney Pickersgill: It is just the French word for "cent". I say not one sou can be spent under this bill, as the minister told us. There has to be an appropriation. We are not going to have any more appropriations during this session, so the government cannot spend any money in any event. It cannot start this railway in any event until it has brought down the estimates in the next session, so any misleading argument that to delay this bill now will delay the work is destroyed, of course, by the frank statement made by the Minister of Transport.
The Prime Minister also said this project was part of a program for the development of the north which began in 1957. Of course, the development of the north did not begin in 1957. The development of the north began long, long ago in the days of the first prime minister of Canada.


An hon. Member:: This sounds like a fairy story.


John Whitney Pickersgill: I venture to say there has
been no period in which greater progress was made in the development of the north than the nine years when my right hon. friend Mr. St. Laurent was prime minister of Canada. Every project of any consequence which the present government has carried out in the north was already on the drawing boards in June, 1957.


John George Diefenbaker: In invisible ink? Was it on the drawing boards in invisible ink?


John Whitney Pickersgill: No, it was not. That is shown by the fact that the biggest argument in favour of this railway, and the one the minister falls back on every time he is pressed, is the evidence given by Mr. Robertson before the Gordon commission. When was that evidence given? It was given under the previous administration. Anybody familiar with the real history of these things is aware that not only were there many blueprints but that many of the projects had been started.


An hon. Member:: Igloos.


John Whitney Pickersgill: Well, the new Aklavik was started by the previous government. Most of


the roads were started by them. The new school program was started. I must say that the present government is to be commended for carrying on these programs. I have never complained about that. But the way in which they denature history in the way they have consistently done is another example of the fact that between June, 1891 and June, 1957, in the Prime Minister's book nothing happened in this country.
In the days when Mr. St. Laurent was Prime Minister it was not only the north which was being developed. There never was at any period in the history of this country so much capital development, both public and private, as there was in the years from 1947 to 1957, and the statistics which have been repeatedly brought before this house by the present government-reluctantly, I admit- go to show it. The evidence which was given in the other place before their committee on manpower and a great deal of other statistical evidence indicates very clearly that this progress stopped in the year 1958. It simply stopped.
Now the Prime Minister talks about the north as though Alberta were the only part of the north. It is not, you know. There is also a north which was developed right after the war by private enterprise in Labrador. Here was a company which paid for its own railway; it did not get it paid for by the taxpayer. I say we have to look at a question of this kind in broad prospective. We have to ask ourselves: if we are going to spend this amount of money out of the treasury without getting it back, without any service charge, is this the best place to do it? I say that the government has not yet made that case.
I do not know whether I should refer to this or not, and I do not know how my reference to it will be received by the house. However, I think most of us think the late Mr. C. D. Howe did have something to do with the development of this country and that he did have a good capacity to appraise a proposition and decide whether it was a good thing or not. I remember speaking to him a year or two ago-perhaps it was two or three years ago; it was since I have been in opposition-precisely on the subject of this Pine Point railway. The observation he made to me at that time was this: This railway, or some other means of transport if technology moves fast enough, must be provided, because that mine is a very good mine and there is no doubt it will be exploited sooner or later. Perhaps it will not be too long before it is exploited. But it is a very valuable property, and when it becomes really exploitable, the people who own it will

not hesitate to exploit it. That, after all, is something we have to take into account.
This mine will not be lost if this railway is not built immediately. I noticed the other day that Dr. Solandt, one of the vice presidents of the C.N.R., said that what the railways most needed was research-basic research, not merely research into accounting and that sort of thing. It may very well be we shall see technological developments which will make it possible to provide transport very much cheaper than the present arrangements contemplate. This would be in the interests of everyone. It seems to me no one can say that because we are insisting that this should be a good project and a good bargain for the Canadian people before it is allowed to proceed, that this means we are against national development. When I say no one can say it, I know it will be said. It is probably being said already. But I suggest, without regard to what will be said about these things, that when the facts are such as they are in this case we must assure ourselves that this is the best use which can be made of these funds in the interests of all the Canadian people in the year 1962-I mention that year because this money certainly cannot be spent in 1961-and from then on. It is true that there is in contemplation the construction of 400 miles of line through a very rich part of the country which undoubtedly has a great future. But even the Minister of Finance is slowly beginning to discover that the resources which can be extracted from the taxpayers of Canada are limited. For this reason I have no hesitation whatever in standing up and being counted in opposition, not to the principle of the railway-after all, who would be opposed to it-but to this particular way of doing things.
I remember when I was a small boy living in the bush in northern Manitoba. We had on the wall of our dining room a map of Manitoba. The Hudson's Bay Railway was indicated by a dotted line and there was another dotted line running north from the Gypsumville line to connect with the Hudson's Bay Railway. I remember thinking that some day that railway would be built and the main route to Europe would be through Winnipeg right past our door to the Hudson's Bay Railway. That railway has not been built yet. We are all a little sentimental about these things and I confess that if there is $66 million in the treasury to spend on a railway I would rather see that railway built than one in Northern Alberta. That is just a personal preference, but I would not expect these things to be decided on the basis of personal preference. I would expect us to weigh the merits of the two and then decide
Canadian National Railways which would be best in the national interest. And let no one say that a railway through northern Manitoba such as I have described would not open up a lot of valuable territory. It would reduce very considerably the distance over which the International Nickel Company would have to ship their concentrates. There is a lot of pulpwood in that country, a great new electrical development going on at the Grand Rapids. However, we are not asking the taxpayers to build that railway in northern Manitoba. We are asking them to build one in northern Alberta. Either would contribute to northern development. So would a railway to Hamilton Falls in Labrador, and to Goose Bay. There is no question but that there are tremendous potential resources in Labrador. But would the taxpayers of Canada, without some reasonable assurance that within a reasonable time those potentialities were going to become actual, be justified in doing that? I think we have to apply the same yardstick to all these proposals. Let us, of course, believe in our country, but do not let us do things which will turn out to be bad bargains and discourage people in the future from believing in this country, which certainly is not going to be destroyed if we take a second look at this proposition and come back here next year with a better one.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I had not intended to participate in this debate but I cannot leave unchallenged some of the statements made by the hon. member for Bonavista-Twillingate (Mr. Pickersgill). The hon. gentleman has said that we should be very careful about proceeding with the bill because ill founded schemes could very well set back northern development. I live in the north, Mr. Speaker, and I have travelled across the Canadian north. In my view nothing has so set back northern development as did the 22 years of Liberal rule when a complete void and vacuum existed with respect to the development of the north. The hon. gentleman spoke of ill founded schemes. We could point to schemes that have been inordinately costly and that are a continuing drain on the taxpayers who live in the north. One project immediately comes to mind, the Whitehorse sewer and water system constructed during the Liberal administration at a cost of millions of dollars for a city of 20,000 people at a stage of development when there were only 2,500 people there. Is this the kind of scheme the hon. gentleman speaks of when he refers to ill founded schemes?
The hon. gentleman said the construction of the railway at this time might set back the undertaking of important projects that should be undertaken in the north. The party of

Canadian National Railways which the hon. gentleman is a member should have thought oi many projects that should have been undertaken in the north while they were in power, but they did not. I wonder, as must a great many hon. members of this house, whether these great plans for northern Canada, of which the Liberals now speak, were kept for 22 years in the same cupboard as their great shelf of public works which was supposed to be there when we took office in 1957? The cupboard was bare, these great plans are empty dreams and the words of hon. gentlemen opposite echo hollowly when they seek to claim credit for undertaking projects in the north.
The hon. member for Laurier (Mr. Che-vrier) said he had been in the north several times. I have never seen the hon. gentleman in the north. Since I have lived there I have seen only one Liberal minister of northern affairs and national resources in the north, Mr. Lesage, who visited in 1953. I have never seen the hon. member for Bonavista-Twil-lingate in the north.


An hon. Member:: You were fortunate.


Erik Nielsen: Perhaps this is the explanation for the apparent and appalling ignorance of the hon. gentleman when he begins describing things that are happening in the north about which he has no knowledge. He does not know about them because he has not been there. I know that in the last three years more projects have been brought to completion in the north than were brought to completion in the previous decade, the reason being that this government implemented them, took action.
I also know of many projects that were turned down by the previous administration. One example is the road to the oil fields in Eagle Plains. The former government was asked by private industry to assist in the building of a trail to this area to the extent of contributing $300,000, but hon. gentlemen said they would not give a single nickel to assist in the development of this potentially rich area. They would not admit the possibility that reserves might be there. The same attitude is apparent with regard to this railway. This is yet another example of the waffling in which hon. members of the opposition have been engaging during even the short time I have been sitting here. Their leader has condemned the national development program of this government, and the policy designed to bring about northern development. The Leader of the Opposition (Mr. Pearson) and I had an exchange a few months ago during which I tried to have the hon. member retract his "igloo to igloo" statement, the position he took with respect to communications in the northern part of

this country. He would not do so on that occasion nor has he done so since. The reason is apparent. Hon. gentlemen opposite simply do not believe in the riches the north country has to contribute to the over-all development of Canada.
Hon. gentlemen opposite have lauded Mr. St. Laurent as the great northern developer. Not one single project of any size or importance was undertaken in the Yukon territory by the government of Mr. St. Laurent. We asked for roads and projects of all kinds but all were cast aside and rejected. Why? The hon. member for Bona-vista-Twillingate speaks about projects for vote catching. I suspect the reason that the Liberals rejected the northern projects for the development of the nation as a whole is that there were more votes to be caught in some of the other provinces that are more heavily populated. The remarks of the hon. member for Bonavista-Twillingate are absolutely false and I give the lie to them. I do not ascribe to the hon. gentleman any motive in his saying these things. I believe he says them out of ignorance. The hon. gentleman has never been in the north and does not know what is going on.


Mr. Speaker:: I declare the amendment lost. It being five o'clock-


Gordon Minto Churchill: I wonder, if there is to be another vote, if we could proceed with that without the ringing of the bells and then proceed with the private members' hour?


Lionel Chevrier: There is certainly no objection to that.


Mr. Speaker:: The house gives unanimous consent to proceed to the next order and defer private members' hour until it is disposed of?


Some hon. Members:: Agreed.


Mr. Speaker:: The question is on the main motion. Is the house ready for the question? Those in favour will please say yea.
Division


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And more than five members having risen:


Mr. Speaker:: Call in the members. Is it agreed that the members are in?


Some hon. Members:: Agreed.


Mr. Speaker:: It being five o'clock the house will now proceed to the consideration of private and public bills, the former having precedence pursuant to standing order 15.



PRIVATE BILLS

Mr. Speaker:: As there are a number of private bills that were ordered for consideration in the committee of the whole this day is it agreed that, in accordance with section 1 of standing order 54, they be referred to the committee in one motion?


Some hon. Members:: Agreed.



JEAN GEORGE LIPSMAN

[Stage Direction]
The house in committee on Bill No. SD-1, for the relief of Jean George Lipsman, Mr. Chown in the chair.
On clause 1-Marriage dissolved.
Gordon Campbell Chown: Shall clause 1 carry?


Frank Howard: Before it carries, Mr. Chairman, I should like to point out that in the miscellaneous private bills committee the various bills which are now before us were given consideration by the committee to the extent of allowing three tenths of one second of time for each particular bill. That is an indication of the consideration that was given in the committee and the progress that was made.
If I may, I should just like to take this opportunity, for a second or two, to congratulate

the hon. member for Marquette who is vicechairman of the committee on the efficient and capable manner in which he handled the committee's proceedings this morning and on the justness with which he pursued his particular task. Inasmuch as he is only vice-chairman of the particular committee may I say this. If we are going to continue to consider these things in that committee, he may be slated for higher things in that committee.


Mr. Mandziuk:: Mr. Chairman, I thank the hon. member for his kind words. With reference to the length of time allotted to each separate bill, I might put on the record the fact that it is the practice of the committee- or at least it has been the practice when I have been on it-that those bills which are uncontested are considered en bloc after the committee receives from the chairman or the vice-chairman an undertaking that they have been checked, read over and studied and that no objection was found.


[Stage Direction]
Clause agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.

[Stage Direction]
Bill SD-2, for the relief of Margaret Terese MacDonald Tombs.-Mr. McCleave.
Bill SD-3, for the relief of Esther Miller Finkelstein.-Mr. McCleave.
Bill SD-4, for the relief of Matilda Aboud Henrig, otherwise known as Matilda Aboud Levac.-Mr. McCleave.
Bill SD-5, for the relief of Charles Malcolm Macdonald.-Mr. McCleave.
Bill SD-6, for the relief of Georgette Ginette Richardot Marica.-Mr. McCleave.
Bill SD-7, for the relief of Roland Labelle.- Mr. McCleave.
Bill SD-8, for the relief of Robert Clair Alger.-Mr. McCleave.
Bill SD-9, for the relief of Susanne Louise Eismann Weinfield.-Mr. McCleave.
Bill SD-10, for the relief of Florida McIntyre Marcil.-Mr. McCleave.
Bill SD-11, for the relief of Muriel Frances Marion Simpson Anfossi.-Mr. McCleave.
BiR SD-12, for the relief of Norma Catherine Shearly McMullan.-Mr. McCleave.
Bill SD-13, for the relief of Violanda Fuoco Delage.-Mr. McCleave.
Bill SD-14, for the relief of Leonda Suzanne Winston Gold.-Mr. McCleave.
Bill SD-15, for the relief of Georgette
Claudy Bercier Brabant.-Mr. McCleave.

Bill SD-16, for the relief of Anneliese
Bauer Kreuzer.-Mr. McCleave.
Bill SD-17, for the relief of Beulah May-belle Purcell Stewart.-Mr. McCleave.
Bill SD-18, for the relief of Diana Fraid Gross.-Mr. McCleave.
Bill SD-19, for the relief of Nancy Anne Gray Levesque.-Mr. McCleave.
Bill SD-20, for the relief of Agnes Larkin McBride.-Mr. McCleave.
Bill SD-21, for the relief of Sheila Rose Hutchison Dendy.-Mr. McCleave.
Bill SD-22, for the relief of Clara Melamed Schultz.-Mr. McCleave.
Bill SD-23, for the relief of Josephine Badaha Amyoony Marchadier.-Mr. McCleave.
Bill SD-24, for the relief of Bella Grafstein Weintraub.-Mr. McCleave.
Bill SD-25, for the relief of William John Earner, junior.-Mr. McCleave.
Bill SD-26, for the relief of Doreen Mary Swain Mather.-Mr. McCleave.
Bill SD-27, for the relief of Dorothy Grace Brown Vallieres.-Mr. McCleave.
Bill SD-28, for the relief of Nellie Frances Drake.-Mr. McCleave.
Bill SD-29, for the relief of Louis Frut-tero.-Mr. McCleave.
Bill SD-30, for the relief of Fritz Flun-kert.-Mr. McCleave.
Bill SD-31, for the relief of Claude Thibault.-Mr. McCleave.
Bill SD-32, for the relief of Remmechiena Elsiena Jonker.-Mr. McCleave.
Bill SD-33, for the relief of Mary Billias.- Mr. McCleave.
Bill SD-34, for the relief of Helene Lempp. -Mr. McCleave.
Bill SD-35, for the relief of Jean Elizabeth Geraldine Vimbor.-Mr. McCleave.
Bill SD-36, for the relief of Hela Hinda Fachler.-Mr. McCleave.
Bill SD-37, for the relief of Norma Skolar. -Mr. McCleave.
Bill SD-38, for the relief of Jack Warran Jones.-Mr. McCleave.
Bill SD-39, for the relief of Phyllis Marjorie Bradley.-Mr. McCleave.
Bill SD-40, for the relief of Barbara Phyllis Barnes.-Mr. McCleave.
Bill SD-41, for the relief of Clifford Harvey Stevens.-Mr. McCleave.
Bill SD-42, for the relief of Nicolas Denis Lazanis.-Mr. McCleave.
Bill SD-43, for the relief of Hedwig Anna
Kiss.-Mr. McCleave.
Divorce Bills
Bill SD-44, for the relief of Mildred Linda Sexton.-Mr. McCleave.
Bill SD-45, for the relief of Hugh Donald McKean.-Mr. McCleave.
Bill SD-46, for the relief of Catherine Louise Puddicombe.-Mr. McCleave.
Bill SD-47, for the relief of Eunice Beverley Donaldson.-Mr. McCleave.
Bill SD-48, for the relief of Florrie Naomi Wise.-Mr. McCleave.
Bill SD-49, for the relief of Leslie Alfred Wheable.-Mr. McCleave.
Bill SD-50, for the relief of Roslyn Reisler. -Mr. McCleave.
Bill SD-51, for the relief of Viola Saykaly. -Mr. McCleave.
Bill SD-52, for the relief of Barbara Rose Isenberg.-Mr. McCleave.
Bill SD-53, for the relief of Thelma Rosemary Picher.-Mr. McCleave.
Bill SD-55, for the relief of Rita Joubert.- Mr. McCleave.
Bill SD-56, for the relief of Evelyn Ann Joy.-Mr. McCleave.
Bill SD-57, for the relief of Wendy Grace McCullough.-Mr. McCleave.
Bill SD-58, for the relief of John Dyall.- Mr. McCleave.
Bill SD-59, for the relief of Anna Marie Cholette.-Mr. McCleave.
Bill SD-60, for the relief of Richard Lome Moat.-Mr. McCleave.
Bill SD-61, for the relief of Juliana Green. -Mr. McCleave.
Bill SD-62, for the relief of Marie Vero-nique Elmire Bugeaud.-Mr. McCleave.
Bill SD-63, for the relief of Victor Robert Selvin Rafuse.-Mr. McCleave.
Bill SD-64, for the relief of Francis John Turner.-Mr. McCleave.
Bill SD-65, for the relief of Mary Berler.- Mr. McCleave.
Bill SD-66, for the relief of Ruth Anna Becker.-Mr. McCleave.
Bill SD-67, for the relief of Annunziata Collin.-Mr. McCleave.
Bill SD-68, for the relief of Sophie Greu-zinger Abelius.-Mr. McCleave.
Bill SD-69, for the relief of Joan Miller.- Mr. McCleave.
Bill SD-70, for the relief of Marie Anne Si-gouin.-Mr. McCleave.
Bill SD-71, for the relief of Jean Paul Dus-sault.-Mr. McCleave.
Bill SD-72, for the relief of Aleksander
(Olexa or Oleksa) Chomenko.-Mr. Mc-
Cleave.
[Stage Direction]
Divorce Bills
Bill SD-73, lor the relief of Robert Whitla Ross.-Mr. McCleave.
Bill SD-74, for the relief of Margherita Di Paolo.-Mr. McCleave.
Bill SD-75, for the relief of Pauline Lew-kowict.-Mr. McCleave.
Bill SD-76, for the relief of Marie Louise Aline Ross.-Mr. McCleave.
Bill SD-77, for the relief of Gisela Lydia Elisabeth Hunnius.-Mr. McCleave.
Bill SD-78, for the relief of Dorothy Gertrude Payment.-Mr. McCleave.
Bill SD-79, for the relief of Pierrette De Vynck.-Mr. McCleave.
Bill SD-80, for the relief of Dorothy Joan Kovacs.-Mr. McCleave.
Bill SD-81, for the relief of John Vere-shack.-Mr. McCleave.
Bill SD-82, for the relief of Eloi Vincent.- Mr. McCleave.
Bill SD-83, for the relief of Frederick William Steppings.-Mr. McCleave.
Bill SD-84, for the relief of Dawn Carolyn Kronen.-Mr. McCleave.
Bill SD-85, for the relief of Maria Udiko Leitner.-Mr. McCleave.
Bill SD-86, for the relief of Nora Vida Dobie.-Mr. McCleave.
Bill SD-87, for the relief of Janina Keller. -Mr. McCleave.
Bill SD-88, for the relief of Gordon Angus Moore.-Mr. McCleave.
Bill SD-89, for the relief of Maurice Robert. -Mr. McCleave.
Bill SD-90, for the relief of Johann Kinzl.- Mr. McCleave.
Bill SD-91, for the relief of Elizabeth Robb Lilley.-Mr. McCleave.
Bill SD-92, for the relief of Marguerite Ar-chambault.-Mr. McCleave.
Bill SD-93, for the relief of Nancy Viola Doolittle.-Mr. McCleave.
Bill SD-94, for the relief of Elsie Margaret Turnau.-Mr. McCleave.
Bill SD-95, for the relief of Ruth Man-haim.-Mr. McCleave.
Bill SD-96, for the relief of Micheline Maud Huguette Deutschenschmied.-Mr. McCleave.
Bill SD-97, for the relief of Edith Martha Ami..-Mr. McCleave.
Bill SD-98, for the relief of Christa Kru-semer.-Mr. McCleave.
Bill SD-99, for the relief of John Dennis Grubb.-Mr. McCleave.
Bill SD-100, for the relief of Frank (Franz)
Ziegler.-Mr. McCleave.

Bill SD-102, for the relief of Amblena Eva Margaret Mary Brouse.-Mr. McCleave.
Bill SD-103, for the relief of Marion Pelletier.-Mr. McCleave.
Bill SD-104, for the relief of Catherine Lorraine Berthe Unity Miller.-Mr. McCleave.
Bill SD-105, for the relief of Pierre Blag-don.-Mr. McCleave.
Bill SD-106, for the relief of Helen Rita Freestone.-Mr. McCleave.
Bill SD-108, for the relief of Mary Ann Elizabeth Datko.-Mr. McCleave.
Bill SD-109, for the relief of Frances Jane Ball.-Mr. McCleave.
Bill SD-110, for the relief of Annie Beatrice Fordham.-Mr. McCleave.
Bill SD-111, for the relief of June Catherine Volkart.-Mr. McCleave.
Bill SD-112, for the relief of Edith Ruth Gurd.-Mr. McCleave.
Bill SD-113, for the relief of Marie Lea Gertrude Constantinides.-Mr. McCleave.
Bill SD-114, for the relief of Vera May Kirkpatrick.-Mr. McCleave.
Bill SD-115, for the relief of Kathleen Isabel Argue.-Mr. McCleave.
Bill SD-116, for the relief of Florence Parks. -Mr. McCleave.
Bill SD-117, for the relief of Elaine Linda Goldberg.-Mr. McCleave.
Bill SD-118, for the relief of Mary Helen Cormier.-Mr. McCleave.
Bill SD-119, for the relief of Margaret Evelyn Grierson.-Mr. McCleave.
Bill SD-120, for the relief of Madeleine St. Arnaud.-Mr. McCleave.
Bill SD-121, for the relief of Ronald Clarence Breen.-Mr. McCleave.
Bill SD-122, for the relief of Sally Falovitch. -Mr. McCleave.
Bill SD-123, for the relief of Frederick John Downey.-Mr. McCleave.
Bill SD-124, for the relief of Shirley Mae Clarke.-Mr. McCleave.
Bill SD-125, for the relief of Jadwiga Nowak.-Mr. McCleave.
Bill SD-126, for the relief of Robert Fender. -Mr. McCleave.
Bill SD-127, for the relief of Joseph George Marcel Raymond Mady,-Mr. McCleave.
Bill SD-128, for the relief of Reuben Gerald Sheaves.-Mr. McCleave.
Bill SD-129, for the relief of Jean Paul Bourgue.-Mr. McCleave.
Bill SD-130, for the relief of Theresa Catalfamo.-Mr. McCleave.

Bill SD-131, for the relief of Charles Woods. -Mr. McCleave.
Bill SD-132, for the relief of Joan Winni-fred Chrystal.-Mr. McCleave.
Bill SD-133, for the relief of Dorothy Darling.-Mr. McCleave.
Bill SD-134, for the relief of Lilia Margit Irenne Fekete.-Mr. McCleave.
Bill SD-135, for the relief of Elisabeth Franziska Chamulka.-Mr. McCleave.
Bill SD-136, for the relief of Evelyn Patricia Hunter.-Mr. McCleave.
Bill SD-137, for the relief of Walter Mason. -Mr. McCleave.
Bill SD-138, for the relief of Anthony John Tunstall.-Mr. McCleave.
Bill SD-140, for the relief of Howard Fern-con Olsen.-Mr. McCleave.
Bill SD-141, for the relief of Theresa Irene Godfrey.-Mr. McCleave.
Bill SD-142, for the relief of Geraldine Bousquet.-Mr. McCleave.
Bill SD-143, for the relief of Bernice Clara Judd.-Mr. McCleave.
Bill SD-144, for the relief of Geraldine Koch.-Mr. McCleave.
Bill SD-145, for the relief of Joyce Mary Walker.-Mr. McCleave.
Bill SD-146, for the relief of Jeanne Ouellette.-Mr. McCleave.
Bill SD-147, for the relief of Patricia Helen Gagnon.-Mr. McCleave.
Bill SD-148, for the relief of Thelma Beatrice Davis.-Mr. McCleave.
Bill SD-149, for the relief of Lydia Inge-borg Pachurka.-Mr. McCleave.
Bill SD-150, for the relief of Ourania Timo-theatos, otherwise known as Orania Timothea-tos.-Mr. McCleave.
Bill SD-151, for the relief of James Christopher Younger Elliott.-Mr. McCleave.
Bill SD-152, for the relief of Bernice Catherine Bealy.-Mr. McCleave.
Bill SD-153, for the relief of Helene Marti-neau.-Mr. McCleave.
Bill SD-154, for the relief of Yvette Cecile Millar.-Mr. McCleave.
Bill SD-155, for the relief of Mary Evangeline Jackson.-Mr. McCleave.
Bill SD-156, for the relief of Andrew Drummond Page.-Mr. McCleave.
Bill SD-157, for the relief of Katie Pollack. -Mr. McCleave.
Bill SD-158, for the relief of Shelagh (Sheila) Harriet Jacqueline Smith.-Mr. McCleave.
Bill SD-159, for the relief of Roy Charles
Melvin.-Mr. McCleave.
Divorce Bills
Bill SD-160, for the relief of Shirley Margaret Ball.-Mr. McCleave.
Bill SD-161, for the relief of Irene Ruth Farber.-Mr. McCleave.
Bill SD-162, for the relief of Margaret Edith Myrtle Latour.-Mr. McCleave.
Bill SD-163, for the relief of Charles Georges Andre Perrin.-Mr. McCleave.
Bill SD-164, for the relief of Norma Helen Hall.-Mr. McCleave.
Bill SD-165, for the relief of Evelyn Byrd Taylor.-Mr. McCleave.
Bill SD-166, for the relief of Eileen Mary Grant.-Mr. McCleave.
Bill SD-167, for the relief of Shirley Levitt. -Mr. McCleave.
Bill SD-168, for the relief of Judith Patricia Hogwood.-Mr. McCleave.
Bill SD-169, for the relief of Rose Linden.- Mr. McCleave.
Bill SD-170, for the relief of William Gibb Barnard.-Mr. McCleave.
Bill SD-171, for the relief of Joseph Ar-mand De Bellefeuille.-Mr. McCleave.
Bill SD-172, for the relief of Bernard Cam-peau.-Mr. McCleave.
Bill SD-173, for the relief of Derrick Walsh. -Mr. McCleave.
Bill SD-174, for the relief of Genevieve Bollen.-Mr. McCleave.
Bill SD-175, for the relief of Joseph Palma Lucien Boucher.-Mr. McCleave.
Bill SD-176, for the relief of Joseph Arthur Roger Courtois.-Mr. McCleave.
Bill SD-177, for the relief of Catherine Dale Porter.-Mr. McCleave.
Bill SD-178, for the relief of Betty Jean Maurice-Jones.-Mr. McCleave.
Bill SD-179, for the relief of Margaret Nancy Bishop.-Mr. McCleave.
Bill SD-180, for the relief of Thelma Annie McKenna.-Mr. McCleave.
Bill SD-181, for the relief of Florence Mary Gibson.

Mr. McCleave.
Bill SD-182, for the relief of James Valiant Hatch.-Mr. McCleave.
Bill SD-183, for the relief of Sofia Kleiza.- Mr. McCleave.
Bill SD-184, for the relief of Elizabeth Ziehm.

Mr. McCleave.
Bill SD-185, for the relief of Mary Win-nifred Paiement.

Mr. McCleave.
Bill SD-186, for the relief of Dorothy Irene Payette.-Mr. McCleave.
Bill SD-187, for the relief of Nancy Carol
Stead.-Mr. McCleave.
[Stage Direction]
Divorce Bills
Bill SD-188, for the relief of Leo Thivierge.-Mr. McCleave.
Bill SD-189, for the relief of Lola Polka.-[DOT] Mr. McCleave.
Bill SD-190, for the relief of Stella Liberman, otherwise known as Stella Silverman.- Mr. McCleave.
Bill SD-191, for the relief of Patricia Cotton.-Mr. McCleave.
Bill SD-192, for the relief of Verna Wilson Ellis.-Mr. McCleave.
Bill SD-193, for the relief of Mary Freda Doutre.-Mr. McCleave.
Bill SD-194, for the relief of Wilhelm Antoni.-Mr. McCleave.
Bill SD-195, for the relief of Lilian Eleanor Hartglas.-Mr. McCleave.
Bill SD-196, for the relief of Kathleen Gordon.-Mr. McCleave.
Bill SD-197, for the relief of Roslyn Isaacs.-Mr. McCleave.
Bill SD-198, for the relief of Claire Gray.- Mr. McCleave.
Bill SD-199, for the relief of Olga Megas.- Mr. McCleave.
Bill SD-200, for the relief of Frances Bourassa.-Mr. McCleave.
Bill SD-201, for the relief of Janet Ellen Nelley.-Mr. McCleave.
Bill SD-202, for the relief of Helen Mary Mailath.-Mr. McCleave.
Bill SD-203, for the relief of Helen Mary Vol.-Mr. McCleave.
Bill SD-204, for the relief of Douglas Yet-man.-Mr. McCleave.
Bill SD-205, for the relief of Martha Klein.-Mr. McCleave.
Bill SD-206, for the relief of Thelma Joy Tapp.-Mr. McCleave.
Bill SD-207, for the relief of Marie Therese Beaudry.-Mr. McCleave.
Bill SD-208, for the relief of Leon Schwert-finger.-Mr. McCleave.
Bill SD-209, for the relief of Dorothy Golden___Mr. McCleave.
Bill SD-210, for the relief of Brenda Ruth Black.-Mr. McCleave.
Bill SD-211, for the relief of Agnes May Hurst.-Mr. McCleave.
Bill SD-212, for the relief of Stanley Sager.-Mr. McCleave.
Bill SD-213, for the relief of Rae Price.- Mr. McCleave.
Bill SD-214, for the relief of Margaret Bloom.-Mr. McCleave.
Bill SD-215, for the relief of Beena Barbara
Koch.-Mr. McCleave.

Bill SD-216, for the relief of Paciflque Raymond Jean Ghislain Van Gulick.-Mr. McCleave.
Bill SD-217, for the relief of Theresa Bernadette Rose.-Mr. McCleave.
Bill SD-218, for the relief of Ila Rothman.- Mr. McCleave.
Bill SD-219, for the relief of Marcel Paquet.-Mr. McCleave.
Bill SD-220, for the relief of Ada Florence Roberts.-Mr. McCleave.
Bill SD-221, for the relief of Hannah Dorothy Erlich.-Mr. McCleave.
Bill SD-222, for the relief of Teresa Mary Seguin.-Mr. McCleave.
Bill SD-223, for the relief of Mary Stella Williams.-Mr. McCleave.
Bill SD-224, for the relief of Kathleen Louisa Harrison.-Mr. McCleave.
Bill SD-225, for the relief of Ilona Helen Adler.-Mr. McCleave.
Bill SD-226, for the relief of Lillian Chalfen.-Mr. McCleave.
Bill SD-227, for the relief of Dolores Norma Auclair.-Mr. McCleave.
Bill SD-228, for the relief of Patricia Lillian Mary Walker.-Mr. McCleave.
Bill SD-229, for the relief of Milan Yan-kovic.-Mr. McCleave.
Bill SD-230, for the relief of Norma Eileen Hicks.-Mr. McCleave.
Bill SD-231, for the relief of Edith Erlick.- Mr. McCleave.
Bill SD-232, for the relief of Sidney Russell Drake.-Mr. McCleave.
Bill SD-233, for the relief of Grace Evelyn Lewis.-Mr. McCleave.
Bill SD-234, for the relief of Ursula Edith Elise Morgan.-Mr. McCleave.
Bill SD-235, for the relief of Marie Marguerite Jeannette Enlow.-Mr. McCleave.
Bill SD-236, for the relief of Barbara Lois Golden.-Mr. McCleave.
Bill SD-237, for the relief of Eva Maria Muller.-Mr. McCleave.
Bill SD-238, for the relief of Neil Marriott Compton.-Mr. McCleave.
Bill SD-239, for the relief of Carol Marilyn Margot Norcott.-Mr. McCleave.
Bill SD-240, for the relief of Eileen Alice Rose.-Mr. McCleave.
Bill SD-241, for the relief of Mable Irene Collin-Mr. McCleave.
Bill SD-242, for the relief of Johan Hendrick Van Hattem.-Mr. McCleave.
Bill SD-243, for the relief of Rhoda Heitner.
-Mr. McCleave.

Bill SD-244, lor the relief of Normand Guy. -Mr. McCleave.
Bill SD-245, for the relief of Elizabeth Mc-Innis.-Mr. McCleave.
Bin SD-246, for the relief of Carl Wilhelm Larson.-Mr. McCleave.
Bill SD-247, for the relief of Timothy Garfield Pilon.-Mr. McCleave.
Bill SD-248, for the relief of Mary Theressa Oliver.-Mr. McCleave.
Bill SD-249, for the relief of Egidia Floriana Ines Zeppettini.-Mr. McCleave.
Bill SD-250, for the relief of Georgette Lemieux.

Mr. McCleave.
Bill SD-251, for the relief of Sylvia Spivak. -Mr. McCleave.
Bill SD-252, for the relief of Margaret Pate Orr.-Mr. McCleave.
Bill SD-253, for the relief of Laureen Elizabeth Saunderson.-Mr. McCleave.
Bill SD-254, for the relief of Jeannine Mar-leau.-Mr. McCleave.
Bill SD-255, for the relief of Doris Ville-neuve.-Mr. McCleave.
Bill SD-256, for the relief of Estelle Shet-zen.-Mr. McCleave.
Bill SD-257, for the relief of Eva Knopf.- Mr. McCleave.
Bill SD-258, for the relief of Marie Alice DeWit.-Mr. McCleave.
Bill SD-259, for the relief of Jean-Louis Trudel.-Mr. McCleave.
Bill SD-260, for the relief of Doris Elizabeth McEllin.

Mr. McCleave.
Bill SD-261, for the relief of Mary Jane Gabrielle Black.-Mr. McCleave.
Bill SD-262, for the relief of Lucien Aube. -Mr. McCleave.
Bill SD-263, for the relief of Denis Biron. -Mr. McCleave.
Bill SD-264, for the relief of Guy Robi-taille.-Mr. McCleave.
Bill SD-266, for the relief of Edith Henshaw Owen.-Mr. McCleave.
Bill SD-267, for the relief of Ruth Duggan. -Mr. McCleave.
Bill SD-268, for the relief of Joseph Georges Maurice Legault.-Mr. McCleave.
Bill SD-269, for the relief of Lomer Lussier. -Mr. McCleave.
Bill SD-270, for the relief of Anna May Blair.-Mr. McCleave.
Bill SD-271, for the relief of Norma Bernet Vallieres.-Mr. McCleave.
Bill SD-272, for the relief of Rose Belsky.
-Mr. McCleave.
Divorce Bills
Bill SD-273, for the relief of Csilla Groszman. -Mr. McCleave.
Bill SD-274, for the relief of Selma Kos-tiner.-Mr. McCleave.
Bill SD-275, for the relief of Leah (Lily) Goldberg.-Mr. McCleave.
Bill SD-276, for the relief of Isabella Gardiner.-Mr. McCleave.
Bill SD-277, for the relief of Diana Miriam Favreau.-Mr. McCleave.
Bill SD-278, for the relief of Philias Doil Menard.-Mr. McCleave.
Bill SD-279, for the relief of Viesturs Goba. -Mr. McCleave.
Bill SD-280, for the relief of Clifford Woodward Hall.-Mr. McCleave.
Bill SD-281, for the relief of Emelia Gador. -Mr. McCleave.
Bill SD-282, for the relief of Barbara Jean Bertram O'Brien.-Mr. McCleave.
Bill SD-283, for the relief of Arthur George Sims.-Mr. McCleave.
Bill SD-284, for the relief of Gladys Evelyn Viau.-Mr. McCleave.
Bill SD-285, for the relief of Yvonne Hum-bert-Droz.-Mr. McCleave.
Bill SD-286, for the relief of Joseph Paul Maurice Marcel Lefebvre.-Mr. McCleave.
Bill SD-287, for the relief of Thomas Smith. -Mr. McCleave.
Bill SD-288, for the relief of Marie Pauline Monique Denise Ferron.-Mr. McCleave.
Bill SD-289, for the relief of Mara Wokrina. -Mr. McCleave.
Bill SD-290, for the relief of Joyce Mary Hagemeyer.-Mr. McCleave.
Bill SD-291, for the relief of Rowland McLean Loftus.-Mr. McCleave.
Bill SD-292, for the relief of Janina Stefania Luszczki.-Mr. McCleave.
Bill SD-293, for the relief of Esther Mary Adler.-Mr. McCleave.
Bill SD-294, for the relief of Marie Juliette Ida Dick.-Mr. McCleave.
Bill SD-295, for the relief of Fred Austin Griffith.-Mr. McCleave.
Bill SD-296, for the relief of Joseph Paul Jules Jodoin.-Mr. McCleave.
Bill SD-297, for the relief of Janet Louisa Davis.-Mr. McCleave.
Bill SD-298, for the relief of Margaret Dorothy Smith.-Mr. McCleave.
Bill SD-299, for the relief of Christopher John Henry Doscher.-Mr. McCleave.
Bill SD-300, for the relief of Martha Saltvik.-Mr. McCleave.
[Stage Direction]
Divorce Bills
Bill SD-301, for the relief of Eva Farkass.
-Mr. McCleave.
Bill SD-302, for the relief of Albert Courtois. -Mr. McCleave.
Bill SD-303, for the relief of Madeleine Lebegue.-Mr. McCleave.
Bill SD-304, for the relief of Anthony Roy Rabone Hearn.-Mr. McCleave.
Bill SD-305, for the relief of Joseph Alfred Pope.-Mr. McCleave.
Bill SD-306, for the relief of Marigold Mavis Singer.-Mr. McCleave.
Bill SD-307, for the relief of Georgette Anne O'Leary.-Mr. McCleave.
Bill SD-308, for the relief of Ann Cicely Cosgrove.-Mr. McCleave.
Bill SD-309, for the relief of Agnes Hall-stein.-Mr. McCleave.
Bill SD-310, for the relief of Shirley Sherry Aileen Sarah Bronfman.-Mr. McCleave.
Bill SD-311, for the relief of Leta Sybil Farmer.-Mr. McCleave.
Bill SD-312, for the relief of Vlasta Sucho-mel.-Mr. McCleave.
Bill SD-313, for the relief of Lilian Norah Smith.-Mr. McCleave.
Bill SD-314, for the relief of Sarah Gal-ganov, otherwise known as Sarah Gale.-Mr. McCleave.
Bill SD-315, for the relief of Anna Zinger. -Mr. McCleave.
Bill SD-316, for the relief of Lucien Gagnon.-Mr. McCleave.
Bill SD-317, for the relief of Dennis James Haney.-Mr. McCleave.
Bill SD-318, for the relief of George Kenneth Polk.-Mr. McCleave.
Bill SD-319, for the relief of Mario Lattoni. -Mr. McCleave.
Bill SD-320, for the relief of Vincent La-placa.-Mr. McCleave.
Bill SD-321, for the relief of Marie Marguerite Jeanne-d'Arc Paiement.-Mr. McCleave.
Bill SD-322, for the relief of Joy Earle.- Mr. McCleave.
Bill SD-323, for the relief of Barbara Rosemary Olga Barbary.-Mr. McCleave.
Bill SD-324, for the relief of Assof Ernest Shaar.-Mr. McCleave.
Bill SD-325, for the relief of Joseph Wilfrid Paul Emile Marois.-Mr. McCleave.
Bill SD-326, for the relief of Erwin Gustav Pfeifer.-Mr. McCleave.
Bill SD-327, for the relief of Rita Elizabeth Bowden.-Mr. McCleave.

Bill SD-328, for the relief of Hazel Margaret Calvert.-Mr. McCleave.
Bill SD-329, for the relief of Luciano Domenis.-Mr. McCleave.
Bill SD-330, for the relief of Antonio (Arthur) Archambault.-Mr. McCleave.
Bill SD-331, for the relief of Ernestine La-vallee.-Mr. McCleave.
Bill SD-332, for the relief of Joseph Honore Antonio Lacerte.-Mr. McCleave.
Bill SD-333, for the relief of Doreen Chan-tigny.-Mr. McCleave.
Bill SD-334, for the relief of Sema Boro-dow.-Mr. McCleave.
Bill	SD-335,	for	the	relief	of	Gisele
Lamarche.-Mr. McCleave.
Bill SD-336, for the relief of Estelle Ma-thieu.-Mr. McCleave.
Bill	SD-337,	for	the	relief	of	Vilma
Beaudoin.-Mr. McCleave.
Bill SD-338, for the relief of Donald Kirk. -Mr. McCleave.
Bill SD-339, for the relief of Jacques-Emile Blanchard.-Mr. McCleave.
Bill SD-340, for the relief of Guy Thomas Carpenter.-Mr. McCleave.
Bill SD-341, for the relief of George Louis Draper.-Mr. McCleave.
Bill SD-342, for the relief of Berthe Dai-gneault.-Mr. McCleave.
Bill SD-343, for the relief of Stephen Beauchemin.-Mr. McCleave.
Bill SD-344, for the relief of Marie Gabrielle Lise Chouinard.-Mr. McCleave.
Bill SD-345, for the relief of Zar Boik.- Mr. McCleave.
Bill SD-346, for the relief of John Anthony Clifford Manning.-Mr. McCleave.
Bill SD-347, for the relief of Pearl Arron. -Mr. McCleave.
Bill SD-348, for the relief of Joseph Alfred Laflamme.-Mr. McCleave.
Bill SD-349, for the relief of Dorothy Elizabeth Davies.-Mr. McCleave.
Bill SD-350, for the relief of Elizabeth Rae Murphy.-Mr. McCleave.
Bill SD-351, for the relief of Hazel May Terry.-Mr. McCleave.
Bill SD-352, for the relief of Therese Hastings.-Mr. McCleave.
Bill SD-353, for the relief of Paul Lapres. -Mr. McCleave.
Bill SD-354, for the relief of Mary Christine Sweeney.-Mr. McCleave.
Bill SD-355, for the relief of Corinne Ryder Nurse.-Mr. McCleave.
Bill SD-356, for the relief of Evelyn Sue
Newton.-Mr. McCleave.
J. Nicholas (Nick) Mandziuk: the third reading of Bills Nos. SD-1 to SD-53, inclusive; SD-55 to SD-100, inclusive; SD-102 to SD-106, inclusive; and SD-108 to SD-138, inclusive; SD-140 to SD-264 inclusive and SD-266 to SD-356 inclusive.


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


Some hon. Members:: Agreed.


Frank Howard: On division.
Motion agreed to on division, and bills read the third time and passed.



PENITENTIARY ACT


[Stage Direction]
On the order:
Resuming debate on the motion of Mr. Howard for the second reading of Bill No. C-2, to amend the Penitentiary Act.
Gordon Minto Churchill: Mr. Speaker, I wonder if we might revert to government business now, if the house is agreeable to so doing. We would go on with Bill No. C-122.


John Whitney Pickersgill: Mr. Speaker, I am the one who is making the great sacrifice again, but I nevertheless feel that I would be expressing the views of all my hon. friends if I forwent the chance to make a speech myself in order to enable us to hear one from the Minister of Finance (Mr. Fleming).


Harold Edward Winch: Mr. Speaker, there are a vast number of public bills which undoubtedly cannot be considered this session. Therefore it was the understanding of this group that we would agree, if there was unanimous consent, to reverting to government business.


Gordon Minto Churchill: Thank you.


Mr. Speaker:: It is agreed, then, that the house waive the balance of the hour for private and public bills and revert to the business which was interrupted at five o'clock?


Some hon. Members:: Agreed.



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

Donald Methuen Fleming: the second reading of Bill C-122, to authorize the Minister of Finance to make payments to the governments of the
Dominion-Provincial Relations provinces and to authorize the government of Canada to enter into tax collection agreements with the governments of the provinces.
He said: Mr. Speaker, I appreciate the willingness of the house to expedite consideration of this measure on second reading in the manner just now indicated, and in the same spirit I can assure the house that I propose to be very brief.
This measure, Bill No. C-122, was introduced in the house on July 12. That introduction followed a discussion in the committee of the whole on the resolution stage. In introducing the resolution in the committee I set forth at I think some length, Mr. Speaker, the features of the proposed measure and the reasons why the government is asking the house to adopt this measure as one which will contribute and we believe contribute substantially, to an improvement in dominion-provincial fiscal relations.
I think it would be quite superfluous to repeat the reasons which I advanced in the statement at that time. The remarks were recorded in Hansard at pages 7910 to 7930. I do not, of course, claim to have occupied 20 pages of Hansard with my remarks, but those pages included the quite extensive tables which were placed on record with the consent of the house and which contain quite an encyclopaedia of tabular material in relation to this subject which it was thought would be of assistance to the house in the approach to the consideration of the bill on second reading. I think, therefore, I have nothing to add to the remarks that I made on July 11.
I think I should say to the house that when we reach the committee stage I will be introducing an amendment, and perhaps I should say just a word about the nature of that amendment at this point. In order that the crown in right of the dominion may make deductions at the source on account of provincial tax from payments to its own employees or in respect of other payments made out of the consolidated revenue fund or by an agent of Her Majesty in right of Canada, statutory authority for this purpose is required. It is proposed that the bill be amended to provide such statutory authority. Accordingly, Mr. Speaker, when we reach the committee stage of the bill I shall be introducing an amendment to clause 6 of the bill which will add to that clause a subclause 3. In order that they may have the opportunity to consider it, I am sending over to hon. members opposite copies of this proposed amendment. Apart from these observations, Mr. Speaker, I think that any
8942	HOUSE OF
Dominion-Provincial Relations further information hon. members may require concerning the provisions of the bill or its purport can perhaps best be offered at the committee stage of the bill.


John Whitney Pickersgill: Mr. Speaker, my first words must be an expression of profound disappointment at the brevity of the speech of the Minister of Finance (Mr. Fleming). That regret is not because I am fond of hearing the Minister of Finance but because I hoped to have a rest until half past seven before I was obliged to take up the time of the house again. But the Minister of Finance has told us that except for the amendment, of which he has given us notice, he had his say on July 11 at the resolution stage and he has nothing in particular to add.
I had hoped and had rather expected that the minister would at least deal with those developments which have taken place since his speech on July 11. I refer to the protests that have come from at least half the premiers of the provinces of this country about the inadequacy of the bill from their point of view and about the arrogant manner in which the government has treated the provincial governments and their representations.
Knowing how thorough the Minister of Finance is when he replies to arguments, I had expected that he would attempt to deal with these protests. However, apparently the decision of the government is that the views of the provincial governments as expressed by the heads of those governments are to be ignored. I do not think that some of them can be ignored by those of us on this side of the house and in the course of my remarks I shall have some observations to make about them.
First of all I wish to say something about the measure itself. The purpose of this measure, as I see it, is to do two things. It is first of all to provide for a redistribution to the provinces of certain sums of money that are collected from the national taxpayers and paid into the national treasury, a redistribution of these sums to the provinces to be used in any way the provincial legislatures may see fit for provincial purposes. The other purpose of the legislation is to empower the Minister of Finance (Mr. Fleming) to collect for the provinces which wish to have their taxes collected for them, their income taxes both personal and corporate. It seems to me that this more or less exhausts the fundamental purposes of the bill, though the measure contains a good many ancillary features which can be dealt with at the committee stage.
I think it would not be amiss to say a word or two about why there should be any taxes


at all collected by virtue of action of this parliament to be used for provincial purposes. When the Minister of Finance was on this side of the house he used to repeat arguments which have been made in other times and by distinguished Liberals about how desirable it would be at all times to have the taxes imposed and collected by those who spent the money. As Sir Wilfrid Laurier said in 1907 when he was proposing to increase the subsidies to the provinces, that is unexceptionable as a general abstract proposition. I do not think there is anyone who would argue that apart from attendant circumstances there is anything to be said in favour of one body collecting taxes for another body to spend. If we had ideal theoretical conditions that would probably be the way in which it could be done. But, as Sir Wilfrid Laurier also pointed out in 1907, there would have been one little difficulty. If we had adhered to this fundamental general principle there would never have been Canadian confederation and there would be no Canadian nation today. I say this because for all the provinces except Ontario-for all the original four except Ontario-and for every other province which has come into the Canadian union since, the subsidy has been a sine qua non. Without it the province could not have afforded to become part of the union. That has always been true, and for more than half a century after confederation the greater part of provincial revenues was derived from the federal treasury. I shall not deal further with that matter because I believe one of my colleagues will have more to say about it. There seems to be in certain parts of the country a profound ignorance of these plain historical facts, though these facts are easily ascertainable by anyone who wants to look them up.
Notwithstanding the fact that the foundation of confederation was subsidies, it happened in the thirties that there was a great recession in this country and for the first time we had to face the necessity either of letting people starve or of supporting them out of public funds on a great scale. The burden of doing this was far too great for any of the provinces to undertake on the basis of the taxation capacity the provinces had in those days. It was, of course, bankrupting to most of the provinces. One of the provinces which now boasts of being more financially orthodox than any other defaulted on the interest payments on its bonds. Other provinces were only saved from bankruptcy by hand-outs from the provincial treasury and, in the case of Manitoba, where I lived at that time, by the imposition of taxation of a severity which no province has ever experienced since. The problem was so great that by 1935 it had to

be dealt with in one or two ways. This was recognized before the election of 1935. The present lieutenant governor of Quebec was, in fact, chairman of a committee of this house which considered this problem of federal-provincial relations in that year. This may seem odd to the ears of some people in the province in which he is now the representative of the crown, but that committee recommended centralization as a cure for this problem. That, of course, has been the historical position of the Tory party, and Mr. Gagnon and Mr. Bennett, in whose government he later served, were, of course, merely following that tradition. But after the election of 1935 a different position was taken by the new government and a great royal commission, perhaps the greatest royal commission ever appointed in this country, was established by Mr. Mackenzie King and Mr. Ernest Lapointe in 1937, the commission which is generally known as the Rowell-Sirois commission on dominion-provincial relations. That commission was instructed to approach this problem from the opposite point of view, not from the point of view of taking services away from the provinces and centralizing them in Ottawa, but from the point of view of finding the means to place all the provinces in a position to perform the services which the founders of confederation intended them to have. That, of course, was the historic Liberal approach to the problem and it has been the Liberal approach ever since. Unfortunately this problem was not finally solved before the second world war, and in the second world war, of course, many of the problems of the provinces disappeared because we had over full employment. During most of the years of the war every provincial government had substantial surpluses and the problem was temporarily obscured. Indeed, the easiest course at the end of the war would have been to go back to the situation as it was in 1937 or 1939 and start all over again.
That was not done. It was not done for two reasons. It was not done, in the first place, because the provincial governments did not want to do it. The man who took the initiative in bringing this question forward was the then premier of Ontario, Mr. George Drew. Neither did the federal government want a return to the old position. They felt there should be a more constructive approach to the whole problem. In 1945 and 1946 a prolonged effort was made to get an agreement on a very broad base. Unfortunately, it was not possible to get an agreement, and the federal government then made certain proposals to the provinces which all but two of them accepted-propositions which had the effect of putting the provinces in funds in order that they might provide
Dominion-Provincial Relations their own services. In 1952, when those agreements expired, new agreements based on much the same foundation although somewhat changed were made, and on this occasion all the provinces participated with the exception of Quebec. Ontario, with a new premier, came in in the meantime.
It became increasingly apparent that through no fault of the federal government but through a self denying ordinance of the premier of Quebec of that day these arrangements were resulting in large sums of money being collected in nine and later in ten of the provinces and being disbursed for the benefit of people in only eight or nine. This was a situation which no Canadian interested in the unity of his country could contemplate with anything but sorrow, and the position was seriously aggravated when the financial situation of the province of Quebec became such as to cause anxiety. Because it was not willing to participate in the existing system, the government of that province put a tax on its people and this meant they were doubly taxed and getting no benefit from one of the taxes. I am not criticizing that government for that at this stage at all. I am simply stating the facts.
I well remember that at that time Mr. St. Laurent said one day: "I do not think we can go on being unfair because another government is, in our opinion, unreasonable". He and his officials then devoted a great deal of time and energy to devising a stop gap arrangement. That was recognized as a stop gap and a real search was made to find a better system in 1955 and 1956, accounts of which have been placed on Hansard times without number and I do not intend to weary the committee by repeating them now.
In my opinion a very substantial improvement was found. To paraphrase Mr. St. Laurent's words which I do not have here, it was the best thing that had been thought of up to that time. But he did not claim it was perfect. That was the system of equalization.
Now, what is equalization? What is the basis of equalization as it was established at that time? It is very simple. Mr. Harris expressed it very well in one of his budget speeches when he said that what we collect here in Ottawa in the federal treasury is collected from the people of Canada for the benefit of all the people of Canada and that it should benefit all the people of Canada equally and that that is the only basis on which we can safely proceed if we wish to have a united country.
The principle of equalization is very simple. It is that a certain fixed proportion of the revenues from the personal income tax and the corporation income tax, not fixed for all
8944	HOUSE OF COMMONS
Dominion-Provincial Relations time but capable of being varied from time to time, should be allotted to the provincial governments. They should not be forced to impose the tax themselves but a certain proportion should be allotted to them for provincial purposes. In addition, any of those provinces where that allotment was less than the average of the collections of the two wealthiest provinces-that is to say, the provinces with the wealthiest taxpayers, on the average-the deficiency should be made up by an equalization payment so that the provincial governments of all our provinces would have, per head, the same amount to spend on their people out of these great national taxes. In other words, equality.
It was not quite equality, however, because to have complete equality one should have taken the highest province. There were certain objections to doing that which were put forward at the time by some of the provincial governments. It was felt that it should be the two highest provinces. I admit that personally I think it would have been more completely fair to have taken the highest, but it made very little difference because it was averaged not just between the two figures but with the population taken into account, and when that was taken into account the difference was slight whether Ontario was taken alone or whether Ontario and British Columbia were taken together.
That was the principle of equalization that was embodied in the statute of 1956. Indeed it was the basis of that statute but it was not the only basis. The statute of 1956 gave to the provincial governments a greater freedom of choice of physical expedients, plus equalization, plus redistribution from the federal treasury than any other scheme before. But equalization was paid as a matter of right. No province had to come and apply for it. The provinces did not have to sign for it. It was paid as a matter of right. Any province that wished to do so could rent to the federal government any of the three tax fields, the personal income tax, the corporation income tax or the succession duty, and not impose a tax, or it could impose any or all of the taxes, as it saw fit.
There was complete freedom. In addition to that, any province could impose any additional tax it liked although it could not get an abatement of such tax. In other words, no strings of any kind were attached except those which the provincial governments themselves wished to place upon their own freedom of action because they felt it was a better deal for them.
No province suffered through not making a tax rental agreement. The tax rental arrangement was a purely optional matter. The only

thing about that which was completely new and really important was the equalization. Coupled with that, of course, there were certain provisions for stabilization.
I do not know whether or not some of the provincial premiers had a prescience about what might happen after 1956 or 1957 but some of them seemed to wish a floor on what they would get. I am sure that if they had been confident that the Liberal government was going to stay in office they would not have worried about a floor because they would have expected the kind of progress, expansion and growth which there was under the Liberal administration in 1956; but perhaps foreseeing what would happen in 1957 and fearing the financial mismanagement of the country after that date, they insisted on having a floor which was called stabilization, and this was provided. I shall not go into the details of it because this subject is not before us at the moment. As a result of what happened under the present government some of the provinces had to rely upon that stabilization to some degree and apparently are going to increasingly rely upon it.
We were told in 1957 during the course of a celebrated election campaign that all this was going to be changed, that a new era was going to dawn in federal-provincial relations, that if the Conservatives won the election there would be a state of harmony between the federal government and the provinces which had not existed before, that very much greater latitude would be given to them, that their revenues would be substantially increased and that the revenues of the federal treasury would be correspondingly reduced. Of course, this was all going to be done out of these great surpluses that the Liberals had so wickedly been building up over the years. It is perhaps not surprising that these great expectations were not fulfilled. Perhaps one cannot accurately describe them any longer as expectations; they are simply historic relics today.
Some of us recall these events and perhaps it is worth while reminding hon. members of the committee of some of them. At Massey Hall in Toronto on April 27, 1957 the present premier of Ontario was on his feet to address the opening Conservative rally of the election campaign of that year. What did Mr. Frost say? He said:
We have been compelled to impose unfair taxation on our people because of the failure of the federal government to face up to our problems-
Not "its problems" but "our problems". I continue:
-these are going to increase unless a just solution is found and the man who is going to find that solution is this man who is sitting on the platform.

Well, "this man" is now the Prime Minister of Canada. The solution to Mr. Frost's problem, as everyone in this chamber knows and is reminded of every time he makes a purchase in any shop in this province today was not found, except indirectly, by this man. Indeed, of all those who were disillusioned and disappointed by the outcome of the promises of that fair spring of 1957 there could be no more disillusioned man than the retiring premier of Ontario.


Mr. Drysdale:: How much tax do they pay in Quebec?


John Whitney Pickersgill: I do not know how much the tax is in Quebec; I happen to live in Ontario. I know the tax was not going to be imposed if we got a Tory government in Canada. This man was going to come up with another $100 million without any provincial taxes.


Mr. Benidickson:: He did not.


John Whitney Pickersgill: I have described those great expectations which ended up in mere historic relics.


John Cameron Pallett: Look around you.


An hon. Member:: Seven per cent in
British Columbia.


John Whitney Pickersgill: Of course the people of British Columbia swallowed the same kind of guff and look what they have there, as the hon. member has taken the trouble to point out.
The plain fact is, of course, that we were told that right after the election in 1957 there would be a federal-provincial conference. It would be the first thing that would happen. Well, it happened in November 1957 and, lo and behold, instead of a solution there were a few platitudinous observations made by the Prime Minister at the beginning of that conference and then the premiers stated, as they had been encouraged to by the election speeches, what they thought they ought to get out of the treasury, and then they got a cold towel in their faces from the Minister of Finance who had been adding with that capacity to add which we know is unrivalled in this country. He had found out how much this was going to cost and he told the premiers what he felt it was going to cost and suggested that they go home. He promised that they would be back in January.


Donald Methuen Fleming: I never suggested that anybody go home.


John Whitney Pickersgill: If the minister does not think his speech was a suggestion to them to go home he has a very poor capacity, as I think he has, to calculate the effect of
90205-6-564
Dominion-Provincial Relations his own performances. At any rate, they came to pray and they went home to mourn. But they were told they were going to have another chance. This great harmony, this agreement, this understanding that was going to be reached, this new era of brotherly love and harmony between provincial premiers and the government of Canada that was to be ushered in in 1957 was going to come in 1958 at the next conference.
We know what the next conference was like. The next conference was held by way of the telegraph companies, and some of the premiers were not even present on time; they read about it first in the newspapers. The minister told them they were going to get a small slice on account of the great expectations and they were going to get it right away. They were not going to be consulted about it; it was going to be put through parliament quickly, and in the words of the minister, not on that occasion but on previous occasions, they could take it or leave it.
Well, of course, it was money; it was some more money and they took it. It was also before the 1958 election, and that is all they have ever seen. Then we had the great period of the minister's study groups, and that went on for a long time. Finally it was apparent that this whole business could not be stalled off much longer, and in 1960 the provincial premiers were again called back to Ottawa for another round. Before they came here the minister was asked whether this was with a view to improving the existing arrangements which had been so dreadful, of course, before 1957, but which were carried on all during this period, and the minister said, "Oh, no, all these agreements are in operation; this is for the next period after March 31, 1962." The premiers came here and I am sure they expected to be told what ideas were in the minds of the federal government. Well, they did not get any ideas; they did not get any suggestions in detail but they did get an assurance-and I want to read it and put it on Hansard because I think this is one of the most solemn assurances ever given to the provincial governments by any Prime Minister in the history of this country. This assurance will be found on page 10 of the report of the proceedings of the dominion-provincial conference, 1960. It is part of the opening speech delivered by the Prime Minister as chairman of that conference, and the pledge reads:
I want to make this abundantly clear on behalf of the dominion government that whatever the ultimate decision may be the principle of equalization must be preserved.
Equalization, the second component, is a payment by Canada to the provinces to bring the per capita return from the three taxes at standard rates up to the average per capita yield in the two provinces in which per capita yield is highest.
8946	HOUSE OF
Dominion-Provincial Relations For provinces in which the tax potential is relatively low, this principle is the most important.
It might be noted in passing that earlier arrangements did not recognize the principle of equalization explicity although it was to some extent implicit in the "per capita" basis of payment.
An then, these words:
Again I wish to emphasize that the federal government remains firmly committed to the principle of equalization and of financial assistance to those provinces in which incomes and taxable capacity are below those of the richer provinces.
What has happened to that pledge I will deal with in the second instalment of these remarks.



PROCEDURE


Mr. Speaker:: Before I leave the chair may I ask leave of the house to table in English and in French the second report of the special committee appointed to consider with Mr. Speaker the procedure of the house.


Some hon. Members:: Agreed.


William Moore Benidickson: Is there to be a debate on it?


Mr. Speaker:: If the house would permit a motion to bring the report before the house, for its consideration, to be put on the order paper for tomorrow, the report could be dealt with then if the house wished.


William Moore Benidickson: It would make it possible to do so.


John Whitney Pickersgill: I understand, sir, that it would be printed in Votes and Proceedings so that every hon. member would be enabled' to read it tomorrow before we would be expected to deal with it. This is my understanding, and it would seem to be a reasonable course.


Mr. Speaker:: By leave of the house the motion to approve the report will be put on the order paper and the report will be printed in Votes and Proceedings and be available to all hon. members for tomorrow.


Some hon. Members:: Agreed.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 7.30 p.m. DOMINION-PROVINCIAL RELATIONS

[Stage Direction]
The house resumed consideration of the motion of Mr. Fleming (Eglinton) for the 
[Stage Direction]
second reading of Bill No. C-122, to authorize the Minister of Finance to make payments to the governments of the provinces and to authorize the government of Canada to enter into tax collection agreements with the governments of the provinces.
John Whitney Pickersgill: Before we adjourned at dinner time, I had just read the undertaking that had been given by the Prime Minister (Mr. Diefenbaker) on July 25 and which appears in the proceedings of the dominion-provincial conference for the year 1960. I had expressed the strongest possible approval of that pledge. I did so at the resolution stage and I want again to make it very clear that I do not know of any better definition of equalization than the definition that was given by the Prime Minister. Had he stuck to the position he had taken on July 25, 1960 in this solemn undertaking to the provinces, I do not believe we would have had a very long debate tonight. While all the provincial governments would no doubt be anxious to get a larger share of the tax money, they all would recognize as was recognized certainly by the opposition in this house, that the basis of this equalization was just and fair. This basis was accepted by the government for four years.
Now, I do not want to leave out another aspect of this matter. It is true that in 1958, for the fiscal year 1958-59 and subsequent fiscal years up to the present one, the present government did increase the amount of the equalization. They did not change the basis in any respect whatever from the basis that was established on the recommendation of Mr. St. Laurent and Mr. Harris in 1956. However, they did increase the amount and that increase was undoubtedly a very welcome increase to the provincial governments. It was a good deal less than they would have liked to get. I might say parenthetically right here, and I am looking at a former provincial premier as I say this, that as long as we live in this vale of tears where men are imperfect, we will never have provincial governments completely satisfied with the share of the total revenues that is available to them. If they were satisfied I am afraid that many national services would be starved. This is something that anyone with any experience in these matters has to recognize.
It was recognized in 1956 by all of the premiers, even Mr. Duplessis who on all previous occasions had taken a completely intransigent attitude that this was such a marked improvement and that he would take the money, and he did take it. It was a very good thing for him that he did because he would not have been able to carry on much

longer without it. It was a very good thing for the people of Quebec, too, that he did. The fact of the matter was that every premier at that conference recognized that the new basis of equalization was a great improvement over the old tax rental system. I think it is fair to say that there was no premier who would have been caught dead admitting that he had got quite enough. It might be that in retrospect they did not get quite enough. I would not be prepared to argue that point very strenuously. It may be that in the circumstances it might have been better to make the dividend a little larger than it was.
However, I am talking about the principle, and as I say this principle has been continued up to the present. There was an improvement made in the amount, quite a substantial improvement in 1958 by the present government. The present government did something else in 1958 for which I have never ceased to give them credit. I spoke for our party on this matter when the measure was first before the house and I expressed our approval of it. I commended the government for it and I have commended the government for it ever since. It is really about the only thing I can commend this government upon wholeheartedly, and its unique character makes me all the more willing to do so. I refer to the Atlantic provinces adjustment grants. I say theoretically and I also say in a practical sense that I believe it would have been better if suggestions such as those which were made by Mr. Henry Hicks and by the then premier of New Brunswick (Mr. Flemming) who is now here, to establish these payments on a basis of principle had been accepted. I think those suggestions would be better than the fixed amount. I also think that it should apply in theory-I hope it would never apply in practice-to any province that found itself in similar circumstances. I think that would give it a wider and solider foundation. I am not seeking to embarrass him but I doubt that the Minister of Forestry (Mr. Flemming) would disagree much with that statement. I know there are many people in the Atlantic provinces who agree with me. But notwithstanding that fact, substantially the same end was achieved by what was done.
At that time it was stressed by the government that equalization alone was not enough to meet the special needs of the Atlantic provinces and that something in addition to equalization was needed, and I stress this point. The two things were kept quite distinct. The minister emphasized that fact very strongly when he put the matter before the house, namely that they were quite separate and distinct things, and that this was something new done by the new government. It 90205-6-564i
Dominion-Provincial Relations was something new and it was something which was very creditable. I doubt perhaps whether they would have done it with the same alacrity if they had had then the majority which they had after March 31, 1958. However, that is entering the field of speculation and perhaps I should not do so. I should underline the fact that they have done nothing more for the provinces since then. Once they obtained a majority they just stonewalled the provinces up until the time they finally called the conference for the next round in 1960 and they put nothing before them in July except a few pious platitudes.
Then came the debacle in October. What happened in October was this. I suppose it must have been one of those days after the Minister of Finance (Mr. Fleming) had had a bad night, when he had been thinking about his successive deficits and the terrible situation into which he had got the finances of this country. But at any rate the government decided to go right back to 1867. They said, "No more of this progress, no more of this improvement with the growth of the country, no more of this improvement with the growth of population." They said, "You will get $220 million this year and this is all you will get from now on." They said, "Of course we are not saying this is final. This is just a suggestion. We hope you will take it kindly. You can get together and divide it up in any way you like." This is the way in which you get harmony. You toss a bone to a number of- perhaps I should not describe the premiers in that way. Perhaps I had better pause, Mr. Speaker, in that analogy and let each hon. member go on for himself. As a device for the promotion of harmony, to say to 10 provincial premiers "You can have this much money; now you go off by yourselves and divide it up", I cannot think of any better way to get discord than that. It really is infallible. It is sure. It is bound to work and it did work, but not exactly in the way in which the government expected it to work. They did not get harmony but they got unanimity. As the Leader of the Opposition (Mr. Pearson) pointed out at the resolution stage, the premiers were just falling over one another in condemning the government for the treatment they received at that conference. We all remember the Toronto Star and the anthology they had. The Minister of Finance remembers it well. He rises and denounces it every time it is mentioned. But there they were in black and white, what each of them said about it. I do not need to put it on the record again. It is in Hansard of last July 11 for those who care to read.


Lionel Chevrier: Unanimous condemnation.
8948	HOUSE OF
Dominion-Provincial Relations


John Whitney Pickersgill: As my hon. friend the Acting Leader of the Opposition has said, it was unanimous condemnation. The government was rather nervous about it. Then Mr. Frost was pressed to bring down his budget in January. He rose in his place in the legislature one day in January and said, "I cannot bring down a budget because the government at Ottawa cannot make up its mind what it is going to do and I cannot bring in a budget until I find out what they are going to do." Then we asked the usual questions which it was the duty of an opposition to ask, and we received the usual replies which we receive from this government and which are not very illuminating, that some time in the future in due course if we are good boys, we would be told.
Then there was going to be a supply day the following Monday. Apparently the Minister of Finance or some other member of the government either heard or guessed that the opposition might bring in a vote of want of confidence based on federal-provincial relations. What a scurrying around there must have been over the week end because finally the minister came into the house that day and he could hardly contain himself. Of course, he does not sit in the corner but in every other respect he was like Little Jack Horner. So all of a sudden, out came the plum, namely this letter to the premiers. They had not had time to get it then. He was taking no chances with the post office or the Canadian National Telegraphs. He was getting it out through parliament. This letter told the premiers that there was going to be another conference that Santa Claus was not quite dead after all, because there was going to be what was called a growth factor in the equalization. We were having a debate, Mr. Speaker; and in the olden days in Canada the purpose of debates in this house used to be to illuminate a subject and to inform-


Mr. Bell (Carleton):: The hon. gentleman changed that.


John Whitney Pickersgill: No; that was changed in June 1957.


Richard Albert Bell: No; it was the hon. gentleman.


John Whitney Pickersgill: It was changed in June 1957. Now the purpose of debate, as we have seen earlier today in another context is clearly to obscure every issue. But at any rate we asked the Minister of Finance-
Mr. Pallet!: The hon. member has occupied the floor most of today.


J.-H.-Théogène Ricard: When was closure applied?


Mr. Speaker:: Order.
[Mr. Chevrier.l


John Whitney Pickersgill: We asked the Minister of Finance and we asked the Prime Minister for a couple of days-


J.-H.-Théogène Ricard: When was closure applied?


John Whitney Pickersgill: I am just wondering, Mr. Speaker, whether you may not be impelled in the circumstances to remind the hon. gentleman. As I was saying-


J.-H.-Théogène Ricard: What were you saying anyway? Tell us what you were saying.


Mr. Speaker:: Order. The hon. member who has the floor is entitled to an uninterupted hearing.


J.-H.-Théogène Ricard: Go ahead.


John Whitney Pickersgill: As I was saying, we sought to find out what was meant by growth factor. We tried every device that was known to an opposition to get the definition of it. We obtained none. I think there is only one reason why we obtained no definition, namely that the government had no idea what the growth factor was going to be. They were faced then, as they are faced every so often, with a deadline which they were obliged to meet, just like the deadline that is coming in three or four days with regard to the C.N.R. presidency. They were faced with a deadline. Then at the last moment, just as the clock was about to strike 12, they had to produce something so they called it a growth factor, but they did not know what kind of growth factor it was going to be. They had not even decided what kind of fertilizer to use at that time.


Mr. Cardiff:: There is a great deal of it flying about now.


John Whitney Pickersgill: All they knew was that if they stuck by this principle that they had proposed in October, this $220 million and no more, they would have had the whole country against them, led by the premier of Ontario. So they had to do something about it. When the conference came in February they produced the scheme that they have now produced and which I intend to try to analyse very briefly and in a non-statistical way.
I think we have to start from the premise that the government was very irked by certain effects of the equalization plan. They were very irked by the fact that a very considerable equalization payment was made to the government of Quebec. Somehow or other they do not seem to have the same enthusiasm for the government of Quebec that they had in May and June of 1960. I do not know why, but they do not.
They were also very much irked in more ways than one by the government of British Columbia. They felt that government ought

to be taught a lesson. They were apparently outraged by the fact that the government of Alberta got a substantial equalization payment and they felt something had to be done about that because Alberta was apparently considered too rich to deserve it.
They were also concerned about the fact that somehow or other, without spending much money, they had to scratch around and find a little more for the premier of Ontario; not, of course, what they had promised; not what the advertisements had promised in 1957, but another dividend. He was getting pretty restive after four years and he was not going to be content even with the sales tax unless he got some more out of the federal treasury; not directly, because Ontario got nothing directly, but indirectly from the federal government withdrawing from the field and leaving him to cultivate it at no extra cost to the taxpayer.
So they devised a scheme which they were pleased to call equalization but which is an utter travesty of equalization. They decided, instead of equalizing revenues so that all Canadians wherever they lived were treated alike, to use the national average as the basis. What effect did that have? That had been one of the formulae that had been considered in 1955 and 1956-I know that very well-and rejected because it was so unfair. But the government decided to try to use it. They got results from using it which would have been so unfavourable to the poorer provinces-in fact, to half the provinces-that they simply did not dare to produce that by itself.
Even so it was not doing enough harm to Alberta's position. Therefore they thought they would bring in some notion of taxes on natural resources. They got from the bureau of statistics some mysterious figure, and then they tossed it into the salad, mixed it up a little bit more and got the machine to crank out a figure to see how that worked. That did the trick as far as Alberta and British Columbia were concerned. It cut them down. It of course improved Ontario's position quite materially; and it cut Quebec down, which they were very anxious to do. This would have been fine, but it also cut down Manitoba. They just did not see how they could possibly cut Manitoba down.


William Moore Benidickson: They were following John then.


John Whitney Pickersgill: After all, Manitoba had a Tory government. So they had to start the mixer working again and see if they could throw something else into the hopper, some other factor of some kind or other, and get something that would come out politically right. Whether is was just, whether it was
Dominion-Provincial Relations fair, whether it was based on any principle did not matter, as long as it would bring the right political effect.
Then they said, "Well, if any province under our new scheme is going to get less than it got under the old scheme, it can stick to the old scheme". That fixed up Manitoba. Well, it did not fix up Manitoba, as I will show in a minute, but at least it did not make Manitoba's position quite as bad as it would otherwise have been. But of course it had the terrible disadvantage that it applied to Quebec also, and to Saskatchewan.
What has happened, sir, as a result of using all these shenanigans instead of following a basis of principle? All these various factors were put in to try to achieve at no cost, or very little cost to the treasury, some predetermined result. Then there was another gimmick for the Atlantic provinces. Of course, under this new equalization formula they were away below what they would have been under the old formula. So the minister said, "Toss them another $10 million under the Atlantic provinces grants and call it equalization. Mix it all up together. Then say, after mixing up the equalization, the Atlantic provinces grants and everything else, that they are not to get any less than they got before". We remember when the minister brought in the Atlantic provinces grants. In the first place he said they were separate from equalization. They were-


An hon. Member:: Which you approved.


John Whitney Pickersgill: Which we approved and which I still approve. He said they were something separate and distinct, which was needed, quite apart from equalization. But now they are in the mix, in the salad, as the machine turns around.
This had a wonderful effect because it really produced a result that was better for Prince Edward Island, and for Nova Scotia for the time being it was quite a considerable improvement. For Newfoundland there was some improvement, too, especially when account was taken of something that should never have been connected with this in any way whatsoever; that is what Newfoundland is entitled to as its constitutional right under the terms of union, which has also been mixed up in this formula.
However, it had this wonderful effect, that it really cut New Brunswick down. What was given with the one hand was taken away with the other. For some reason or another New Brunswick was not quite so popular with the present government after June, 1960 as it had been before. So they got another nice little political gimmick worked into this.
8950	HOUSE OF
Dominion-Provincial Relations
What is the result? The result, as the minister showed in the tables he put before us on July 11, is that the difference between the old scheme as projected for this year and the new scheme is $17 million approximately. It is costing the treasury $17 million more, and of that $17 million Ontario gains $18 million and the rest of the provinces lose $1 million. Stripped of all the other elements, that is what happened. That is shown in these tables.


William Moore Benidickson: But Ontario did not get $100 million.


John Whitney Pickersgill: Ontario, of course, was very far below what "this man"-to quote the premier of Ontario, as I quoted him before-was going to produce. What did Mr. Frost do? He brought down his budget then, after this scheme was out. He decided the game was up. He brought down his budget and as a memorial to the Diefenbaker-Flem-ing government he established the sales tax. Being a realist and a politician he took good care to point out that it was not his fault that this sales tax was imposed but that the fault lay elsewhere. There is no doubt that as compared with the expectations he was properly entitled to say the fault did lie elsewhere.
Let us look at the result by provinces. British Columbia and Alberta, because they are above the national average, are actually going to get less next year than they are getting this year. Quebec, Manitoba and Saskatchewan will get precisely what they would have got had there been no change whatsoever. New Brunswick gets very little more than it would have got had there been no change-substantially less than a million dollars. The other three Atlantic provinces will get substantially more for the time being. As I say, the one big gainer is Ontario. If the federal government had been prepared to recommend that the provincial government should get a larger share of the tax revenues than they were getting before, if they had felt they could afford to make such an offer, I would not begrudge it to any province on a fair basis, but I do not think anyone could argue that to increase the total amount by $17 million and have $18 million more go to one province is the way to promote that spirit of justice and fair play or that harmony which the Prime Minister promised would be the result of his substitution for the previous administration.
I had hoped-but I have gone on too long -to say something about the attitude of the various provincial premiers toward this proposal. However, most of the provincial premiers are articulate and have made their views known. It is certainly not a happy


chorus that we hear. Not one of them has expressed himself as satisfied. As I said earlier, I do not think that is to be expected. Unlike the Minister of Finance (Mr. Fleming) and the Prime Minister (Mr. Diefen-baker) who were convinced that if they could only sit over there they could make all the premiers happy, I never thought that was possible. I do not think hon. gentlemen who sit on the treasury benches think so now, either. If they do, I advise them to go out and have another interview with Mr. Bennett-if they can find him. There are other premiers whom they could visit. Nothing would give me greater pleasure, for example, than to be able to eavesdrop at the door when the premier of Manitoba is expressing his real views about the way Manitoba has been treated by this government. If there is one government which has loyally, almost slavishly, supported the present government it has been the government of Manitoba, and it has got nothing but kicks, delays and lack of consideration for its pains. Evidently, the view is: you can count on good old Duff. He said "Where Dief goes, Duff will go, too." So there is no need to do anything for him. That seems to be the attitude toward Manitoba and it has been well reflected, I may say, in the treatment of Manitoba in this whole situation. Knowing the way this government approaches all these problems, perhaps one cannot blame them for taking an attitude of that kind toward the government of Saskatchewan, but one would have thought there v/ould have been a little decent feeling toward poor Duff.
There is just one other thing I want to say. The Minister of Finance, speaking on the resolution stage, made one or two of his usual modest and accurate claims in regard to this matter and I think I should say a word or two about that. The minister said, as reported on page 7910 of Hansard:
Although it has greatly improved the financial substance of the present arrangements this government has recognized the weaknesses of the tax rental system which it inherited, both from the provincial and federal standpoint, and has become increasingly convinced of the need for a new approach which would give greater freedom and responsibility to the provincial government and which would be compatible with the constitution.
I may say that this government did not inherit the tax rental system at all. The tax rental system as a system of redistributing revenues was abandoned by the previous government in 1956 in favour of equalization. That was done by the previous government, and no province was financially the loser, whether it had a tax rental agreement or

not. The tax rental system was a pure convenience, and nothing more, from 1957 onward. It was an option which the provinces could take if they wished. No province had to take it in order to get the benefits of the equalization scheme. That is well known to the Minister of Finance, yet he talks jargon like this. Mr. Drew and Mr. Duplessis had a point in 1945 and 1946 when they said that in order to get the benefits of this scheme they were compelled to sign an agreement. But that was all done away with by the previous administration in 1955 and 1956.


J.-H.-Théogène Ricard: What did you say, then?


John Whitney Pickersgill: In 1955 and 1956 I supported the abandonment of the tax rental system for the equalization system, though at that time the change was attacked and opposed by the Minister of Finance and by most of his colleagues who were in the house at that time. The plain fact is that the tax rental system has been nothing but a convenience from April 1, 1957, onwards, and there were no tax rental agreements except with those provincial governments which wanted them because their people did not want duplication of taxes.
There is only one reason why these arrangements have been abandoned by the present government in favour of this tax collection system, and it is this: it is because the minister has these mountainous deficits and wants to get a statistical reduction in his expenditures and in his deficits and create a statistical situation which would be different and which would be to this advantage. That is the only reason why the people of those provinces which do not want to abandon the convenience of the tax rental arrangement are being denied the opportunity of continuing those arrangements. This is not going to change anything. It will change nothing to have the taxes imposed by the legislature of Manitoba, say, and collected by this government. It will have no effect except that the minister can come here and say he has saved two or three million dollars in this way while the provinces have inflated their budgets. The minister will go around boasting that this is a real economy when it is nothing of the kind. Really, it is a cheap political dodge.
The other thing the minister says is that this will give the provinces greater freedom. As to that, under the present arrangements Quebec, Manitoba and Saskatchewan have no freedom at all. I selected those three provinces for the reason that they got more under the old arrangements than they do under the new one. They would have to put their taxes up astronomically before they could make any gain. By putting up their
Dominion-Provincial Relations taxes all they would do is to save the minister some real money. In other words what this new scheme has done has been to put Quebec, Manitoba and Saskatchewan into a strait-jacket they were not in under the old equalization system. That is really fundamentally true, too, for the Atlantic provinces as I think the minister will see if he has had time yet to read the correspondence that was tabled the other day by the Prime Minister.


Donald Methuen Fleming: That is fundamentally untrue.


John Whitney Pickersgill: The phoniest part of this whole business was expressed by the minister in this way as reported at page 7911 of Hansard which may be summarized as follows: In short, the provinces would reassume their constitutional rights and responsibilities to impose and vary their tax levies as they saw fit.
In the first place, no province ever gave up any of those rights at any time.


An hon. Member:: What about the War Measures Act?


John Whitney Pickersgill: Not even under the War Measures Act. No province at any time in the history of this country has ever given up its constitutional right to tax; never, under any system. It is true that in return for very substantial payments which in every case amounted to more than the province could have raised from an equivalent rate of tax that the provinces voluntarily agreed not to impose-


J.-H.-Théogène Ricard: What is that?


Donald Methuen Fleming: Such hair splitting.


John Whitney Pickersgill: This minister dares to talk about hair splitting.


Donald Methuen Fleming: The hon. member is engaged in hair splitting.


John Whitney Pickersgill: This minister whose words I have been analysing to some extent dares to talk about hair splitting. Let me tell the hon. gentleman that proof of the fact that no province ever gave up any constitutional right is that Quebec would never enter into these agreements. If any constitutional rights had been taken away, surely they could not have been taken away from some provinces and not from others. The fact of the matter is that in 1947 the government in its wisdom saw fit to make offers which could be accepted or rejected for the rental of these tax fields and in every case, with respect to every province, what was paid for them was a good deal more than that province could have raised out of taxation in this field. Those are the facts.


J.-H.-Théogène Ricard: Take it or leave it.

Dominion-Provincial Relations


John Whitney Pickersgill: Yes, the hon. gentleman is perfectly right. That is exactly what it was. There was no compulsion, they could take it or leave it. But what they could take or leave was a figure arrived at after two years of thorough discussions, a figure that was about 50 per cent higher than the figure suggested at the original conference in 1945, and a figure far beyond the dreams, hopes or expectations of any of the provincial premiers before that. It was the greatest advance ever made. Of course, it was not at all perfect and had grave imperfections to which I have referred. I have attempted to be very fair about this matter, sir. I have pointed out how at various stages these imperfections were taken away and I say there would have been more to take away. I am perfectly confident that if Mr. St. Laurent and a minister of his government had this thing to do again there would be no abandonment of principle in this matter. We would have stuck to sound principles but there would have been improvements in the scheme.
The minister said the provinces would reassume their constitutional rights and responsibilities to impose and vary their tax levies as they saw fit. It is true that Ontario can impose them as it sees fit. It has imposed one to make it fit, because it could not get the "fit" it was promised by this government, as has been pointed out and as we all know. Even people from outside Ontario who come to the capital contribute to make up the deficit created by the failure of the expectations of Mr. Frost as a result of those large promises made in the spring of 1957.
What we have had here is a poor substitution for a system based upon principle, equity and justice, a system which on July 25, 1960 the Prime Minister solemnly promised would be continued. Everybody believed it was going to be continued. We have had a melange, a salad, politically concocted to suit the convenience of the present government, based on no principle whatever and based upon a "growth factor" that the government itself was unable to define for at least three weeks after it invented the phrase.
We have had in this scheme not merely a substitution of a vastly inferior arrangement for a fair and equitable one but also a repudiation of a solemn undertaking given by the Prime Minister to the premiers of the provinces in July 1960. I say that a measure of this kind does not deserve the support of the house and, for my part, it is a measure which I could not possibly support.


Mr. Waller Pitman (Peterborough):: Mr. Speaker, it was with some shock and disappointment that this afternoon we found
[Mr. Eicard.l

the Minister of Finance (Mr. Fleming) unwilling to say any more about the dominion-provincial relationship in fiscal matters which had been brought before the house some months ago. For a period of three months no discussion has taken place on this matter. Hon. members were given to believe and I think the Canadian people certainly believed that this was a matter in respect of which there would be considerable give and take, a matter in respect of which there would be negotiation and in respect of which the ideas and concepts of the provincial premiers would be taken into account. It was believed that their arguments and suggestions would be weighed against those of the Minister of Finance and his experts and that out of this amalgam, out of this long term period of thoughtful soul searching a new proposal would be brought forth. And yet, although only two of the ten provinces are going to be helped by this proposal and although seven of the provincial premiers have come out publicly against it, the Minister of Finance chooses to say nothing. One might almost believe that the words which appear at the base of the coat of arms of Canada might no longer be "a mare usque ad mare", but "take it or leave it".
We hoped there would be a wide discussion this afternoon and evening but there will be none and therefore it would seem that we are back at the point where we were last June when we discussed this at the resolution stage.
I am not going to take up the time of the house by reading what provincial premiers have said, by bringing forward statistics, by reading from editorials which appeared in newspapers across the nation. I simply wish to point out the three great principles which we believe these proposals violate. First, they will not over the years give provinces sufficient money to carry out their constitutional tasks. Second, they will not ensure that an individual living in any part of Canada will have equal opportunity for all the various services with every other individual in any other part of Canada. Finally, they are a negation of the principle that the dominion government must assume responsibility for fiscal and monetary planning at the national level which will ensure a full employment society and a better way of life.
As the Prime Minister took us back through history this afternoon and recounted with some validity, although I must say it was a misuse of history to some extent, that the party now in power had always had progressive views in the area of railways-as I say, it had a certain measure of validity-I could not help thinking of that area where the first

prime minister of this nation certainly had one blind spot, and that was in the area of federalism because Sir John A. Macdonald saw the provinces as merely large municipalities. Indeed, Sir John A. Macdonald would have been just as happy to see no provinces at all, no federal system at all, but rather a unitary state set up within the boundaries of this country. As a result, I think we have a kind of historic blind spot when it comes to dealing with the problem of federal-provincial relationships on the part of this government.
We in this group believe that there is a role for the provinces, and it is more than simply accepting conditional grants; it is more than simply carrying out the administration of federally initiated programs; it is more than simply a level of government which transfers money from above to below. We believe that the provinces can play a very dynamic role. In fact one might even suggest that the length of time we have sat in this chamber would indicate that perhaps the dominion government has bitten off more than it can chew. We have debated many things which will be redebated in all the provincial legislatures. While the provincial legislatures sit perhaps eight, ten weeks or 12 weeks, we sit from November to the following September. One might wonder whether a redivision not only of money but also of time, energy and talk might well be one subject to which we could put our minds.
To return to the first point, we believe that the twentieth century and all the problems of the twentieth century in an industrial society demand to quite an extent monetary and fiscal planning at the national level, which may not be enough. We are handicapped by giving over taxation responsibilities to the provincial governments. We feel that there must be some form of anti-cyclical budgeting. This is, of course, what we have been appealing for in vain over the last two or three years. But now that the recession is over this is the time when we shall need, and need very badly, what might be called a slowdown, possibly by means of fiscal and monetary policy, to stop a galloping inflation or a galloping expansion, and a realization that fiscal and monetary policy at the national level can accelerate our economy if such a recession should occur again. We feel that by giving over these powers in certain areas, as has been done by this system, the dominion government will be in a very serious position when it comes to adjusting the economy of this nation and finding a pattern whereby this nation's economy can find solutions in the coming days. This is the first reason and the first principle which we feel these dominion-provincial agreements violate.
90205-6-565
Dominion-Provincial Relations
The second, of course, and perhaps the most important is that of equalization. In spite of all the protests of the Minister of Finance and his experts, the form of equalization which is suggested by this system is not equalization at all, as has been stated already. He that hath will be given more.
It must be recognized that in a country the size of Canada, with its tremendous differences in resources, with the effect that national policies, tariffs and transportation will have on various people in various sections, some adjustment must be made. We believe that the adjustment of equalization that has been established over the last 20 years or so is one of the most valuable contributions that this nation has made to the whole concept of federalism throughout the world.
We believe-as I am sure all hon. members believe-that a man in no matter what part of Canada should have the same opportunity for the same kind of health services; that any young person should have the same opportunity for education; that all the opportunities for progress should be the same in each province. We believe that this change in the equalization system will not bring this about. All must share in the nation's wealth. This is where we feel this system very sadly indeed negates what has gone before. Surely, Mr. Speaker, during the 1930's this nation fought its way through with a constitutional division of powers and fiscal powers which made it very difficult indeed to deal with the unemployment and other dreadful problems of that era.
The fathers of confederation knew nothing of the difficulties of the twentieth century; but at the end of that period we came to a solution, and the Rowell-Sirois report stands as one of the great symbols of Canada's looking ahead at that point. Unfortunately the second world war came along just at the time when Canada would have taken a major step in the direction of equalization. But at least during the war we did make, I think, very important plans to adjust our policies to give a high degree of equalization.
The Rowell-Sirois report, of course, expected experts to be able to base the equalization on need. Whether that is possible I do not know. Whether we can determine the need of Newfoundland fishermen with respect to that of say the western farmer, and that of the British Columbia lumberman with that of the Ontario labourer. I do not know. I am not sure whether that can be done. But surely we have been moving in that direction, a direction which I do not think anyone in Canada wants to have reversed. That was the watershed of dominion-provincial relations, and it was with the greatest sadness and the

Dominion-Provincial Relations greatest concern that this party has seen a reversal of that trend since that most important watershed. We believe that it will have the most serious effects as the smaller provinces, or the less wealthy provinces, are forced to raise their taxes in areas which will be unpopular. We know, Mr. Speaker, that this is not a popular subject anyway. Dominion-provincial relations always are politically unpopular because they come right down to the pocketbook of the individual Canadian; they come right down to the most unpopular task which any government has to do, and that is collect taxes. But surely, in the enlightened age in which we hope we live this should not stand in our way in continuing the trend which has been moving in the last years toward greater and greater equalization.
As the poor provinces increase their corporation taxes, their succession duties, their sales taxes and so on, industry will move to those provinces which can afford not to increase them. We will have more concentration of industry in the rich provinces and the rich provinces will get richer and the poor provinces will become poorer in spite of any protests in the opposite direction. This is the second reason why this party believes that this is a backward step. We believe also that it will create a jungle of taxation. Someone called it the jungle of the 1930's.
We do believe that without at least some order in the tax collecting policy of this country, there will be chaos. We feel that this would be most unfortunate and most unjust.
The third and final reason we feel that this is a negation of government responsibility is that over the years the provinces will lose their power to carry out the real objectives of their existence. We deny that the system will provide more money to the provinces. The Minister of Finance says that in the last few years of recession the opportunities for taxation have decreased and so the opportunities of the federal powers to give money to the provinces have also decreased. Surely, Mr. Speaker, this situation exists as well in so far as the provinces are concerned. No doubt the provinces have had to increase their taxes and apply sales taxes or gasoline taxes whereas, according to the Minister of Finance, the federal government has been able to lower its taxes. The burden on the provinces, therefore, is even greater. We would hope that this government is not now, at this stage of its administration, deciding we are going to have a continued recession and that this
will continue to be a problem over the years in terms of adjusting our relationship with the provinces.
We feel, and I think very properly, that for these reasons the democratic party cannot support this particular proposal. We feel that it will emphasize the disparity in the levels of prosperity in the various provinces. For example, the 5 per cent increase will yield $2.50 per capita in Ontario but will yield only 60 cents per capita in Newfoundland. The Minister of Finance has decided he will say no more. He indicates that he will stand where he did last June. We have put our position and we feel this is unfair to the provinces. We feel it destroys equalization and, finally, we feel it is a negation of the responsibilities of the government. We cannot, therefore, possibly support this measure.
(Translation):


Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I listened with great attention to the remarks of the learned opposition members on this matter, and I was more particularly amused by the lengthy tirades of the hon. member for Bonavista-Twillingate (Mr. Pickersgill).
It is always exhilarating to hear him discourse because I might say that not only in his speeches, but also in his general behaviour, he seems to have the lyrical, and even the romantic touch.
He mentioned, for instance, that he would very much like to eavesdrop at the door when the premier of Manitoba and the right hon. Prime Minister (Mr. Diefenbaker) met with regard to those problems. But what was he doing when he was an active member of the former Liberal government?
Now, did he eavesdrop on the recriminations which not only the Canadian taxpayers, but the spokesmen of all provinces came to voice here in Ottawa, or did he rather at that time-as he seems unaware of such complaints-enjoy walking the famous dog Pat in the enchanting lanes of Ottawa?
We recall that, since 1945, the unyielding and centralizing attitude of the former Liberal government gave rise to many protests throughout the country. For instance, you only have to look briefly through some statements of provincial premiers, of which, to my mind, the oddest is one made in 1956 by the premier of Newfoundland, Mr. Smallwood, who, himself a Liberal threatened, under Liberal rule, to dissociate himself from the Canadian federation if Ottawa persisted in denying him fair treatment.

In 1956, Mr. Frost also stated the following:
That is the same government as the one which resorts to mean tactics in a field of taxation that belongs to Ontario as much as to Ottawa.
Here, in Ontario, in order to make ends meet, we must subject our people to a form of double taxation. It is a shame that things should come to this, at the very time when Nova Scotia announces a deficit and when New Brunswick is faced with financial problems.
During the same period, Mr. Fines, the provincial treasurer of Saskatchewan, had this to say:
The share of tax revenues allowed to the provinces by Ottawa, under the new agreements, is entirely inadequate to enable them to meet the costs of services of provincial and local governments.
Mr. Patterson, the treasurer of New Brunswick, concluded his budget speech by stating:
The basis of provincial taxes is too narrow to meet the increasing demands made upon the province and its municipalities in peacetime.
Not only did the previous Liberal government thrust on the people of Canada and the provincial governments intransigent and centralizing points of view, but in the application of the tax and allowances sharing, it acted quite unjustly, as it distributed the money according to a principle that the hon. member for Bonavista-Twillingate still wants to uphold today.
We also remember what happened in 1956 when certain provinces that had received too much money from Ottawa were forced, after having started to spend their provincial budgets, to return certain amounts to the federal government. Those poorer provinces are Newfoundland, Prince Edward Island, New Brunswick, Manitoba and Saskatchewan. On the other hand, the richer provinces-of course, they had received less- received more afterwards, even during the administration of their budgets for that year. All this shows that the complicated system initiated by the Liberal government had caused glaring injustice to the provinces and created confusion in public administration. It is for that reason that the people of Canada, conscious of the turn of events, acted positively in 1957 by showing the government that had initiated those unacceptable measures that it was time to come back to confederation, the sound ideas of the Canadian constitution, the British North America Act of 1867.
The new formula is an effort towards decentralization. In fact, it is under a false principle that one government collects taxes that are spent by another government. These 90205-6-565J
Dominion-Provincial Relations are not new statements, and I mean to stay above party politics. In fact, it was Sir Wilfrid Laurier who enunciated that principle in 1887 when he said that one government should not collect taxes to be spent by another government.
In 1930, the late Mr. Mackenzie King recalled the same principle. He then pointed out that it was a faulty principle which made it possible for one government to collect taxes and for another government, to spend the money through subsidies; however, this is what the previous Liberal government did progressively from 1945 to 1957. It seems that after 1945, the late Mr. Mackenzie King had forgotten the sincerity of his reference and had even opened the door for his successors to continue in this anticonstitutional direction.
The new scheme brought down by the present Progressive Conservative government is an effort towards decentralization. It seeks to let the federal government collect its own taxes and to let the provinces recover their fiscal freedom and receive their share of the taxes. It is therefore a return to the con-federative deal, to our Canadian constitution, for the Canadian provinces have powers which are eloquently set out in the British North America Act, especially in clause 92 thereof.
In fact, what matters is not only to have the powers, but also the financial ways and means required to exercise them; that is why the terms of clause 92 of the British North America Act, besides allocating the powers to the provinces, provide the financial means required for their application.
This new scheme is a return to the spirit of the Canadian constitution. The provinces will thus progressively recover their fiscal freedom. In this regard, may I briefly quote from the views of Mr. Gerard Filion, editor of the newspaper Le Devoir, as set out in an editorial which was published on February 25, 1961. This is what he had to say:
From a purely constitutional point of view, the Diefenbaker proposals are a definite improvement. The provinces, in any case those which value their freedom, should be satisfied.
A little farther, in the same editorial, Mr. Filion continues:
If the provinces want to recover some ground, they must not be content with claiming more money from Ottawa, but rather offer to accept greater responsibilities.
That is precisely the nature, the substance and the purpose of this new formula, to give the provinces of Canada their fiscal freedom. Of course, it is not complete, it is not perfect,
8956	HOUSE OF
Dominion-Provincial Relations but it is a step in the right direction. It is a lead, an open door away from centralization; it is a decentralizing action aimed at giving back to the provinces the fiscal freedom which they clamoured for, and, although some did not clamour for it, deep down they have always longed to be given back their responsibilities.
So what is the substance of that formula? After March 31, 1962, Ottawa will no longer pay any fiscal allowances to the provinces, but the provinces will be able to levy themselves, or through Ottawa, free of charge, their own share of the three fields of direct taxation.
Although the federal government agreed to reduce its share in the three fields of direct taxation on the basis of specific amounts each year during the next tax-sharing period, it volunteered to levy provincial taxes in those fields at any rate of taxation established by the provinces.
This means that the provinces will be able to decide on taxation rates superior or inferior to the federal withdrawal in those fields. The only reservation imposed by the federal government is that the provincial tax rate shall be determined according to the same definition of taxable revenue as under the federal Income Tax Act.
The federal government agreed to reduce its personal income tax rate by 16 per cent for the taxation year 1962, and by another 1 per cent each year until the federal withdrawal reaches 20 per cent. With regard to the corporation income tax, the federal government agreed to continue reducing its own corporation income tax by 9 per cent of the taxable corporation revenue. It is to be noted that the federal withdrawal in the corporation income tax field is not 9 per cent of the federal levies on corporation income, but 9 per cent of the taxable corporation income.
As the current federal corporation income tax currently levied-with the exception of the old age security tax-is 47 per cent for corporations with a taxable income over $35,000 and 18 per cent for corporations with a lesser income, the federal corporation income tax is about 41 per cent of the total taxable corporation income. If the federal withdrawal of 9 per cent is expressed as a percentage of the current federal income tax levy, rather than as a percentage of taxable revenue, the federal withdrawal will be approximately 22 per cent. In the first year of the new arrangements, the federal gov-vernment itself will levy 84 per cent, 78 per cent, and 50 per cent of its current revenue in those three fields and 80 per cent, 78 per cent and 50 percent in the last year of the new agreements.


The federal government has also agreed to maintain the equalization principle, but on a wider basis in accordance with the national average. Instead of equalizing payments to the provinces until they reach the yield of those three direct taxation fields in the two provinces where that yield was highest per capita, the federal government now offers the provinces an equalization payment equal to the difference between the yield of those three taxation fields per capita in each province, and the national average of the per capita yield of those three taxes, as well as an amount equal to the per capita amount by which provincial per capita revenue from natural resources has fallen below national average yield of provincial revenue from natural resources. In order to determine the amount to be attributed to the equalization factor based on natural resources, provincial revenue from natural resources per capita was established by taking 50 per cent of a moving scale for three years of provincial revenues from that source.
It has been decided to equalize provincial revenues from natural resources at 50 per cent of a moving scale over three years, for several reasons. As the provincial tax rates on natural resources and revenues derived from them vary from one province to the other and from one resource to the other, it was thought proper to consider those differences by using in the equalization formula 50 per cent rather than 100 per cent of revenues from resources. The three year average was used to avoid the marked differences sometimes shown in that source of revenue due to natural disasters or to the sale of resources.
In addition to equalization based on the national average, all the provinces are assured that they will not get less under the new tax rates of 16-9-50, 17-9-50, 18-9-50, etc., above and over equalization payments based on the national average than they would have received with the normal tax rates of 13-9-50, with equalization based on the average of the two provinces where yield was the highest in the previous year or on the average for the last two years of the current agreements, whichever may be the highest. In addition, the provinces which are under the national average according to the new formula have a guarantee that they will never get less in normal tax yield and equalization based on the national average than they would have received in the same year through an extrapolation of the agreements now in force.
This is the substance of this formula now before the house and examined from several angles.

It is obvious that this formula must show its worth. We must let it be implemented for some time, but we can already rest assured that it represents a real effort of this Conservative administration to decentralize and to gradually restore to the provinces their tax fields and their fiscal responsibilities. For we still want to believe in the existence and actuality of the constitution of 1867, we still want to have faith in the benefits of Canadian federalism. It must be recognized that this Canadian federalism of ours is based on an association of autonomous governments which in their activities, as described in articles 91 and 92 of the constitution, have their own powers and also their own means of financing in order to exercise such powers. And Canadian federalism clearly establishes that the various governments shall not be subjected one to another, but so co-ordinated. Those various governments, due to that federalist character of our constitution, must co-operate in common schemes, as it is stipulated, for instance, in article 95, as regards agriculture and immigration.
The new formula seeks a reconciliation after so many years of separation, after so many years of dislocation, for if we look back over the years we find that an agreement between various governments, in terms of our current economy, presents to our governments problems that are different from those of 1867. Because of particular circumstances resulting from an economic depression, or a war, governments have made concessions to each other; but after having benefited by concessions, the Liberal government maintained its hold, continued war in the fiscal field up to 1957, instead of realizing that the fiscal and economic war was over since 1945. Some have taken advantage of the confusion that happened in fiscal relations between the governments to interfere in fiscal fields that they did not own. The federal government took possession of taxation fields like personal income tax and corporation income tax and succession duties. Of course, it was not directly and absolutely forbidden by the constitution to impose direct taxation, because those three taxes I just mentioned are direct taxes; but the constitution states quite clearly that the federal government cannot levy taxes in those fields when the taxes are to be used for provincial purposes. What was wrong in the Liberal government's approach, was to seek to follow a centralizing policy with paternalism by distributing to the provinces certain amounts of money that it collected in fields that belonged to the provinces.
Dominion-Provincial Relations
There are also provinces which, during those years have entered indirect taxation fields, while those fields under section 91, paragraph 3, belonged to the federal government.
In this last instance, I mean indirect taxes on retail sales, taxes on security transfers, on meals, on theater tickets and on gasoline and oil. Those indirect taxes collected by the provinces, were called direct taxes by the privy council because they were collected directly from the final consumer without including them in the initial price.
It must be remembered that during all those constitutional years existed such chaos and difficulties, the strait-jacket mentioned tonight by the hon. member for Bonavista-Twillingate (Mr. Pickersgill). The result of those trends is that various governments intruded into taxation fields not clearly devolving upon them under the Canadian constitution. In addition the Liberal government was claiming unflinchingly for paternalistic reasons that it had to levy taxes, and through subsidies let provincial governments spend those amounts. That was meant to destroy the principle of responsible government which we have enjoyed for many years, because a responsible government, under the very spirit of our constitution, is the one which levies the taxes and spends them. It is accountable to the Canadian people for its tax collections and that responsibility does not devolve on any other government.
I welcome this new formula put forward by the Progressive Conservative government.
One might say, like the Conservative party of 1867 which was at the origin of the Canadian confederation, that it is the Conservative party of 1961 which, after so many difficulties, such confusion, and despite the acrobatics of the previous Liberal administration, makes serious, commendable and sincere efforts to return to the spirit of confederation.
Mr. Speaker, the legislation brought forward before the House of Commons as well as the topics discussed last year by the interested parties at the dominion-provincial conferences show that we are at a turning point of our constitutional venture, for we shall soon bring our constitution back home, and we shall then be able to amend it with the consent of the provinces. I take this opportunity to offer my warmest congratulations to the Minister of Justice (Mr. Fulton) for the efforts he has made, in conjunction

Dominion-Provincial Relations with all the provincial ministers to repatriate our Canadian constitution, so that we shall be able to say, not only in principle but also in fact, that we have at long last a sovereign constitution, that we are able to amend without having to refer to any other country. By amending our constitution, I do not mean that we shall upset it, but rather clarify it, define it in clearer terms, and correct the incongruities brought about through the years by governmental practices and interventions.
In this context, it can be said that the present Progressive Conservative government presides over this wonderful trend towards the very spirit of the confederation deal, for if the present central government needs resources and particular revenues to meet its ever-increasing commitments, it nevertheless remains deeply human, and understands that the autonomous and sovereign provinces must preserve their economic independence by maintaining the fields of taxation granted to them by the constitution. The passing of the legislation now before us is the only way to achieve this, and I shall be glad to vote for it because it opens the door to the confederation deal of 1867.
That is why the province of Quebec is in favour of it. She will not be content with aleatory and illusory powers; she wants financial powers so that the province can carry on its responsibilities.
In practice when the representatives of the provinces and of the dominion government meet together to amend the constitution, adjustments will be brought about. But there is a field where Quebec will allow no change whatsoever, that is, the field of higher education, whose importance is clearly set out in clause 93 of our constitution, which grants to the provinces exclusive jurisdiction over this matter.
Without any reflection on the approach of other provinces-we, French Canadians from the province of Quebec, respect the views of the other provinces, and that is probably part of our worth, for we love our country and have great respect for the views of our fellow citizens-we keep a jealous watch over our own prerogatives. That is why the province of Quebec remains steadfast in its attitude, no matter which party is in power. Whether it be at the time of the Hon. Messrs. Taschereau, Duplessis, Sauve or Barrette- and even under Mr. Jean Lesage-the premiers of Quebec unfailingly voice the intent and desire of a whole people living in this comer of our Canadian land, to retain absolute control in the field of education, for,

while we respect and admire other cultures, we are proud of our own, we want to remain masters of that culture, and direct it in our own way.
In order to do that, we need financial means; that explains the stand taken by the province of Quebec. Regardless of political parties, nothing is bad or evil and it is in that spirit that everything is done.
We respect the views of the other provinces, of our fellow citizens, but we demand that others understand us so that with the assistance of the present government, we may recover progressively the prerogatives which are dear to us in that field.
Last year, the present government reached an agreement with the late Hon. Mr. Sauve on a formula with respect to university grants. That was a step in the right direction and it enabled the province to collect the money which had accumulated.
We must always keep in mind that when the federal government takes a step, it must not favour only one province, but must introduce legislation which is suitable for all the provinces of Canada. It was understood that under that formula, the corporation income tax was to be raised by 1 per cent and that in return the corporations would benefit from an equal rebate with respect to the federal corporation income tax. Recently, I read in the newspapers-I did not have the chance to read the official correspondence-that the premier of the province of Quebec has refused to accept that formula on the grounds that he would accept the formula if it did not require the provinces to waive a certain surplus.
I would not say that the present premier of the province of Quebec is entirely wrong, but what I hold against him is that the formula in question, even though it was not perfect, was a step in the right direction since it was most advantageous to the universities of the province, while the latter were still getting direct assistance from the provincial government.
Hon. Mr. Lesage is now closing the door, probably for mere political considerations. I would not want to impute any motives to him, but I find his attitude most amazing. The autonomy he advocates is a negative one. He has not suggested any other formula, he has just closed the door and complicated matters. I wish he would follow the example of his predecessor, the Hon. Paul Sauve, and come up with an adequate formula of his choice.

I am sure that the present federal government will give close consideration to that formula. I hope the premier will act immediately so that the province may not suffer from any delay.
As for myself, I should like to make four suggestions to the Minister of Finance (Mr. Fleming) in this field of education. I suggest:
1.	That this government publicly state its intention of considering as coming exclusively within the provincial jurisdiction all representations to increase the payments now made by the government of Canada, either to provincial governments or to teaching institutions, by way of grants or assistance of any kind to education at all levels;
2.	That the government recognize the principle that, in due time, the control and distribution of the various kinds of assistance to education at present provided by the federal government should be returned to the provinces;
3.	That the solution to the problem be sought by possible inclusion of the federal educational grants in the equalization payments provided the provinces under the present tax arrangements, and that both these payments be amalgamated and considered together when the renewal of tax-sharing arrangements is discussed;
4.	That the foregoing be immediately implemented as far as university grants are concerned with the understanding, if need be, that the federal government shall be prepared-unless otherwise decided by the fiscal conference-to increase each year the equalization payments by the sum by which the university grants were to be increased, that is $1.50 per capita according to the increase in population.


Mr. J. P. Deschatelets (Maisonneuve-Rose-monl):: Mr. Speaker, this bill raises the question of federal-provincial tax relations. It is a complicated problem and I shall try to deal with it in the most objective way possible.
A moment ago, I listened with great interest to the hon. member for Bonavista-Twillingate (Mr. Pickersgill) who indicated that the new formula which forms the basis of this bill infringes the principle of the legislation introduced by the Right Hon. Mr. St. Laurent's administration and that the application of that formula will be detrimental to the great majority of the provinces.
The first point I wish to make is that, by introducing this bill, the Conservative government admits its inability to find a basis of agreement which would be more beneficial to the provinces than the previous one. The
Dominion-Provincial Relations government must be blamed, not only for the failure of the last federal-provincial conference, but especially for having held out, even before the conference even took place, promises which they knew or should have known they could not keep.
Speaking of promises, they were of two kinds. As a matter of fact, in the province of Quebec, our Conservative friends had come out against the equalization system as being contrary to the B.N.A. Act while, in the nine other provinces, the Prime Minister pledged to preserve it intact, as witness these lines from the Saskatoon Star-Phoenix for February 14, 1958, where in the Prime Minister is reported as stating:
(Text):
I stated that the equalization principle would be preserved. I say it again, and I repeat it now. The principle will be put into effect.
(Translation):
That is not what our friends, the Conservatives, were saying in the province of Quebec. At any rate, in both cases, this bill proves that the promises made in 1958 have been repudiated. The taxation fields have not been abandoned as the Quebec Conservatives promised it and the equalization formula has not been left unchanged as the Prime Minister had guaranteed.
Speaking of equalization, I feel it would be a good thing at this point to quote once more what Right Hon. Louis St. Laurent said, as reported in Hansard for January 12, 1956:
After examining many possible plans, we came to the conclusion that the most generally acceptable means of bridging this gap in Canada between the costs of essential provincial services and the wide variations in the tax potentials available to the provincial governments, would be to develop a pattern of tax equalization payments from the federal to the provincial governments.
With his customary modesty, Mr. St. Laurent went on:
We have never contended that these agreements were a perfect answer to the problems in our fiscal relationships but that is the best formula that has been devised yet-and the steps we are taking-will be conducive to the growth and development of all the provinces and of that spirit of solidarity from one ocean to the other.
The aim pursued by Mr. St. Laurent and his government was therefore to reduce the gap between the incomes which the various provinces derived from taxes so that all provinces and all taxpayers would become equal partners in the confederation.
It must be recognized, I think, that this formula has stood the test of time. In the critical post-war years, it enabled the provinces, which were faced with expansion prob-

Dominion-Provincial Relations lems, to develop more harmoniously and it reduced considerably the gap between the provinces' income.
Thanks to that formula, citizens of all provinces enjoyed the benefits of comparable services.
There is another advantage which is far from being the least. By removing the inequalities which were prejudicial to the poorer provinces, the St. Laurent formula largely contributed to a better understanding of national unity.
It will be recalled that the equalization principle was denounced as being contrary to the spirit and letter of confederation.
I should like to deal immediately with a misrepresentation which was repeated tonight by the hon. member for Sherbrooke (Mr. Allard), a myth which our Conservative friends have kept alive in the province of Quebec and which has no foundation either in law or in history. It was said repeatedly that the equalization formula was the result of a centralization which was contrary to the spirit and letter of the constitution. Consequently, it will be necessary for me, I think, to go back briefly to the sources. With the help of historical data, I will prove that not only were subsidies an integral part of the pact of 1867 and-I do mean an integral part of the 1867 pact, but that the payment of those subsidies was a paramount condition to the entry into confederation of lower Canada and the maritimes.
On page 5290 of volume 3 of Hansard of 1906, we can read section 64 of the Quebec resolutions, outlining the following proposal. I quote:
In consideration of the transfer to the general parliament of the powers of taxation, an annual grant in aid of each province shall be made, equal to 80 cents per head of the population-
And, as recorded on page 5291 of Hansard of March 25, 1907, the then prime minister, the Right Hon. Sir Wilfrid Laurier, stated:
But it is also a matter of history that if the resolutions were passed in a certain form, if the allowance to the provinces were arranged in a certain way, the reason, the paramount reason, was that without such an enactment and such an allowance the provinces would not have consented to enter confederation.
Now, here is a statement of policy, made in 1865, by Mr. Brown, one of the fathers of confederation:
I do not think I am being indiscreet in saying that, at the conference, I was most vocal in asking that all local expenses be paid by local governments through direct taxation; and that there were liberal-minded men, coming from all parts of the provinces, who would have liked
[Mr. Deschatelets.l

nothing better than to see such a proposal accepted. But, Mr. Speaker, there was an obstacle, an obstacle we often meet in this world, and that obstacle amounted to this: the impossibility in which we were to have the idea accepted. We would not have been able to rally the members of the conference, neither those of the existing provincial legislatures.
I am afraid, our friends in Lower Canada constitutionally object to direct taxation.
And, as can be seen on the same page, Sir Wilfrid Laurier added the following statement:
This is conclusive evidence. Lower Canada would never have entered confederation, if, by that very fact, it had been forced to resort to direct taxation to levy the required sums for the management of its local business. The same state of mind prevailed in the Maritime provinces. Nova Scotia, New Brunswick and Prince Edward Island would never have agreed to the federal pact if they had to resort to direct taxation as a consequence.
Well, Mr. Speaker, those are statements that need no comment. And I want to support those statements by quoting indisputable figures. For the fiscal year 1867-1868, 54 per cent of the total provincial revenue was derived from subsidies by the Canadian government. From 1868 to 1888, that percentage varied from year to year between 42 and 57 per cent. In the period from 1888 to 1909, the percentage of subsidies paid to the provinces by the federal government varied between 29 and 37 per cent, after which they gradually decreased down to the depression years, from 1930 to 1935, whereas in 1955, that percentage reached 46 per cent, and subsequently decreased.
Now, in the case of Quebec, we find that, for the fiscal year 1867-1868, 59.67 per cent of the total revenue of that province was derived from federal subsidies. During the first ten years of confederation, that percentage reached an average of 46 per cent. In the first 25 years after confederation, the percentage for Quebec was 37.5 per cent.
Well, Mr. Speaker, those figures are part of this country's history. I trust they will be read again and considered by our Conservative friends in Quebec who will then be able to revise some of the conclusions reached in their speeches with regard to federal-provincial fiscal matters. It is therefore a well established fact that, during the lifetime of the fathers of confederation, the provinces lived for the greater part on federal subsidies and that, moreover, neither Quebec nor the maritime provinces would have entered confederation without a guarantee that those subsidies would be paid by the federal government.


J.-H.-Théogène Ricard: Mr. Speaker, would the hon. member permit-


Jean-Paul Deschatelets: If my hon. friend would let me continue-


J.-H.-Théogène Ricard: Will the hon. member permit a question?


Jean-Paul Deschatelets: I shall answer your questions when I have finished my remarks. Did you rise on a point of order?


J.-H.-Théogène Ricard: I am asking whether you will permit a question?


Jean-Paul Deschatelets: Mr. Speaker, when I have finished my remarks-


J.-H.-Théogène Ricard: That's it. It would be too difficult for you to answer.
(Text):


The Acting Speaker (Mr. Chown):: Order. The hon. member for Maisonneuve-Rosemont has the floor and did not yield it in order to permit a question. This is his right and privilege.


J.-H.-Théogène Ricard: Because he is afraid.


The Acting Speaker (Mr. Chown):: Order. I do not think there should be reflections on what may be the motives for not accepting a question. There will be an opportunity at the end of his remarks, and he can accept or reject a question at that time if he pleases.


J.-H.-Théogène Ricard: We are used to his running away.
(Translation):


Jean-Paul Deschatelets: May I remind my hon. friend for St. Hyacinthe-Bagot that the Union Nationale convention in Quebec city is over and that this is Ottawa.


J.-H.-Théogène Ricard: Mr. Speaker, if we are to refer to the Union Nationale convention-


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


Jean-Paul Deschatelets: The purpose of this
reference to history is not to take up the defence-


J.-H.-Théogène Ricard: You are running away; you are afraid.


Jean-Paul Deschatelets: -of the system of grants to the provinces; quite the contrary, it is indeed to reply to several fallacious and erroneous arguments that are used too often to serve certain purposes.
One thing is sure though, it is that the fathers of confederation have accepted and the provinces have demanded in order to join the confederation, an equitable system of revenues, apart from direct taxation, to be able to efficiently fulfil their constitutional obligations.
Dominion-Provincial Relations
In the light of what I have just said, it is quite obvious that the equalization formula of the St. Laurent government was not contrary to the confederation, but more than this government's formula it encouraged solidarity between the provinces, solidarity that is vital to this great federal family.
Mr. Speaker, the new formula, which is the basis of this bill, is inferior to the former one and destroys the principle of revenue equalization because it does not seek to treat all provinces on an equal basis.
At the resolution stage, on July 11 last, we wondered on what basis the Minister of Finance made the following statement. I quote from page 7910 of Hansard:
The government has materially increased the return to the provinces from the existing tax sharing arrangements.
And we recall the lack of enthusiasm of the premiers of the various provinces and their expressed dissatisfaction. In fact, in February, the premier of British Columbia said:
I am disappointed that my province will not receive equalization payments.
On February 27, the premier of Alberta said that he was disappointed by this new arrangement.
The treasurer of Saskatchewan said that his province would not receive the amounts that it would have under the existing agreements.
The premier of Alberta said on April 8 that the new agreement presented certain features that he approved, but he added nevertheless that it was disappointing to see that his province would not receive any immediate increase.
The premier of Ontario said that this formula did not provide for his province anything like the $150 million additional yearly revenues he sought to obtain during the two day conference. And he added that his last resort was to levy new taxes.
We recall these words of the premier of Quebec:
Equalization has just been killed.
The New Brunswick premier said that the new fiscal proposals "would cause enduring harm". The premiers of Nova Scotia, Prince Edward Island and Newfoundland said they were satisfied and they accepted the formula but with some reservations.
That is how the new formula based on the average national revenues, on equalization, not from the top but from the middle, was received by the provinces.
After four years of conferences and negotiations, this cannot be called a great

Dominion-Provincial Relations success. In fact, it is a resounding failure if we look at the promises that were made. However, we have cause for comfort because the Conservative government has invited the provinces to levy additional revenues themselves by collecting their own taxes. As if that right had not always existed. That is what the province of Ontario has already done, because the provincial tax which became effective on September 1 is the first tangible result of the fiscal federal-provincial failure. And it is after the provinces had been invited to resort to taxes that the Secretary of State (Mr. Dorion) stated recently in a flight of oratory: "This is the end of limitations; it is a reversion to the spirit and the letter of the constitution".
I showed a moment ago that this assertion is historically and legally erroneous and unfounded.
When one thinks that the Canadian taxpayer is already overtaxed, this is an invitation which does not constitute a very glittering policy for a government on the eve of an election.
If the government had been consistent or had fulfilled the promises made in Quebec by its candidates, it would have given the various fields of taxation back to the provinces. On the contrary, since 1958, it has clung to them more than any other previous government. This government has piled up deficits, expenditures, loans and high interests.
It must be remembered that in 1958 we had a $38.5 million deficit, $609,500,000 in 1959, $413 million in 1960, $300 million in 1961 and in 1962, according to the Canadian tax foundation estimate, Canada will incur a deficit of approximately $700 million.
From 1957 to 1961, the unemployment insurance fund was drained of approximately $900 million.
During the same period, $165 million were used out of the national defence special fund.
Those amounts total $3,126 million, or an additional debt of $750 for each Canadian family and it is in that financially stifling atmosphere that this government urges the provinces to accept its invitation to levy additional taxes in their own jurisdiction.
With all these facts, I feel that this Conservative government now levies within the provinces a higher ratio of taxes than any previous government and I am tempted to ask myself: If this is centralization, where are the centralizers, if they are not sitting to your right, Mr. Speaker?
I stated that those fiscal proposals were made by this government to the provinces

which asked for a revision and a reconsideration thereof, but all the attempts to renew discussions were coolly turned down.
Let us admit that today we are voting for a five year failure. The dies are cast.
Mr. Speaker, I do not wish, in the course of my remarks, to limit myself to criticism of the government. I should now like to consider the problem in order to facilitate its solution. I sincerely believe that the tax collection agreements with the provincial governments are complex because we have there a problem which cannot be dealt with satisfactorily before the major problem is solved; and the major problem is the redistribution of taxation powers and the respective responsibilities of the federal and the provincial governments.
Thus, it seems that the time has come to reconsider the Canadian constitution in the light of its 94 years of existence, and that the problems which arise here, in Canada, in 1961 will have to be reconsidered.
To that purpose, we must first reach an agreement with the provinces about a method of amending our constitution. That is the first step to take. Then, the government and the provinces, around a conference table, will have to determine a redistribution, as accurate and flexible as possible, of the powers of taxation and the respective administrative responsibilities. Surely, this will be delicate and difficult work. It will be a matter of putting back the rights and privileges of 1867 in a more up-to-date framework, yet preserving and strengthening if possible all the clauses and powers pertaining to the rights, privileges and autonomy of the provinces.
That is, I think, the main problem that arises in Canada today. It will have to be solved without delay so that the development and economic and industrial growth of the provinces will not be hindered.
To deal with this important problem, it has become necessary for the government to establish a department of federal-provincial affairs. 1 believe each province should set up such a department. Quebec already has shown the way in this connection. It would then be the responsibility of these ministers, through continuous contacts and consideration of problems we have in common with the provinces, to prepare and submit a report which, in a year or two, could become the second constitutional charter of Canada.
If such a work were undertaken now, there would be no reason for not finding a solution within the next two or three years. By adopting such a method, the arrangement contained in the bill before the house could easily be limited to two or three years instead of extending to five.

For it is my feeling that, within a year or two, we will have an election and it is a distinct possibility that those who are now at the left of the Speaker will be the ones called upon to decide, within two years, on the constitution to be given this country.
Mr. Speaker, when I said a moment ago that the time had come to take a second look at taxation powers, I had in mind the attitude of the government of the province of Quebec on joint plans, which are closely related to taxation powers.
It will be remembered that in La Reforme of June 24, 1961, Mr. Lesage had this to say:
The sooner we can substitute to the joint plans our own plans based on revenue back from Ottawa, the better it will be for us.
he Devoir, on Tuesday, September 26, 1961, quoted the Quebec minister of natural resources, Mr. Rene Levesque, as saying:
It would be better if joint programs disappeared gradually.
I should like, Mr. Speaker, to comment on those two statements. I wish to make it clear at the outset that there is no contradiction between the stand taken by the Quebec government and that of the St. Laurent government which introduced the joint programs which were so beneficial to all Canadians, whether it be hospital insurance, the trans-Canada highway, or the roads to resources program. In my opinion, the attitude taken by the Quebec provincial government is what we have always considered as positive autonomy, because even though Quebec expresses that wish, nevertheless, until the powers are redistributed, it accepts all the money which is spent under those joint programs, for the simple reason that that money belongs partly to the taxpayers of all the provinces-Quebec taxpayers like all the others-who are entitled to benefit from all possible services. Those services they are paying for through their taxes, whether it be to the federal or to the provincial government.
There is no point in comparing that attitude to that of Mr. Duplessis of whom it was said that he was practising a negative autonomy. And now that the Duplessis regime is a thing of the past, and that we now have a Liberal government in Quebec, we can, by simply comparing, determine the advantages of a positive autonomy policy over a negative policy. Mr. Duplessis stood for the return of taxation rights but because of his failure to take any initiative, by systematically turning down-


J.-H.-Théogène Ricard: He is even greater in his grave than you are, alive and breathing.
Dominion-Provincial Relations


Jean-Paul Deschatelets: -hundreds of millions of dollars of which the people of Quebec have unfairly been deprived.
Hon. members will remember that at the last federal-provincial conference he attended he stated: "It is cash we want".
Mr. Speaker, hon. members will remember that in the strictly federal field, Mr. St. Laurent's administration obtained the power to amend our constitution in this country in 1950. For the reasons we know, it was impossible to proceed with the provinces and amend our constitution here in Canada as far as provincial and joint matters are concerned. Mr. St. Laurent was never given the opportunity to pursue his expressed aim, but I am happy to notice that the repatriation of our constitution has now been made possible as far a provincial and joint matters are concerned.
I wish to emphasize-the Minister of Justice (Mr. Fulton) has already done so-the remarkable work of the provincial minister of youth, Mr. Gerin-Lajoie, whose work, initiative and knowledge of constitutional matters enabled us to expect a solution in the near future.
Mr. Speaker, to sum up I would suggest this to the government first of all, the immediate creation of a department of federal-provincial affairs; second, obtaining the power to amend the constitution in this country in joint and provincial matters at the earliest opportunity; third, immediate consideration of taxation powers and mutual responsibility between the central government and the provinces, in order to bring the constitution up to date for solving the problems arising in Canada today. But, until those measures are taken, I subscribe to the remarks of the hon. member for Bonavista-Twillingate (Mr. Pickersgill), and I ask this government to come back to the formula of the St. Laurent government with regard to equalization payments, because if the bill remains in its present form, I shall have to vote against it.
(Text):


Mr. W. L. M. Creaghan (Westmorland):: Mr. Speaker, we have had a very interesting debate on the subject matter of Bill No. C-122. As hon. members know, this bill was introduced by the Minister of Finance (Mr. Fleming) in this house on July 12, just prior to the summer recess. In the ensuing weeks most of us have had an opportunity of studying the bill, reading the speeches of the various premiers during the series of conferences and trying to familiarize ourselves with the details of this involved piece of legislation.

Dominion-Provincial Relations
It is common knowledge that since confederation federal governments have always been obliged to lend financial aid and assistance to the provinces of Canada. This aid invariably took the form of special or conditional grants. In fact, prior to 1942 we had no evidence at all of unconditional grants. In 1941 Mr. Ilsley, the then minister of finance in his budget speech indicated that, whether or not there was an agreement, the provinces would have to vacate the personal and corporate fields of taxation for the duration of the war and one year thereafter. Consequently, in 1942 this House of Commons passed for the first time a bill authorizing unconditional grants and entitled the Dominion-Provincial Taxation Agreement Act. In 1947 a new bill was introduced and passed known as the Dominion-Provincial Tax Rental Agreements Act. It remained in effect for a period of five years and was replaced in 1952 by the second tax rental agreement act, namely the Tax Rental Agreements Act, 1952.
In 1942 the province of New Brunswick received the sum of $4.2 million. In 1947, under the first tax rental agreements act, the province of New Brunswick received a total of $13.3 million, $8 million from tax rental and approximately $5 million from equalization payments. During the 1952 to 1957 agreements New Brunswick's share increased from $13 million to $18.5 million.
Briefly speaking that is a summary of what New Brunswick received during the first three agreements. During the period of 1956 there was a series of conferences following which, for the first time, legislation was introduced entitled the tax sharing arrangements act instead of the tax rental agreements act. We all know the formula. It was 10-9-50 and New Brunswick's share averaged approximately $23.5 million. Very soon after the agreement came into effect a change of government took place in Canada and a dominion-provincial conference was held at Ottawa. I believe it was during the month of November, 1957. That conference was brought about as a result of strong criticism coming from the maritime provinces and Ontario with regard to the tax sharing arrangements act of
1957.	As a result, the formula was increased from 10-9-50 to a more generous level of 13-9-50. At that time agreement was also reached in principle on a special grant to the Atlantic provinces. As a result the tax sharing arrangements act was amended in 1958 in order to provide for an additional sum in round figures, of $100 million over a four year period to the four provinces in eastern Canada. As a result of the amendments in
1958,	New Brunswick's share-and I may say
[Mr. Deschatelets.l

I have been using New Brunswick figures throughout-increased from the questionably generous offer of the previous administration of $22.5 million to a figure in 1958 of $31.6 million or an increase of nearly $10 million which figure has continually increased during the years 1959 and 1960. Consequently I think it is very difficult, and indeed impossible, for Liberal speakers to try to convince anybody living in the Atlantic provinces that the formula and equalization basis introduced by the former St. Laurent administration was in any way at all fair or acceptable to the poorer provinces.
In fact, if one looks at the tables introduced by the Minister of Finance on July 11 one notices-dealing again only with New Brunswick-that in 1956-57 under unconditional grants that province received approximately $19 million and an additional $8.7 million under conditional grants, or a total payment in the year 1956-57 of less than $30 million. In the current year, instead of receiving less than $30 million the province of New Brunswick is receiving in excess of $60 million. This small province increased its source of revenue as a result of the change of administration to the extent of 100 per cent or, in round figures, from $30 million to $60 million annually.


John Whitney Pickersgill: Mr. Speaker, would the hon. gentleman permit me to ask him a factual question?


William Lawrence Marven Creaghan: Certainly.


John Whitney Pickersgill: Would the hon. gentleman say why he used the year 1956-57, which was under the old tax rental agreements, instead of 1957-58, which was the first year of the tax-sharing arrangements and which would show a very different picture?


William Lawrence Marven Creaghan: Yes, Mr. Chairman. I think that is a fair question, bearing in mind that the hon. member who has asked it is some sort of an expert on this subject. I used the figures of the year 1956-57 because they are official figures and appear in Hansard of July 11 at page 7919. If I had used the. figures of 1957-58, or the first year of the generous tax-sharing arrangements, the figures for New Brunswick would have amounted to a total of $34 million instead of $29 million.


John Whitney Pickersgill: A pretty substantial
increase.


William Lawrence Marven Creaghan: That is an increase of $5 million, as opposed to an increase of $30 million.

Most of the criticism from the Atlantic provinces comes from one source, the premier of New Brunswick. He has raised public objection to this new scheme. He calls it discriminatory, suggesting that it is against the interests of the poorer provinces. In order to strengthen Premier Robichaud's argument he complains about the large stuns going to be paid to the provinces of Nova Scotia, Prince Edward Island and Newfoundland. In other words, he is suggesting that these three other provinces in eastern Canada are not poor provinces; that New Brunswick is the only poor province in eastern Canada.
To strengthen his argument further he has recently endorsed the former policy of the Progressive Conservative government of New Brunswick in reference to the division of the Atlantic provinces adjustment grants. In Hansard last week a telegram was tabled from the premier of New Brunswick addressed to the Prime Minister (Mr. Diefen-baker). That telegram appears at page 8769 of Hansard of September 22 and reads as follows:
New Brunswick favours thirty-thirty-thirty-ten distribution of Atlantic provinces grant.
In other words, in one moment he criticizes part of the formula and the next moment completely endorses the distribution agreed to by the premiers of the four provinces in the year 1958. The main objection from New Brunswick seems to be that the new formula includes 50 per cent of provincial revenue from natural resources in the equalization formula. Yet it is a known fact that revenue from this source in the case of New Brunswick is substantially well below the national average. Therefore New Brunswick's share will be a larger percentage under the new equalization formula than if this provincial revenue were excluded from the formula. It is included to make certain that more fiscal aid will be given to the less prosperous provinces rather than the reverse under the formula introduced by the Liberal administration.
The province of New Brunswick has also complained, alleging that it objects to the inclusion of the Atlantic provinces adjustment grants in the equalization formula. These grants are not included and are separate and distinct according to the bill. In fact the Prime Minister assured Premier Robi-chaud of that policy in recent correspondence, particularly in a letter dated August 30 which was tabled in the house. The Prime Minister was dealing with the subject of the Atlantic provinces adjustment grants and the alleged inclusion of these grants in the equalization formula. I should like to quote one short paragraph from this recent letter:
Dominion-Provincial Relations
You refer at a number of points in your letter to the Atlantic provinces adjustment grants and contend that these grants should be kept separate from the other fiscal arrangements. In fact, the Atlantic provinces adjustment grants will continue to be a separate grant and the increase of $10 million in the total amount will benefit your province to the extent of $3 millisn per annum, which is the 30 per cent share of the additional grant of $10 million. This grant will be paid separately and is in no way connected with the basic equalization formula which ensures that New Brunswick will receive an equalization payment sufficient to raise revenues from the standard taxes and 50 per cent of the natural resource revenues to the per capita national average yield.
These grants are not a part of the equalization formula in any way, shape or form. Admittedly they are part of the guarantee formula. However, if one searches the records he will find that in the past under former agreements New Brunswick did not qualify or receive any benefit under the stabilization principle. It is my hope and the hope I believe of most people in New Brunswick who have an interest in its welfare, that at no time in the future will this province or any other province in Canada have to rely on the guarantee provisions. In fact, it is the hope of all concerned, premiers, politicians and interested citizens that none of the provinces in Canada will have to rely on the guarantee provisions.
In any case, the guarantee principle in no way hurts New Brunswick and the equalization formula contemplated in this bill is, if anything, in favour of all provinces which are in a less fortunate financial situation. In my opinion the objections raised by the premier of New Brunswick are hardly warranted. When the formula under the new bill is increased to the level of 20-9-50, which it will reach in the last year of the five-year agreement, New Brunswick stands to gain an additional $3 million approximately. This means that each and every year between 1962 and 1966 as the formula goes from 16 to 20 per cent in reference to personal income tax collections, this province, and every province in Canada, can expect its income to increase. It appears to me as though the province of New Brunswick, in a desperate move, is criticizing this bill in order that it may blame someone else for its own faulty administration. Perhaps it is trying to get sufficient additional money from Ottawa to carry out in full its election promises of 1960.


An hon. Member:: Liberal.


William Lawrence Marven Creaghan: Someone says "Liberal".
I am speaking of a Liberal administration which was elected in June, 1960. Some of the members who have taken part in this
8966	HOUSE OF
Dominion-Provincial Relations debate have suggested that there were not sufficient meetings, supporting some of the demands that the conference be reopened. It is common knowledge that there have been held in Ottawa three conferences at the premiers' level-in July, 1960, in October, 1960, and in February, 1961. In addition, there have been continuous meetings of the heads of departments of the provincial and federal governments. Nothing could be accomplished by a further conference.
The bill introduced is most generous. It is non-discriminatory in so far as the eastern provinces are concerned and I intend to do all I can to speak in its favour and to support it in principle at every opportunity.


Mr. John R. Matheson (Leeds):: The hon. member for Westmorland (Mr. Creaghan) has given this house his version of the reaction of the maritimes toward this bill. Perhaps it would be possible for me briefly to speak with respect to the reactions in the province of Ontario to Bill No. C-122. May I give some of the history as we see it here in Ontario?
On March 27, 1957, the present Minister of Finance (Mr. Fleming) was the guest of honour at Athens at the most important political meeting which was ever held in that village in Leeds county. The meeting place was filled to capacity and the hon. gentleman made a profound impression on the people who listened to the address, indeed some listened from outside the hall. There were two points which the hon. member for Eglinton pressed on the citizenry of that community. The first was that it was inconceivable that a government with a half billion dollar surplus should continue in this fashion and make so few tax cuts. The other point was that the provinces and in particular the municipalities in Ontario were in a critical position financially and that their situation had to be drastically remedied. This, he said, would come about if the people placed their confidence in a Conservative administration.
A few days after this there was a meeting on May 3, 1957 when the Prime Minister (Mr. Diefenbaker) said the municipalities were being pauperised while the federal government wallowed in surpluses the like of which have not been seen in Canadian history.


John Whitney Pickersgill: They certainly have not been seen since.


John Ross Matheson: Well, that was the end of
Canada's surpluses. The situation with respect to our provinces and municipalities has not been improved. At least, the situation in Ontario has certainly not been better.


When the minister was in Athens the situation with respect to our municipalities in Leeds county was critical. I say earnestly that the situation now is much more critical. May I give the comparative figures, the mill rates for three typical towns or villages in the area-Brockville, Gananoque and Smiths Falls. At the time the minister was speaking the mill rate for residents in Brockville was 63.5; today, it is 76. The industrial rate then was 69.5; it is now 81. In the prosperous little town of Gananoque in 1957 the residential mill rate was 50.4 whereas today it is 64.5. The industrial rate was 54.8, and today it is 69.8. In Smiths Falls in 1957 there was a common mill rate of 61 which has now been increased for residents to 66 and for industry to 70.5.
I read to the committee of this house last night a headline indicating that the municipality of Brockville was gravely concerned as to how it was going to meet its record relief payments. I pointed out that the situation was critical and I asked the committee to remember some of the undertakings to Ontario, which appears from everything we have heard to be one of the privileged parts of Canada. At a political meeting in Toronto on the evening of March 19, 1958, Premier Frost, introducing the present Prime Minister, said:
I have talked of $100 million. I am convinced as I never was before that we are going to produce a new deal.
The right hon. gentleman, for his part, said he was sure Mr. Frost would ask nothing more than fairness and justice. All those who have written on this subject to explain the reasons why Ontario supported this administration in the forceful way it did under the leadership of Mr. Frost say this support was one of the principal reasons why this administration enjoys the position it does on the treasury benches today. I say, as a representative of Leeds, that we have been let down, because the fact is that our provincial and municipal obligations are substantially more serious today in 1961 than they were in 1957.
May I read to the house the concluding sentence of an editorial which appeared in the Toronto Globe and Mail on June 5. It is called "The Crumbs from the Table", and reads:
The ordinary people of Canada in their communities across the country have reached a point where they cannot afford the present maldistribution of public revenues.
I know it is unfair to consider a bill such as this from a provincial or parochial standpoint and I do not intend to continue to do

so, but I think it is only reasonable that when we look at the results of this new taxsharing plan we should consider the overall picture. I find we have four provinces rejoicing in Conservative administrations and those four provinces have benefited by $22,223,000 as compared with last year. I find that the non-Conservative provinces are six in number and the net result to them is a loss of $4,306,000. I ask seriously whether or not there is any principle in this bill before us other than political expediency.
(Translation):
Mr. Speaker, I have listened carefully to the speech of the hon. member for Sherbrooke (Mr. Allard) who tried, in his remarks, to justify this new fiscal formula. After hearing him, I must come to the conclusion that the present arrangement is nothing but another mathematical confusion without any foundation and, also, that it is nothing else but a new measure to obtain a political advantage.
(Text):
Mr. Speaker, it is known that- (Translation):


J.-H.-Théogène Ricard: Would the hon. member allow me a question?


Mr. Maiheson:: When I have concluded my remarks.


J.-H.-Théogène Ricard: It would be too tiresome to answer now.


Mr. Loiselle:: You are too ignorant.


Hédard-J. Robichaud: Why don't you go back to Quebec for your convention?


Mr. Caron:: The Quebec convention is over. (Text):


Neil Alexander Matheson: Mr. Speaker, there has been some reference-


J.-H.-Théogène Ricard: It is too tiresome now for the hon. member to answer my question. The hon. member cannot answer me, is that it?


Neil Alexander Matheson: Mr. Speaker, reference has been made-


J.-H.-Théogène Ricard: I am speaking to the hon. gentleman who has the floor, not to the hon. members who interject. It is easy to attack a man who is not here.


Neil Alexander Matheson: The hon. member for Westmorland, Mr. Speaker, referred to some of the material contained in the report of the proceedings of the dominion-provincial conference, 1960. I wish to refer the house to three points that were made at that conference by Mr. Frost, the premier of Ontario, who has
Dominion-Provincial Relations been concerned about the problem since 1957. On July 25, 1960 as reported at page 18 of the report of proceedings to which I referred, Mr. Frost said:
The crux of the problem Is this: the provinces and the municipalities must have additional revenues.
He went on to say:
I submit, in the light of the expansion occurring in Ontario, and indeed elsewhere, that the present division of these taxes is unrealistic.
He also said:
It is entirely unfair that the provinces and their municipalities should be faced with the incidence of growth to which I have referred-
We know the extent of Mr. Frost's disappointment and we know the circumstances of his departure from public life. I point out that the needs of the next five years will be greater than and different from what we have witnessed to date. The offer presented by the Minister of Finance, who just a few years ago was talking about abundant surpluses and a new distribution of revenue, simply cannot meet these altered conditions.
An article by Mr. Charles King which appeared in the Ottawa Citizen on February 24, 1961 quoted Mr. Frost as having stated:
-by 1966 we will still not have reached the minimum requirement of 1956.
I believe that all hon. members are concerned about this problem. The fact is that Canada has become an extremely highly taxed country. It is obvious that if taxes go to one source they cannot go to other sources. I cannot determine what proportion of our dollar is represented by taxation divided among the federal government, the provinces and the municipalities but I read that something over 40 cents on each dollar is represented by taxes both direct and indirect. In our municipalities in Ontario we are worried over the fact that mill rates increase year by year, in some instances accompanied by decreasing services. Surely the only basis on which this unfortunate situation can be rectified is on a basis of having the financial affairs of the country conducted in a manner that has due regard to the development and prosperity of the country and one that avoids deficits year after year replacing them with surpluses from which we can do the things we require to do to ensure that our citizens live properly and well enjoying a high degree of prosperity.
It is not enough for hon. members of the opposition to rise and protest that what is being done by the present administration is inadequate and politically expedient. It is not enough for us simply to say that this

Dominion-Provincial Relations administration has tailed to fulfil its glowing election promises. We have to demonstrate and affirm that we would do things better and according to some principle.
The hon. member for Bonavista-Twillingate speaking on behalf of this party outlined the historical background of the principles of equalization and stabilization. He demonstrated that there was a sound principle at the root of the system introduced by the former administration.
The words I wish to place on Hansard in summarizing our position and in concluding these remarks are those adopted at the Liberal rally held in Ottawa last January. I can attest that much research, study and thought attended the deliberations held at that rally.


J.-H.-Théogène Ricard: You can say that again.


John Ross Matheson: I conclude with these words:
-the Canadian constitution was fashioned to provide a balance that gives effective central government in matters requiring national decision, and, in all other matters, full scope for provincial and local diversity. Liberalism will continue to uphold provincial rights and the traditions and customs which they express and guard.


William Heward Grafftey: I thought the hon. member had made his maiden speech.


John Ross Matheson: Does the hon. member for Brome-Missisquoi have a question?


J.-H.-Théogène Ricard: The hon. member will not accept questions until he has finished. He never wants to answer my questions.


William Heward Grafftey: I merely point out that the hon. gentleman is doing a lot of talking considering that it is his first term in the house.


William Moore Benidickson: He is no longer "nouveau".


Mr. Speaker:: Order. There have been many impromptu speeches made by hon. members speaking from their seats and sometimes from the seats of other hon. members. I trust that hon. gentlemen will allow the hon. member who has the floor to conclude his speech.


John Ross Matheson: I continue:
The Liberal party believes Canada cannot be prosperous unless every part of it enjoys prosperity. To achieve that purpose the financial resources of the nation must be available to provide both the national government and provincial and municipal governments with adequate revenues without imposing undue tax burdens.-The Liberal party therefore upholds the principle of equalization in federal-provincial tax arrangements. All provinces should receive the same revenue, per head of population, from the taxes shared with the federal government. In this way, Canadians everywhere receive an equal share of the revenues derived from national economic activities.-We

condemn the Conservative proposal to destroy equalization and return to the pre-war conditions under which Canadians in different provinces had to pay different rates of tax-
I submit, Mr. Speaker, that is precisely the effect of Bill No. C-122. I continue:
For a sound economy, it is important to retain the principle of equalization and also the related principle of stabilization. Tax revenues fall off if we encounter a recession in business. The federal government should protect the provinces against any serious decline in their revenues from the shared taxes.
(Translation):


Mr. J. N. Tremblay (Roberval):: Mr. Speaker, the hon. member for "Chateau-Maisonneuve" (Mr. Deschatelets) prophesied a moment ago some rather dark days for our country and our province when he stated that his party would soon be brought back to power. I cannot, of course, stop this gloomy Cassandra from prophesying as he pleases, but it seems to me that past experience should prompt the hon. member for Maisonneuve-Rosemont to ask him-himself what would be the reaction of the people of this country should as tragic an event as the one he has just forecast become a reality. While listening to his complaints about the present situation and the blame he was putting on the Conservative government with regard to this tax-sharing issue, I was casting my mind back on all the events which, since 1939, have marked Canadian politics and shaken the very foundations of our constitution. Naturally, I connect those events with the presence of a Liberal government at the head of the country. That is why I find it difficult to believe the remarks made in this house by all Liberal members, and that is why I found it difficult to credit with sincerity a political party which was, for so many years, the contented promoter of constitutional disintegration.
Mr. Speaker, I should like to make one or two very short remarks on the general problem involved in the bill before us.
First of all, I should like to remind hon. members of a fact which I feel is basic, and that is that the stand of the members from Quebec on the problem involved in this bill cannot necessarily be the same as that of the members from the other provinces. I will probably surprise nobody by repeating, after a great many leaders, that the province of Quebec is not a province like the others and that, for this very reason, it cannot take the same stand as the other provinces on certain issues. Quebec has to consider carefully and circumspectly all constitutional proposals, for these proposals often

contain important factors for the future of the people who make up the majority in the province of Quebec.
I am not an expert on constitutional matters, far from it, Mr. Speaker. Therefore, I could not pretend to be well informed nor go into technical details on the various solutions which can be brought to our constitutional problems. However, having studied very recent history, that is the history of the last 15 years, I realize that a change has come about since 1958 which leads us to believe-and I am one of those who believe it-that our constitutional problems are being given a solution more in line with the general principles of our Canadian constitution.
A moment ago, the hon. member for Maisonneuve-Rosemont referred to the so-called autonomist spirit which is typical of the Liberal party. Frankly, in all that transpired from 1939 to 1957, I find very few signs of that spirit which, according to the hon. member for Maisonneuve-Rosemont, gives inspiration to the Liberal party, because, as I just pointed out, that party seems to have been the most frantic promoter of our constitutional disintegration by suggesting, year after year, steps designed to progressively take away from the provinces the rights and the privileges granted to them by the constitution.
I should like to recall a fact in order to show that the Liberal party has been far from being an autonomist party but that it
Business of the House
has rather strived against this idea, this principle and this reality of provincial autonomy written into the Canadian constitution. And I should like to bring forward the problem of the invasion, due to the schemings of the Liberal party, of the field of education by the central government.
Mr. Speaker, may I call it 10.30?
(Text) :



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business will be for tomorrow.


Gordon Minto Churchill: Mr. Speaker, the first matter to come before the house will be the report of the committee on procedure of the House of Commons which was tabled today. It will be printed in Votes and Proceedings so that members may study it. Since the report is a unanimous one of an all party committee chaired by Mr. Speaker himself, perhaps there will be no debate on the proposals, in view of the fact that the suggestions therein contained are applicable to the next session of parliament on a trial basis.
The main item of government business will be a continuation of the debate on Bill No. C-122, the dominion-provincial tax collection agreement, followed by the estimates of the Department of Finance, followed by the estimates of the Department of Transport.
At 10.32 p.m. the house adjourned, without question put, pursuant to special order.



APPENDIX &quot;A&quot;


[Stage Direction]
September 22, 1961
The following is submitted by the United States of America as a proposed declaration on disarmament for consideration by the general assembly of the United Nations as a guide for the negotiation of a program for general and complete disarmament in a peaceful world.
Declaration on Disarmament:
A Program for General and Complete Disarmament in a Peaceful World
The nations of the world,
Conscious of the crisis in human history produced by the revolutionary development of modern weapons within a world divided by serious ideological differences;
Determined to save present and succeeding generations from the scourge of war and the dangers and burdens of the arms race and to create conditions in which all peoples can strive freely and peacefully to fulfil their basic aspirations;
Declare their goal to be: A free, secure, and peaceful world of independent states adhering to common standards of justice and international conduct and subjecting the use of force to the rule of law; a world where adjustment to change takes place in accordance with the principles of the United Nations; a world where there shall be a permanent state of general and complete disarmament under effective international control and where the resources of nations shall be devoted to man's material, cultural, and spiritual advance;
Set forth as the objectives of a program of general and complete disarmament in a peaceful world:
(a)	The disbanding of all national armed forces and the prohibition of their re-establishment in any form whatsoever other than those required to preserve internal order and for contributions to a United Nations peace force;
(b)	The elimination from national arsenals of all armaments, including all weapons of mass destruction and the means for their delivery, other than those required for a United Nations peace force and for maintaining internal order;
(c)	The establishment and effective operation of an international disarmament organization within the framework of the United Nations to ensure compliance at all times with all disarmament obligations;
(d)	The institution of effective means for the enforcement of international agreements, for the settlement of disputes, and for the maintenance of peace in accordance with the principles of the United Nations.
Call on the negotiating states:
(a)	To develop the outline program set forth below into an agreed plan for general and complete disarmament and to continue their efforts without interruption until the whole program has been achieved;
(b)	To this end to seek to attain the widest possible area of agreement at the earliest possible date;
(c)	Also to seek without prejudice to progress on the disarmament program agreement on those immediate measures that could contribute to the common security of nations and that could facilitate and form a part of that program.
Affirm that disarmament negotiations should be guided by the following principles:
(a)	Disarmament shall take place as rapidly as possible until it is completed in stages containing balanced, phased and safeguarded measures, with each measure and stage to be carried out in an agreed period of time.
(b)	Compliance with all disarmament obligations shall be effectively verified from their entry into force. Verification arrangements shall be instituted progressively and in such a manner as to verify not only that agreed limitations or reductions take place but also that retained armed forces and armaments do not exceed agreed levels at any stage.
(c)	Disarmament shall take place in a manner that will not affect adversely the security of any state, whether or not a party to an international agreement or treaty.
(d)	As states relinquish their arms, the United Nations shall be progressively strengthened in order to improve its capacity to assure international security and the peaceful settlement of differences as well as to facilitate the development of international cooperation in common tasks for the benefit of mankind.

(e)	Transition from one stage of disarmament to the next shall take place as soon as all the measures in the preceding stage have been carried out and effective verification is continuing and as soon as the arrangements that have been agreed to be necessary for the next stage have been instituted.
Agree upon the following outline program for achieving general and complete disarmament:
Stage I
A.	To establish an international disarmament organization:
(a)	An international disarmament organisation (IDO) shall be established within the framework of the United Nations upon entry into force of the agreement. Its functions shall be expanded progressively as required for the effective verification of the disarmament program.
(b)	The IDO shall have: (1) a general conference of all the parties; (2) a commission consisting of representatives of all the major powers as permanent members and certain other states on a rotating basis; and (3) an administrator who will administer the organization subject to the direction of the commission and who will have the authority, staff, and finances adequate to assure effective impartial implementation of the functions of the organization.
(c)	The IDO shall: (1) ensure compliance with the obligations undertaken by verifying the execution of measures agreed upon; (2) assist the states in developing the details of agreed further verification and disarmament measures; (3) provide for the establishment of such bodies as may be necessary for working out the details of further measures provided for in the program and for such other expert study groups as may be required to give continuous study to the problems of disarmament; (4) receive reports on the progress of disarmament and verification arrangements and determine the transition from one stage to the next.
B.	To reduce armed forces and armaments:
(a)	Force levels shall be limited to 2.1 million each for the U.S. and U.S.S.R. and to appropriate levels not exceeding 2.1 million each for all other militarily significant states. Reductions to the agreed levels will proceed by equitable, proportionate, and verified steps.
(b)	Levels of armaments of prescribed types shall be reduced by equitable and balanced steps. The reductions shall be accomplished by transfers of armaments to depots supervised by the IDO. When, at specified periods during the stage I reduction process, the states party to the agreement have agreed that the armaments and armed
forces are at prescribed levels, the armaments in depots shall be destroyed or converted to peaceful uses.
(c)	The production of agreed types of armaments shall be limited.
(d)	A chemical, biological, radiological (CBR) experts commission shall be established within the IDO for the purpose of examining and reporting on the feasibility and means for accomplishing verifiable reduction and eventual elimination of CBR weapons stockpiles and the halting of their production.
C.	To contain and reduce the nuclear
threat:
(a)	States that have not acceded to a treaty effectively prohibiting the testing of nuclear weapons shall do so.
(b)	The production of fissionable materials for use in weapons shall be stopped.
(c)	Upon the cessation of production of fissionable materials for use in weapons, agreed initial quantities of fissionable materials from past production shall be transferred to non-weapons purposes.
(d)	Any fissionable materials transferred between countries for peaceful uses of nuclear energy shall be subject to appropriate safeguards to be developed in agreement with the IAEA.
(e)	States owning nuclear weapons shall not relinquish control of such weapons to any nation not owning them and shall not transmit to any such nation the information or material necessary for their manufacture. States not owning nuclear weapons shall not manufacture such weapons, attempt to obtain control of such weapons belonging to other states, or seek or receive information or materials necessary to their manufacture.
(f)	A nuclear experts commission consisting of representatives of the nuclear states shall be established within the IDO for the purpose of examining and reporting on the feasibility and means for accomplishing the verified reduction and eventual elimination of nuclear weapons stockpiles.
D.	To reduce strategic nuclear weapons
delivery vehicles:
(a)	Strategic nuclear weapons delivery vehicles in specified categories and agreed types of weapons designed to counter such vehicles shall be reduced to agreed levels by equitable and balanced steps. The reduction shall be accomplished in each step by transfers to depots supervised by the IDO of vehicles that are in excess of levels agreed upon for each step. At specified period during the Stage I reduction process, the vehicles that have been placed under supervision of the IDO shall be destroyed or converted to peaceful uses.
[Stage Direction]
(b)	Production of agreed categories of strategic nuclear weapons delivery vehicles and agreed types of weapons designed to counter such vehicles shall be discontinued or limited.
(c)	Testing of agreed categories of strategic nuclear weapons delivery vehicles and agreed types of weapons designed to counter such vehicles shall be limited or halted.
E.	To promote the peaceful uses of outer
space:
(a)	The placing into orbit or stationing in outer space of weapons capable of producing mass destruction shall be prohibited.
(b)	States shall give advance notification to participating states and to the IDO of launchings of space vehicles and missiles, together with the track of the vehicle.
F.	To reduce the risks of war by accident,
miscalculation, and surprise attack:
(a)	States shall give advance notification to the participating states and to the IDO of major military movements and manoeuvres, on a scale as may be agreed, which might give rise to misinterpretation or cause alarm and induce counter-measures. The notification shall include the geographic areas to be used and the nature, scale and time span of the event.
(b)	There shall be established observation posts at such locations as major ports, railway centres, motor highways, and air bases to report on concentrations and movements of military forces.
(c)	There shall also be established such additional inspection arrangements to reduce the danger of surprise attack as may be agreed.
(d)	An international commission shall be established immediately within the IDO to examine and make recommendations on the possibility of further measures to reduce the risks of nuclear war by accident, miscalculation, or failure of communication.
G.	To keep the peace:
(a)	States shall reaffirm their obligations under the UN Charter to refrain from the threat or use of any type of armed force- including nuclear, conventional, or CBR- contrary to the principles of the UN Charter.
(b)	States shall agree to refrain from indirect aggression and subversion against any country.
(c)	States shall use all appropriate processes for the peaceful settlement of disputes and shall seek within the United Nations further arrangements for the peaceful settlement of international disputes and for the codification and progressive development of international law.
(d)	States shall develop arrangements in stage I for the establishment in stage II of a UN peace force.
(e)	A UN peace observation group shall be staffed with a standing cadre of observers who could be dispatched to investigate any situation which might constitute a threat to or breach of the peace.
Stage II
A.	International disarmament organization:
The powers and responsibilities of the IDO shall be progressively enlarged in order to give it the capabilities to verify the measures undertaken in stage II.
B.	To further reduce armed forces and armaments:
(a)	Levels of forces for the U.S., U.S.S.R., and other militarily significant states shall be further reduced by substantial amounts to agreed levels in equitable and balanced steps.
(b)	Levels of armaments of prescribed types shall be further reduced by equitable and balanced steps. The reduction shall be accomplished by transfers of armaments to depots supervised by the IDO. When, at specified periods during the stage II reduction process, the parties have agreed that the armaments and armed forces are at prescribed levels, the armaments in depots shall be destroyed or converted to peaceful uses.
(c)	There shall be further agreed restrictions on the production of armaments.
(d)	Agreed military bases and facilities wherever they are located shall be dismantled or converted to peaceful uses.
(e)	Depending upon the findings of the experts commission on CBR weapons, the production of CBR weapons shall be halted, existing stocks progressively reduced, and the resulting excess quantities destroyed or converted to peaceful uses.
C.	To further reduce the nuclear threat:
Stocks of nuclear weapons shall be progressively reduced to the minimum levels which can be agreed upon as a result of the findings of the nuclear experts commission; the resulting excess of fissionable material shall be transferred to peaceful purposes.
D.	To further reduce strategic nuclear weapons delivery vehicles:
Further reductions in the stocks of strategic nuclear weapons delivery vehicles and agreed types of weapons designed to counter such vehicles shall be carried out in accordance with the procedure outlined in stage I.

E.	To keep the peace:
During stage II, states shall develop further the peace-keeping processes of the United Nations, to the end that the United Nations can effectively in stage III deter or suppress any threat or use of force in violation of the purposes and principles of the United Nations:
(a)	States shall agree upon strengthening the structure, authority, and operation of the United Nations so as to assure that the United Nations will be able effectively to protect states against threats to or breaches of the peace.
(b)	The UN peace force shall be established and progressively strengthened.
(c)	States shall also agree upon further improvements and developments in rules of international conduct and in processes for peaceful settlement of disputes and differences.
Stage III
By the time stage II has been completed, the confidence produced through a verified disarmament program, the acceptance of rules of peaceful international behavior, and the development of strengthened international peace-keeping processes within the framework of the UN should have reached a point where the states of the world can move forward to stage III. In stage III progressive
controlled disarmament and continuously developing principles and procedures of international law would proceed to a point where no state would have the military power to challenge the progressively strengthened UN peace force and all international disputes would be settled according to the agreed principles of international conduct.
The progressive steps to be taken during the final phase of the disarmament program would be directed toward the attainment of a world in which:
(a)	States would retain only those forces, non-nuclear armaments, and establishments required for the purpose of maintaining internal order; they would also support and provide agreed manpower for a UN peace force.
(b)	A UN peace force, equipped with agreed types and quantities of armaments, would be fully functioning.
(c)	The manufacture of armaments would be prohibited except for those of agreed types and quantities, to be used by the UN peace force and those required to maintain internal order. All other armaments would be destroyed or converted to peaceful purposes.
(d)	The peace keeping capabilities of the United Nations would be sufficiently strong and the obligations of all states under such arrangements sufficiently far reaching as to assure peace and the just settlement of differences in a disarmed world.


[Stage Direction]
Amounts Paid by the Federal Government under the Unemployment Assistance Act by Province during each year from the Inception of the Act to March 31, 1961 (l)
Province	1956-57	1957-58	1958-59	1959-60	1960-61t	$	$	$	$Newfoundland	
2,373,125	1,787,894	3,040,767	3,670,091	2,832,548Prince Edward Island	
96,139	73,010	67,726	113,096	110,951Nova Scotia	-	26,046	298,458	654,039	1,609,453New Brunswick	
28,845	42,237	180,614	351,252	1,396,476Quebec	-	-	-	7,790,530	14,164,527Ontario	-	2,135,460	9,325,564	14,028,523	12,916,311Manitoba	
805,375	750,681	1,604,219	2,380,231	3,276,825Saskatchewan	
665,969	626,680	1,420,168	1,828,313	2,269,710Alberta	-	-	1,858,633	2,071,494	2,555,920British Columbia	
3,906,115	2,791,117	6,136,935	7,245,439	10,313,342Northwest Territories	-	-	-	33,418	20,413Yukon	-	-	-	53,610CANADA	
7,875,568	8,233,125	23,933,534	40,166,426	51,520,085
0) The amounts shown are the federal treasury payments made during each fiscal year. They relate in each case to claims submitted by the provinces for months prior to the fiscal year and to claims for the year which were submitted and paid prior to March 31.
[Stage Direction]
Wednesday, September 27, 1961