1962-02-15

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Government House, Ottawa,
15 February, 1962
Sir:
I have the honour to inform you that the Honourable Robert Tasehereau, judge of the Supreme Court of Canada, acting as Deputy to His Excellency the Governor General, will proceed to the Senate chamber the 15th February, 1962, at 5.45 p.m., for the purpose of giving royal assent to certain bills.
I have the honour to be, sir,
Your obedient servant, Esmond Butler
Secretary to the Governor General



RAILWAYS, CANALS AND TELEGRAPH LINES FIRST AND SECOND REPORTS OF STANDING COMMITTEE  CONCURRENCE IN FIRST REFORT

[Stage Direction]
Mr. W. M. Howe (Wellingion-Huron) presented the first and second reports of the standing committee on railways, canals and telegraph lines, and moved that the first report be concurred in.
Motion agreed to.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, my reply has now been transmitted to the message from Chairman Khrushchev in which he proposed that heads of government should attend the opening meetings of the disarmament commission when it begins its work in Geneva on March 14. I should now like to table that reply so that hon. members will have it before them.
I made clear to Mr. Khrushchev that I welcomed the spirit in which his proposal appears to have been made, since it would seem to indicate that the Soviet union attaches importance to the forthcoming disarmament negotiations. The Canadian government believes that this conference must be
the occasion for the greatest effort which the nations of the world have yet made toward a solution of the pressing problems in the disarmament field. Fortunately a good basis has been laid for the conference in the form of an agreement on general principles. The first task will be to convert these principles into practical measures of disarmament.
In my reply to Mr. Khrushchev I have said I believe the foreign ministers should be present at the outset to give additional direction and impetus to the work of the conference.
As these problems affect all countries, and depend in some degree on all countries for their solution, there is a significant role in these discussions for the middle and smaller powers. The difficult problems requiring solution may in the end yield only to direct conversation among the heads of government.
I have therefore repeated to Chairman Khrushchev what I told the house last Monday, namely that whenever the presence of heads of government is considered to be advantageous, I should personally be ready to attend such a meeting. Should efforts for disarmament meet with even partial success, then a measure of confidence will have been established which might enable other critical problems between east and west to be dealt with.


Mr. Speaker:: Has the Prime Minister leave to table the document referred to?


Some hon. Members:: Agreed.


Mr. Speaker:: Is it suggested that the document be printed or tabled?


John George Diefenbaker: Tabled.


Hon. L. B. Pearson (Leader of the Opposition):: I think all hon. members in the house will support the position of the Prime Minister and the government in respect of this matter, in emphasizing in the first place the importance of the conference in question and the desirability of doing everything possible at the conference to make progress toward peace rather than allowing it to become merely an exercise in propaganda. I think also the Prime Minister was wise in his emphasis that at the early stages of a conference of this kind it is better to leave these matters in the hands of the ministers particularly concerned. I notice Mr. Khrushchev refers to them as bureaucrats; I am sure

Inquiries of the Ministry that the Secretary of State for External Affairs will deny that suggestion. Then if any progress is made at the foreign ministers level, and we all hope that there will be progress, that would be the time to consider elevating, if you like, the representations to the heads of government level.
But as the Prime Minister has pointed out, surely it is important to get ahead with the business of disarmament, and at this commission of 18, with certain principles to guide it which have been agreed upon at the United Nations, there is now an opportunity for progress. Then if and when you get results, that will be the time to bring in the heads of government to continue and perhaps to finalize that progress.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, the members of this group welcome the spirit and tenor of the Prime Minister's letter to Premier Khrushchev. We extend our best wishes to the Secretary of State for External Affairs and all those who are associated with him. We wish them every success in all they attempt in this work of first importance.



REPORTED DEFAULT BY RED CHINA

[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: I wish to direct a question to the Prime Minister. Is it a fact, as reported in today's Globe and Mail, that the Chinese government has already defaulted on one of the terms of the wheat agreement by not taking 32,000 tons of flour from Canadian millers by November 30, 1961?


John George Diefenbaker: Mr. Speaker, there has been no default.


Lionel Chevrier: Mr. Speaker, in the light of the article and the discussions that have taken place already, I wonder whether the Prime Minister would not throw some light on the terms of the agreement, in view of the fact that one of the officials of the Canadian wheat board has already stated that he can give no information on the matter and that it can come only from a ministerial source.


John George Diefenbaker: Mr. Speaker, I do not want to comment on a vote that took place yesterday, but the hon. gentleman knows very well that throughout the years it has never been considered proper to reveal the particulars of agreements or transactions entered into by the wheat board. To do so would be to depart from the regular principle and would be of benefit only to those who are competitors.


Lionel Chevrier: A supplementary question-


Mr. Speaker:: Order.


Lionel Chevrier: On a point of order, Mr. Speaker-


Mr. Speaker:: Before the hon. member proceeds with his point of order, the point has been taken that the question raises a matter which was decided by the house yesterday.


Lionel Chevrier: Mr. Speaker, while my question in its preamble did have something to do with yesterday's vote, it was directed primarily to the answer given by the official in Winnipeg, and it was in the light of that answer that I put the question to the Prime Minister. I repeat it to him now. In view of what was said by the official, namely that the answer should be given on a ministerial level, I ask the Prime Minister now if he will not throw some light on the terms of the agreement.


John George Diefenbaker: That is what I was trying to do, throw some light on the question and show that never in the past has the course been followed that was suggested yesterday.


Hon. Paul Martin (Essex East):: I should like to ask the Prime Minister a supplementary question. Is it a fact that the government or its agencies are now negotiating with communist China for the sale of further grain by Canada to China?


Mr. Benidickson:: On credit.


John George Diefenbaker: Mr. Speaker, naturally I would not be in a position to answer that question at this time. If the hon. member wants information with regard to whether negotiations are continuing at the moment, I will endeavour to ascertain the situation and having done so will then place before the house, if it is proper to do so, an answer to that question.


Paul Joseph James Martin: Certainly we ought to be told whether you are negotiating.,



EUROPEAN COMMON MARKET


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: I should like to ask the Prime Minister whether he would not reconsider the decision of the government conveyed to the house by the Minister of Finance on Tuesday that Canada will not seek a place at the common market negotiating table at Brussels when matters of special trade interest to our country are under consideration.



IS. 1962

Hon. Donald M. Fleming (Minister of Finance):: The Leader of the Opposition has attributed to me a statement of government policy to the effect that we would not ask for a place at the negotiating table at Brussels. That is not what I said, and that is not the question he asked me. He asked me if Canada had asked for a place at the negotiating table, to which I gave a negative response. Canada has not asked for a place at the negotiating table, as has Australia.


Lester Bowles Pearson: May I ask the Minister of Finance, is Canada considering a request for that purpose?


Donald Methuen Fleming: Not at the present time, Mr. Speaker. One cannot say that circumstances might not arise which might lead the government to make such a request, but at the moment the government does not see an occasion for making such a request.


Lester Bowles Pearson: May I ask the minister a supplementary question. Is he aware that the Australian government has requested and has secured representation at these meetings when Australian trade interests are especially affected?


Donald Methuen Fleming: I am aware that a request has been made by the Australian government and that it has been communicated to the Six by the United Kingdom, but I am not aware that the Six have assented to the request as yet.



NEW YORK WORLD FAIR


[Stage Direction]
On the orders of the day:
Hon. George H. Hees (Minister of Trade and Commerce):: Yesterday the hon. member for Dollard asked whether Canada had received an invitation to participate in the New York world fair. The answer is yes, Canada did receive an invitation to participate in this fair. There is a bureau of international exhibitions which prescribes the rules and regulations governing the holding of international world exhibitions. At a meeting of this council held on November 8, 1960, it was clearly indicated that the New York world's fair did not meet their rules and requirements, and by resolution of that council they called upon all nations signatory to the convention to abstain from participating in the New York world's fair. In honouring her signature Canada declined the invitation. It should be observed that this is not a world's fair sponsored by the government of the United States but is a private organization.
Inquiries of the Ministry



REPORTED SHIPMENT OF DYNAMITE

[Stage Direction]
On the orders of the day:
Mr. Lucien Cardin (Richelieu-Vercheres):: I wish to direct a question to the Minister of Trade and Commerce. Can the minister inform the house whether the government has recently authorized the shipment of a large quantity of dynamite to Cuba?


George Harris Hees: I think that was indicated some time ago. I do not know how large the quantity was, but the shipment was, I understand, composed of blasting powder to be used for civilian purposes.


Louis-Joseph-Lucien Cardin: Can the minister not indicate what quantity of dynamite was sent on that occasion?


George Harris Hees: No. I do not carry those pounds and dollars in my head.


Louis-Joseph-Lucien Cardin: A supplementary question. Would not the minister consider dynamite to be a strategic material?


Mr. Speaker:: Order. The hon. member's question was more of an argument than a search for information-


Some hon. Members:: No.


Mr. Speaker:: I hear statements of dissent. If anyone feels I have been unduly restrictive I should be glad to hear his point of view.


Lionel Chevrier: I should like to raise a point of order and say that when this matter was discussed on an earlier occasion it was made clear in the house that commodities or articles of a strategic nature, as determined by the government, were not considered as exportable to Cuba. My hon. friend has simply asked the question whether this substance is considered to be a strategic material, and I think he is entitled to a reply, if not from the Minister of Trade and Commerce then from the Prime Minister.


Mr. Speaker:: As stated by the hon. member for Laurier the question takes on a somewhat different aspect, and if the minister wishes to reply there will be no objection.


George Harris Hees: There are a great many articles in every day use-table knives, for example-which could be used as war materials, if the hon. member wishes to go so far; practically anything the hon. member might wish to think of could be used in a warlike manner. However, the kind of articles I am talking about are those normally considered to be for peacetime use and, as I have said,
882	HOUSE OF
Inquiries of the Ministry we do not ship to Cuba articles which we consider would be or could be used for warlike purposes.


An hon. Member:: What about dynamite?



COLUMBIA RIVER-REQUEST FOR STATEMENT ON LATEST DEVELOPMENTS

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address what I would term a tension lessening question to the Prime Minister. In view of the continued and intense interest in the Columbia development issue, can the Prime Minister inform the house when we may expect an announcement as to the latest developments in regard to this question?


John George Diefenbaker: Mr. Speaker, I would not class that question as one that is tension lessening. All I can say is that as soon as we are in a position to give an answer in this regard, the hon. member will receive such details as are appropriate.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. M. Forgie (Renfrew North):: Mr. Speaker, I should like to direct a question to the Associate Minister of National Defence. Can the minister say whether the government has rejected a proposal to assist in providing hospital accommodation in the two Pembroke hospitals for the dependants of army personnel stationed at Petawawa?


Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, in reply to the question of the hon. member may I say that I do not believe such an answer has been given. However, we are investigating the matter, and I shall be glad to report to the hon. member as soon as I have additional information.



PERMISSION FOR FAMILIES TO JOIN SERVICE PERSONNEL ABROAD

[Stage Direction]
On the orders of the day:
Joseph Pierre Albert Sévigny: Mr. Speaker, I should like to reply to a question put to the Minister of National Defence by the hon. member for Vancouver East on January 23. In reply to the hon. member the Minister of National Defence said that the question whether dependants should be allowed to accompany
[Mr. Hees.)

service personnel to Europe was being reviewed and that a decision would be made shortly.
It has now been decided that dependants of service personnel who were sent to the air division and army brigade last fall will be allowed to proceed to Europe, and arrangements are now being made for the necessary-transportation.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: I should like to ask the Minister of Public Works whether he is aware that Central Mortgage and Housing Corporation has made a regulation to the effect that after April 1 all lumber for national housing must be graded and marked by approved inspectors, and that there are no such inspectors in Newfoundland. In those circumstances, will the minister have action taken to change the regulation so that the operators of small mills will not be deprived of this large market in their own province?
Hon. D. J. Walker (Minister of Public
Works): In answer to my hon. friend, Mr. Speaker, I might say that the new housing standards covering N.H.A. house construction were prepared by the associate committee on the national building code, national research council. In answer to the second part of the question dealing with Newfoundland, I understand that my colleague the Minister of Forestry is looking into this matter.


Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Minister of Forestry on a matter that has for a number of years been of considerable interest to people purchasing lumber.
In view of the fact that yesterday an experienced executive of a wholesale lumber company told the delegates at the Canadian lumbermen's convention in Montreal that the compulsory grade marking of lumber recently instituted by Central Mortgage and Housing Corporation benefited the small consumer and gave him more for his money, and that grade marking should be a general practice throughout the lumber industry, would the government give consideration to an amendment to the legislation or the regulations to give general effect to this practice as soon as practical?


Hon. H. J. Flemming (Minisier of Forestry):: Answering the hon. gentleman, Mr. Speaker,
I can only say that the matter is receiving attention in my department.


Hon. J. W. Pickersgill (Bonavisfa-Twil-lingale):: Mr. Speaker, may I put a supplementary question to the minister and ask whether in any consideration he is giving to this matter he will give most careful attention to the problem of the small mills and the difficulties that would be involved for them by any premature regulation with regard to grading and marking.


Hugh John Flemming: Mr. Speaker, I can only say that the department is very conscious of the importance of this matter to the smaller mills. There is no disposition on our part to act in any manner except in co-operation with Central Mortgage and Housing Corporation in an attempt to work the matter out in a way which will lead to the imposition of no hardship, and certainly none with respect to the smaller mills.


John Whitney Pickersgill: I thank the minister very much.



FINANCE


[Stage Direction]
On the orders of the day:
William Moore Benidickson: I should like to address two related questions to the Minister of Finance. First, can the Minister of Finance give the house the figures for the loss of our exchange fund reserve in the first part of February? Second, is the minister considering requesting the international monetary fund for assistance in increasing our reserve?


Donald Methuen Fleming: The answer to the first question is yes, but I do not propose to do so. This course has never been followed in the past. We issue a monthly statement and the figures for the complete month of February will be available by the middle of March.
The answer to the second question is no.



INTERNATIONAL MONETARY FUND


[Stage Direction]
On the orders of the day:
William Moore Benidickson: I have a question for the Minister of Finance. As we are only one day removed from an important meeting in Washington of the governors of the international monetary fund, although the minister indicated the other day that the Canadian Press report was wrong in saying that Canada was being called on the carpet, would the hon. gentleman tell us clearly, first, what matters Canada's delegate at this meeting has been asked to explain and, second, what countries belonging to the international monetary fund have asked specifically for an explanation by Canada?
Inquiries of the Ministry


Donald Methuen Fleming: I was asked a question-an intelligent question-on this subject only on Tuesday, to which I made a response which is to be found at page 804 of Hansard. The hon. member seems determined to draw attention to this meeting in Washington tomorrow, and the whole picture and atmosphere which he and some others are trying to build around that meeting-


Some hon. Members:: Order.


Donald Methuen Fleming: -is, I regret to say, most misleading. I pointed out that this is a meeting of the executive board of the international monetary fund. I am sure the hon. member must know that these meetings take place from time to time. I would have thought that he was aware also that the agenda of these meetings is not made public. I have no authority from the international monetary fund to make public the agenda of a meeting of the executive board of that fund. After all, it is the fund which is master of its own meetings and proceedings. These meetings proceed in camera, and the agenda is not made known.
I wish to make this final observation in response to the latter part of the hon. member's question. He referred to a press dispatch on this subject. Evidently, this press dispatch was based on a report of a speech by Mr. Roosa-


William Moore Benidickson: No, no. I asked what countries, other than the United States-


Donald Methuen Fleming: The hon. member referred to a press dispatch. Evidently this press dispatch was based on a speech made by Mr. Roosa, the under secretary of the treasury in Washington. I may say that communication was had with the department of the treasury in Washington after that speech was made in order to ascertain whether it had any reference whatsoever to Canada or to Canadian currency. Our information is that it had no reference whatever to Canada or Canadian currency; none whatever.


William Moore Benidickson: The Canadian press was wrong again.


Donald Methuen Fleming: That dispatch was wrong, quite wrong, in relation to what purported to be the inspiration of that article. This is the information which has been obtained from the department of the treasury in Washington.
As to the final question asked by the hon. member, the countries whose representatives are directors of the executive board of the fund will, no doubt, be represented. I am not aware that any particular country has asked that any subject pertaining to the

Inquiries of the Ministry Canadian currency be inscribed on the agenda. Again I say that the fund is master of its own proceedings, and the fund itself will conduct the meeting on Friday.


John Whitney Pickersgill: A supplementary question. Can the minister tell the house an occasion on which he read something in the press which was not misleading?


Donald Methuen Fleming: Mr. Speaker-


Mr. Speaker:: Order. I suggest that the subject matter of the question does not come within the administrative responsibilities of the minister.


Lionel Chevrier: The minister has already said it does.


Donald Methuen Fleming: Mr. Speaker, I think I should be entitled to make this observation. When articles appear in the press that ascribe themselves to a certain occasion, a certain statement or a certain speech, and when we make an inquiry from an authentic source and find that the speech in question was not directed at all to the subject matter that becomes the subject of the news article, that is a matter concerning which the House of Commons should be glad to receive authentic and corrective information, but hon. members opposite are not interested in having the facts.


William Moore Benidickson: The minister's batting average is better than that of the press.


Lester Bowles Pearson: Mr. Speaker, in view of what the minister has said may I ask whether this is a normal routine meeting of the fund and of no special relevance to Canada?


Donald Methuen Fleming: Mr. Speaker, it is a regular meeting of the executive board of the international monetary fund. Canada is a member of that fund and will be represented at the meeting. I have no authority whatever from the fund to disclose the agenda of the meeting.


Paul Joseph James Martin: Mr. Speaker, a supplementary question. Is it not a fact that the Minister of Finance himself was asked to attend the meeting?


Donald Methuen Fleming: That is not a fact, Mr. Speaker. There is no relationship whatever between that suggestion and truth.


Mr. W. H. McMillan (Welland):: Mr. Speaker, I should like to direct a question to the Minister of Finance. If the meetings of the monetary fund are held in camera, as the minister stated, why does it appear in the
[Mr. Fleming (Eglinton) .1
press that Canada requested that these meetings be held in secret? I have seen reference to this in several newspapers.


Donald Methuen Fleming: Mr. Speaker, I cannot assume responsibility for what the hon. gentleman may have seen. The fact is that these meetings and the proceedings are always conducted in this way. The executive board of the bank does not meet in public. Its proceedings are not public, and so far as I am aware they never have been made public.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I should like to direct a question to the Minister of Veterans Affairs in his capacity as house leader. I should like to know what progress is being made with respect to the carrying out of a commitment he made to the house last session, to the effect that proposals would be placed before the house this session dealing with the matter of parliamentary divorce.


Hon. Gordon Churchill (Minister of Veterans Affairs):: Well, Mr. Speaker, I am not sure that this is an appropriate question at this time. Progress is being made and will be reported to the house in due course. I was under the impression that certain consultations had already been held with the hon. member.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. J. P. Deschatelets (Maisonneuve-Rose-mont):: I should like to direct a question to the Prime Minister. Will he make inquiries to ascertain whether the ship Tank Empress, presently loading grain at Halifax under the Chinese wheat deal, is in fact not destined for a Chinese port but is sailing tonight bound for a communist bloc country?


Mr. Speaker:: I do not know whether the hon. member has given notice, but I would consider the question more appropriate for the order paper. If the Prime Minister is prepared to answer it, then he may wish to do so.


John George Diefenbaker: The notice was only received a few minutes ago, and there has been no opportunity to find the information.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Minister of Labour):: Yesterday the hon. member for St. John's East inquired whether I had been aware that a statement was made in St. John's yesterday by the premier of Newfoundland to the effect that Dominion Steel and Coal Corporation anticipates laying off 700 of their personnel at the Wabana mines, Bell island. I made inquiries through our unemployment insurance commission and they have reported to me as follows:
In December last DOSCO announced that failure of buyers to meet 1961 contracts and reluctance of the market to contract for 1962 would necessitate a cut back in 1962 production. At that time it was thought the work force of some 1,600 would be reduced by 500 during January. This reduction did not occur, however, and on January 28 the mines closed completely for a period that was to run for seven weeks.
The premier of Newfoundland is reported to have announced yesterday in the house of assembly that 700 Wabana workers would lose their jobs almost immediately. In making this statement the premier is reported to have reviewed his negotiations with Dominion Coal and Steel Company to avert the lay-off. These negotiations, he stated, were not successful. It would appear that this lay-off would become effective at the end of the current seven week shutdown. The premier is reported to have had confirmation of the lay-off from Mr. Fairley, the president of DOSCO, but the company did not issue a statement itself.
The prospect of other work in the immediate area for laid off miners is not good and because of their long association with the area, difficulties have been encountered in moving these workers to employment elsewhere.
The root of the Wabana mines difficulties appears to lie in loss of European markets and increased use of ore from Labrador by the DOSCO plant at Sydney. Loss of European markets has been mentioned both by Premier Smallwood and the company. However, as far as we can ascertain no public announcement has been made by either concerning increased use of Labrador ore at the Sydney plant.


Mr. J. A. McGrath (St. John's East):: Supplementary to the minister's answer, would he use the good offices of the national employment service in an endeavour to give some priority to displaced Bell Island miners in the various mining operations in Labrador, and thereby give greater effect to the labour surplus provision that is now in effect in Wabana?


Michael Starr: I shall be most pleased to give consideration to that matter.



STATEMENT ON ACTION TO REDUCE PRICES

[Stage Direction]
On the orders of the day:
Hon. J. W. Monteith (Minister of National Health and Welfare):: Yesterday the hon.
Inquiries of the Ministry member for Peterborough asked whether I had seen a brief presented to the royal commission on health services by the government of Alberta, calling for the establishment of a federal agency to examine the cost-revenue position of certain drugs and to take action to reduce prices. I have not seen a copy of this brief, though I have noticed several press reports on it. I feel at the moment I can only say that presumably this problem is now before the royal commission for its consideration.



SALE OF POISONS IN SPECIAL BOTTLES

[Stage Direction]
On the orders of the day:
Mr. Waller Pitman (Peterborough):: Mr. Speaker, I wish to direct a question to the Minister of Health and Welfare. Can the minister inform the house whether the department is prepared to take any action to implement the request of the Canadian association of home teachers of the adult blind that poisons be sold only in standard recognizable bottles?


Jay Waldo Monteith: Mr. Speaker, offhand, I cannot say definitely whether this request has been received, but we are constantly on top of this problem and considering it at all times.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: I wish to direct a question to the Minister of Justice about a matter which is of great interest and concern to the people of Kootenay West. Has the minister any information to give the house with respect to any proposed meetings between himself and the attorney general of British Columbia, Mr. Bonner, in connection with the Sons of Freedom problem?


Hon. E. D. Fulton (Minister of Justice):: Yes, Mr. Speaker. Mr. Bonner sent me a message, which I finally received late yesterday afternoon, saying he was coming down to this part of the country and wished to meet me tomorrow to discuss the Sons of Freedom and at least one other problem. I have replied that I shall be glad to meet him tomorrow for however long may be necessary.



PUBLIC WORKS


[Stage Direction]
On the orders of the day:
Mr. Maurice Bourgel (Levis):: I wish to direct a question to the Minister of Public

Inquiries of the Ministry Works. Is it a fact, as reported in yesterday's Journal, that the minister pays for his messenger service between his departmental office and his commons office out of his own pocket?


Hon. D. J. Walker (Minisler of Public Works):: Yes, Mr. Speaker. I have done that ever since I became a minister. I pay as much as $70 to $100 a month for my transportation.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: May I direct a question to the Postmaster General. I hold in my hand a post office news release marked "Not to be published before 10.00 a.m., February 15". It says that the Postmaster General, after serious consideration and a long period of experimenting with various kinds of writing equipment, has come to the grave decision to exchange the nib pens now on post office counters for more modern ball point pens. Since a decision has been reached on such an urgent and important matter, will the hon. gentleman tell us whether this news release has also been published in French?


Hon. W. M. Hamilton (Postmaster General):: While I have not seen the release personally I am certain that has been the case, because it is our standard practice to issue these releases in the language of the publication to whom it is being sent. Incidentally I may tell the hon. member that he will not be able to take away a sample of these new pens, because we are going to have them attached to post office desks by lengths of chain.


Azellus Denis: Will the Postmaster General give the house an assurance that before reaching this very important decision he seriously considered how he would dispose of the old pens?


Mr. Hamilton (Noire Dame de Grace):: the hon. member has any particular use for used nibs I shall be glad to see that he gets all that remain to us. The rest will go back into normal government service. The hon. member might be able to play with the nibs; perhaps he could have a dart game with them. I think that is what they used the old pens for, judging by the quality of the writing they did.


Azellus Denis: Has the minister any idea of the cost to the taxpayer?



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, may I ask the Secretary of State for External Affairs, in the light of the fact that certain member nations are not paying their contributions in support of the peace keeping operations of the United Nations, if he could tell us what the situation is now as a result of the decision of the sixteenth assembly, when it was decided to ask the international court of justice for an advisory opinion as to the legal obligations of all member states to these peace keeping operations?


Hon. Howard C. Green (Secretary of State for External Affairs):: Yes, Mr. Speaker. The general assembly, by resolution dated December 20, 1961, requested the international court of justice to give an advisory opinion on the question as to whether the expenditures authorized by the general assembly in relation to the financing of the United Nations operations in the Congo and the United Nations emergency force constitute expenses of the organization within the meaning of article 17, paragraph 2 of the charter of the United Nations.
By an order of the president of the international court of justice dated December 27, 1961, member states of the United Nations have been invited to submit written statements in relation to this question, and the order has fixed February 20, 1962, as the time limit within which such statements should be filed.
In accordance with the opportunity thus made available to member states, the government of Canada will within the next few days be submitting a written statement setting out its views regarding this question.



CIVILIAN WAR PENSIONS


Gordon Minto Churchill: that the house go into committee to consider Bill No. C-64, to amend the Civilian War Pensions and Allowances Act.
Motion agreed to and the house went into committee, Mr. Martineau in the chair.
On clause 1-Definitions.


Chesley William Carter: Mr. Chairman, is the minister not going to make any statement?


Gordon Minto Churchill: Mr. Chairman, I spoke at some length both on the resolution and at



IS, 1962

[Stage Direction]
second reading stage. I feel there is nothing further to be said in a general way with respect to these amendments.
Chesley William Carter: Mr. Chairman, I agree with the minister that we have had already a lengthy discussion on this bill and that no good purpose would be served by prolonging the discussion at this stage. However, I wish to assure the committee that I had no intention of introducing a partisan note in this debate, as the minister appeared to allege in his remarks on second reading yesterday. We in the Liberal party have been fully in support of this bill. We fully support the payments being made to the groups concerned under this legislation.
There is only one small point of disagreement between hon. gentlemen opposite and those on this side of the house. It concerns not the terms of the bill or the amount of the allowances but the manner in which they are going to be paid. Since we are going to recognize the worth of the services rendered by these groups who served in theatres of war we feel we should accord them the same recognition we accord other groups who served in the armed forces. In other words we should accord these groups the status of veterans.
That is the proper function of an opposition. We are not here to agree with everything the government does. We are here to point out ways in which legislation can be improved, and that is all we have sought to do.


Mr. Graffiey:: The hon. member sounds like a professor.


Chesley William Carter: I would ask the hon. member to keep quiet for a moment or two. It has been pointed out by some hon. members that the terms of this agreement are quite satisfactory to the Newfoundland foresters. Perhaps that is so. However, that consideration does not relieve us of our responsibility to the people of Canada to put this legislation on the statute books in the very best possible form. That is our function here, namely to criticize legislation and find ways and means of improving it. No matter of an agreement by anyone can relieve us of that responsibility. Although, as some hon. members have pointed out, the president of the Newfoundland foresters' association made some remarks which could be interpreted to mean that he was satisfied with it, even in the passage that was quoted from his brief to support that argument that gentleman indicated that their first choice was that they should be brought under the veterans charter.
However, apart from all that, I wish the house to consider that more than the Newfoundland foresters are involved. There are the merchant navy personnel to be considered.
Civilian War Pensions
and they are far more numerous. We have no assurance at all that they are satisfied to have their status as veterans overlooked. In any event, I think we have pressed the point far enough and I do not intend to carry it any further.
I have some questions to ask on the various clauses as they come up for consideration, but since the minister last night indicated that he had gone into the reasons why these people should not be brought under the War Veterans Allowance Act, and since he has not informed the house of these reasons, I think perhaps he might like to do so now.


The Chairman:: Shall clause 1 carry?


Some hon. Members:: Carried.


William Moore Benidickson: Is no reply to be given?


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Definitions.
Chesley William Carter: On clause 3, will the minister explain what changes, if any, are involved in this clause? The explanation says that it is consequential upon the adding of part XI to the act. However, if we read it we find it states that these claims for pension and so on are now to be adjudicated in a like manner to those under the Pension Act.


Mr. Browne (St. John's West):: On a point of order, Mr. Chairman, may I say that I think we just passed clause 2.


Chesley William Carter: No.


William Joseph Browne: What the hon. member is dealing with is not clause 3 but rather section 3 of clause 2.


Chesley William Carter: I was not aware that clause 2 had been passed, Mr. Chairman. I would ask that the committee revert to clause 2, as it was carried very rapidly.


Paul Raymond Martineau: Under the circumstances I think it would be permissible for the hon. member to proceed.


Chesley William Carter: What I am asking the minister to do is to explain to the committee just what changes are involved in this wording or in this subsection which states that all claims for pensions, allowances and compensation are going to be dealt with and adjudicated upon in a like manner as claims under the Pension Act.


Mr. Jones:: The answer is simply that this section is the same as the section now reads in the present act except for the part underlined, which had to be inserted because of the addition of part XI. Hence the act stands as it stood previously with regard to parts I to

Civilian War Pensions
X which are at present included in the act, and part XI is dealt with as set out in the next section.


Paul Raymond Martineau: There is perhaps a difficulty here. Clause 3 is a long one. The committee may wish to discuss it item by item or may wish to pass it all as a single clause. Has the hon. member for Kootenay West some observations to make on clause 3?


Herbert Wilfred Herridge: Yes. I was going to ask the minister for an explanation of section 68 in clause 3. Section 68 reads as follows:
68. No allowance shall be paid to any person who in world war II served
(a)	in enemy forces,
(b)	in an enemy ship, or
(c)	in war service groups associated with forces of the enemy.
Will he explain why it is necessary to put that clause in this bill? It seems to be somewhat unusual.


Gordon Minto Churchill: I find it a little bit difficult to follow the hon. member's remarks because of other considerations going on in the chamber. Will the hon. member repeat his question?


Herbert Wilfred Herridge: Yes, certainly. I am asking a question on section 68 on page 4 of the bill, which reads as follows:
68. No allowance shall be paid to any person who in world war II served
(a)	in enemy forces,
(b)	in an enemy ship, or
(c)	in war service groups associated with forces of the enemy.
I wonder why it is necessary to put such a clause in a bill like this.


Gordon Minto Churchill: So there will be no misunderstanding at all may I say that it is a repetition of a section in the War Veterans Allowance Act, namely section 9, which reads as follows:
No allowance shall be paid to any person who served in enemy forces in world war II.


Herbert Wilfred Herridge: It seems to be unusual and unnecessary in a sense. I would not expect them to get an allowance.


Paul Raymond Martineau: Shall clause 3 carry?


Chesley William Carter: No. On clause 69 or section 69, whichever is the way in which you are dealing with it, I have a question to ask. Perhaps I might take sections 69 and 70 together. Does this mean that the groups mentioned in this legislation will be entitled to all the benefits under the War Veterans Allowance Act? If not, that benefits will be withheld?


Gordon Minto Churchill: This is the section which bears on the board's power to adjudicate all claims just as they do now under the War Veterans Allowance Act.


John Whitney Pickersgill: Is everyone in these categories entitled to every kind of allowance to which persons are entitled under the War Veterans Allowance Act? If not, what difference is there?


William Moore Benidickson: I think that matter is of the essence in our discussion in committee of the whole. With respect to clause 3 the explanatory note states as follows:
The allowances payable under the proposed amendment are similar to the allowances paid to veterans under the War Veterans Allowance Act, 1952.
The hon. member for Bonavista-Twillingate has been more specific than that. The word "similar" is not quite adequate for a member of parliament who is looking at pages 2 to 7, as I recall it, on which appear sections which involve changes with respect to this legislation. I think the minister and his learned parliamentary secretary should indicate to us specifically just what is and what is not similar to the War Veterans Allowance Act so far as these new categories are concerned, because the situation is unique. The bill is not going to the veterans affairs committee for the minute and careful examination that normally always follows after any legislation concerning veterans has been introduced in the house. The government established a standing committee on veterans affairs, but that committee is not being asked to peruse this legislation. This bill is an important matter to a great number of people who have been denied classification as a veteran as requested yesterday by the hon. member for Burin-Burgeo. But that having been denied, what are the additional distinctions? The word "similar" in the explanatory note is not quite adequate in order to assure us that there will be equality. "Similar" is not the same as "same" and "equal".


Gordon Minto Churchill: May I say to the hon. member who has just spoken that if he wishes this legislation to be delayed and referred to the standing committee on veterans affairs, let him say so right now. It will mean postponing consideration of the bill for perhaps two weeks, because it takes quite a while to arrange for representatives of the various veterans organizations to come to Otawa. If he is suggesting that type of delay, let him say so.


Paul Joseph James Martin: That is not delay.


William Moore Benidickson: It would not bother me.


Gordon Minto Churchill: On the other hand, if the hon. member wants to go ahead with the legislation, let us proceed as we are right now.


William Moore Benidickson: Mr. Chairman, I have great respect for the minister. Over the years I think all members of the veterans affairs committee have proven that they are friends of the veterans, and certainly the minister has proven himself to be one. However, in circumstances of this kind the man who receives all the information and who has the staff to learn all the unsatisfied criticisms is the person who, as in the past, must report to this committee what criticisms he has received that are not satisfied by the legislation.
I am not satisfied that the word "similar" is entirely adequate. In the present circumstances I am perfectly prepared to take the word of the Minister of Veterans Affairs, who has been a good friend of the veterans as have his predecessors in all political parties. I simply want to make sure while we are making what I think is a very desirable advance that I can never be accused of having been lacking in proper criticism and not having done as much as I could when the legislation was before the house.
The word "similar" is not entirely satisfactory to me. I know the minister has received briefs on this matter from all the veterans organizations over a period of a great many years. I simply want him to take the opposition and others into his confidence and tell us to what extent there may be differences between what a regular veteran gets and what these other categories who served this country well in wartime are likely to get under this legislation which I am sure he has much pleasure in introducing at this session, as he should have.


Gordon Minto Churchill: If we restrict ourselves to matters which are relevant to the bill I am perfectly happy, and I know the hon. member for Kenora-Rainy River will do that. The word "similar" was used because there is one slight difference and we wanted to be absolutely frank about the thing. The slight difference is that we have not brought into this particular bill section 4 of the War Veterans Allowance Act, which permits allowances to employable veterans. That particular section has almost fallen into disuse over the years, and it did not seem advisable to introduce it into this bill. As a matter of fact the veterans rely on section 3, where casual earnings come into the picture, and section 4 has fallen into disuse. There are now only 93 recipients under section 4 out of 72,000 people who come under the War Veterans Allowance Act.


Herbert Wilfred Herridge: There is no necessity to labour the matter, but I should like to ask whether those persons who will be eligible to receive the benefits of this act will receive
Civilian War Pensions
the same service, the same processing and the same results in principle and practice as recipients under the War Veterans Allowance Act in general.


Gordon Minto Churchill: That is our intention.


William Moore Benidickson: From the same board.


Gordon Minto Churchill: Yes, from the same war veterans allowance board.


John Whitney Pickersgill: I should like to ask one question about the 93 persons who are receiving an allowance under section 4. Are those all awards that were made some considerable time ago? Can the minister assure us that no new awards are being made under section 4?


Gordon Minto Churchill: I am so informed. No new awards have been made under section 4. They were all made several years ago.


John Whitney Pickersgill: Then it would be quite precise to say that so far as veterans are concerned, section 4 would not be used for anyone coming under the War Veterans Allowance Act, either those previously qualified or those who would now qualify?


Gordon Minto Churchill: It is very unlikely, and there has been no demand from people coming under the War Veterans Allowance Act for the application of section 4, largely because of the improvements which were made in section 3 by way of amendments involving various privileges concerning casual earnings.


Chesley William Carter: I should like to ask the minister whether the 365-day clause will apply in qualifying for these benefits.


Gordon Minto Churchill: The only ones to whom that applies among the categories listed in the bill constitute a very small group who served only in England during world war I.


John Whitney Pickersgill: Are there any persons in these categories who served only in world war I, and what class would they be?


Gordon Minto Churchill: I wonder whether that is the question the hon. member wanted to raise. There are quite a number who served in world war I. Did he mean only in England?


John Whitney Pickersgill: Exactly, that are covered by this exception.


Gordon Minto Churchill: People in the voluntary aid detachment are the ones from world war I whose services was likely only in England; that is, some of them would have served only in England.


Herbert Wilfred Herridge: There were some in France.


Gordon Minto Churchill: Some of them were in France.

Civilian War Pensions


William Moore Benidickson: If they served less than 365 days in world war I would they be entitled to any benefits under the legislation before us?


Gordon Minto Churchill: No, not any more than the veterans of world war I who did not get in the time overseas.


Chesley William Carter: Perhaps I should explain my question a little further. I was thinking about veterans who served in the first world war who had less than 365 days in the service and could not therefore qualify for benefit, but who may have enlisted in a forestry unit or some other unit in world war II. It was the position of these people I had in mind.


Gordon Minto Churchill: The world war II service would make them eligible.


John Whitney Pickersgill: I am going to risk having
the chairman rule me out of order by asking the minister if he does not believe the time has come to remove the 365-day discrimination with respect to veterans of world war I.


Gordon Minto Churchill: That is definitely out of order, Mr. Chairman.


Lionel Chevrier: Are you the chairman now?


John Whitney Pickersgill: As a matter of fact, Mr. Chairman, as my hon. friend from Laurier has observed, I do not think we should permit the minister to usurp the functions of the Chair. It is not for the minister to say whether or not a question is out of order. Your Honour allowed me to ask the question, and I feel the minister ought to answer it.


Paul Raymond Martineau: If I understand correctly the minister has given an answer.


John Whitney Pickersgill: Well, the answer will be very unsatisfactory to a large number of veterans.


Henry Frank Jones: If I may speak to the point of order, Mr. Chairman, I would say we are not dealing with veterans, as the hon. member for Bonavista-Twillingate knows. As was decided yesterday, under this bill we are dealing with persons under the Civilian War Pensions and Allowances Act. I believe everyone would agree, in the light of that fact, that the question was in fact out of order.


Paul Raymond Martineau: Speaking to the point of order, I would say discussion must be related to the provisions of the bill.


Chesley William Carter: On page 6 of the bill I find this paragraph:
For the purposes of this section
(a) "dangerous waters" means such oceans, seas or waters as the board may prescribe:
Does this give the board discretionary powers to determine what shall be considered as dangerous waters?


Gordon Minto Churchill: The whole purpose is to give discretion to the board, and rightly so; because if we put a limitation in the bill then somebody somewhere may come to us and say he had served in waters which for 40 years we had thought were not dangerous but he might prove to us that they were. This provision does give discretion to the war veterans allowance board.


William Moore Benidickson: What are the over-all rights of the minister, in regard to this point, to go beyond what the decision of the board might have been?


Gordon Minto Churchill: There are no rights in the minister to go beyond the decision of the board.


Chesley William Carter: I am interested in this question of dangerous waters, because it seems to me that we are giving the board powers in this legislation which it did not have before. Is that the case?


Gordon Minto Churchill: No, that is not the case. Under section 38, subsection (c) paragraph (ii), the war veterans allowance board has the right to determine places, zones or areas as the board may prescribe, to use the words that are in the act. It is, therefore, the same type of discretionary power given to the board.


William Moore Benidickson: The minister cannot alter that decision of the war veterans allowance board?


Gordon Minto Churchill: No. I do not see why he
should.


Chesley William Carter: I recall pursuing this question in the parliamentary committee on veterans affairs, I think it was at the last session. If 1 recall correctly I was told by the witness who appeared on behalf of the board that the board was governed in its definition of dangerous waters by a ruling that had been handed down by the Department of Justice. I gather that under the provisions of this bill the board is not required to be bound by any decision handed down by the Department of Justice in this matter?


Edmund Davie Fulton: We do not hand down judgments; we give opinions.


Chesley William Carter: Or opinions?


Henry Frank Jones: Section 23 of the War Veterans Allowance Act states the position; that a district authority has full and unrestricted powers and exclusive jurisdiction to adjudicate upon all matters and questions arising under this act.


Chesley William Carter: Perhaps I might explain my point better if I gave a concrete example. I recall submitting a case to the war veterans

allowance board on behalf of a person who had served in waters just off the coast of Newfoundland, between Bell island and the mainland, in which submarines had torpedoed several ore boats. I pointed out that these were certainly dangerous waters.
I pointed out, too, that in the area between Port aux Basques and Sydney our ferry had been torpedoed. These were, therefore, dangerous waters. It was my understanding, however, that these arguments were not acceptable to the board. I am trying to make sure that the board does have discretionary authority under this measure now to designate these as dangerous waters if they so wish.


Gordon Minto Churchill: That is my understanding of the situation.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read a third time; now?


William Moore Benidickson: Agreed.


Gordon Minto Churchill: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



CHILDREN OF WAR DEAD ACT


Gordon Minto Churchill: the second reading of Bill No. C-65, to amend the Children of War Dead (Education Assistance) Act.


Chesley William Carter: Is the minister going to make a statement?


Gordon Minto Churchill: I gave a detailed statement in regard to this measure at the resolution stage. There is nothing I can usefully add at the moment. When we are in the committee stage I will be prepared to answer questions.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Martineau in the chair.
On clause 1-"Student".
Chesley William Carter: This legislation was first enacted in May, 1953. It was based on the principle that the children of a war veteran were entitled to an education, and that they should not be deprived of an education because their father had been killed in action or had died of wounds or from other causes related to his war service. If we developed this principle we would see it also would apply to the children of veterans who are 100 per cent disabled. In effect it boils down
Children of War Dead Act to the ability of a veteran to finance the education of his children. When a veteran dies his family's income is reduced. It consists only of the pension and allowances received by his widow and children. This is true whether or not a veteran dies from causes that are related to his war service.
The original bill was related to those dependants who received pensions under section 13. I recall that a few years ago, when the bill was examined by a parliamentary committee, the war amputees' association pointed out that this legislation applies in cases where a pensioner may only have 10 per cent disability, provided that the cause of his death can be related to his war service. They mentioned that most of their group had a much higher disability rating. Some had 100 per cent, some 60 per cent, and they said they were handicapped in supplementing their earnings to finance the education of their children. Therefore they thought some provision should be made to amend the law so the benefits could be widened.
Now I am pleased to see that there has been a broadening of the benefits and also a clarification of the definition of "student" which may help to extend the benefits. I am also glad that the allowances have been increased, but during the short time I have had to study the bill I have found it is not clear just how far the bill goes toward meeting the wishes expressed by the Canadian Legion, the war amputees' association and other people interested in this matter. Perhaps the minister would take a few minutes to give us a broad general outline of the changes that are proposed.


Gordon Minto Churchill: There has been a great deal of interest taken by veterans associations in this particular act, the Children of War Dead (Education Assistance) Act. That is quite understandable, but in some instances we have gone further than the representations which were made to us by the veterans associations. Up to the present time the act has been a good one, and what we now are attempting to do is to make sure that what I might call the marginal cases are taken care of more fully.
There are instances when a deserving student might be prevented from continuing and completing his course and, having launched him on that course and assisted him in it for maybe three of four years, we want to make sure that he will finish the course and then make his effective contribution to the life of the country. It was because of cases like these, where hardships have resulted when a university course was discontinued, that we have brought in these amendments. We want to be able to continue to

Children of War Dead Act assist a student when, either through illness in his family or because of some economic distress, he has had to withdraw from his educational course for a year or two but then wants to resume it. We do not want the limitation of the age factor to stand in his way. Having made a good investment we want to bring it to fruition. That is generally what we have attempted to do in the amendments here proposed.


Chesley William Carter: Are the benefits still limited to the dependants of those veterans whose deaths can be directly related to their war service?


Gordon Minto Churchill: Yes, that is still the same.


[Stage Direction]
Clause agreed to.
On clause 2.
William Moore Benidickson: With particular reference to subparagraph 2 we note in the supplementary notes that this is new. Therefore on the right hand side of the amending bill we do not get the law as it has existed in statute form hitherto. This may be a very desirable provision. I have no objection to it, but I want to know what the minister has in mind; because the wording says:
The minister-
I take it at his sole discretion.
-may extend the total period for which an allowance and costs may be paid-
Does this mean one could keep a student for perhaps 20 years at Harvard, London, or any other distinguished university-


Paul Joseph James Martin: Toronto.


William Moore Benidickson: -at the discretion of the minister? It says that if he, and I underline "he", is of the opinion that the student's progress and achievements in his course of study are such that it would be in the interest of both the student and the public to do so, he may extend the period. I cannot imagine that we would have a minister of veterans affairs who would not be responsible and who perhaps would not make a proper judgment in the interest of both the student and the public, but I think the provision pretty wide.
I should like an assurance from the minister that he does not see in this an immediate opening through which he is going to give ministerial patronage to a lot of people who have progressed a certain distance with the aid of the veterans educational allowance provisions; and that while he is in office he and he alone, without any limitation upon him could keep somebody pursuing an educational course at high levels subject only to the opinion of the minister as to that


person's worthiness with regard to performance. This is a pretty generous wording of the statute, as I read it I have confidence in the minister, but I wonder if he could indicate to the committee his intentions in this regard if this is passed.


Gordon Minto Churchill: I shall be glad to do so. When the officials of the department put this wording in front of me, I objected to it. I said I did not want this discretion. The hon. member for Kenora-Rainy River has pointed out the weaknesses of a provision such as this, but we were unable to find another procedure which would be satisfactory.
Just by way of explanation, may I say that there is an age limitation of 30 years set in the next clause. In some countries it is higher.


William Moore Benidickson: A person could not go on attending college from the age of 18 to the age of 65?


Gordon Minto Churchill: A student who has passed the age of 30 is not eligible for any assistance under this act. The second factor is that this assistance is not for the purpose of obtaining degrees beyond the basic degree; bachelor of arts or bachelor of science or something of that nature. This provision is not intended to foster attendance at postgraduate courses. The third factor is that second class honours are required before a student would be considered for assistance of this type.
Having made that explanation, let me go on to a further point. In discussing this clause prior to bringing the bill before the house I said the only way around the difficulty which I saw was this; that I here and now declare and record in Hansard that I do not want to be put in the position of having to make a decision on my own with regard to any student. However, in the circumstances, in the interests of the students themselves, if there should be one, two, or three students who require special attention, I shall make a decision.
Then I go further and declare here that so long as I am in the position of Minister of Veterans Affairs I will disclose to the committee of the whole house or to the standing committee on veterans affairs any action which has been taken under this particular clause, so that if the ministerial discretion has been used unwisely information will be provided upon which the standing committee or the committee of the whole house may take such action as may seem desirable. On the other hand, if the ministerial discretion has been used wisely I would expect the interested parties to say so. As I have indicated,

I am open to suggestions about this, and if any hon. member can provide some other method I shall be glad to consider it.


Herbert Wilfred Herridge: I am interested in the answer given by the minister to the hon. member for Kenora-Rainy River because I also had this question in mind, and the clause does seem to contain the weakness which the hon. member mentioned. I was interested in the minister's statement as to what he intended to do. I think that course would be satisfactory, particularly if these cases were brought to the attention of the standing committee on veterans affairs whose members closely follow the administration of the act. Would the minister tell us what would be the normal procedure with respect to gathering the information and presenting the facts to him? What would be the procedure before he would be called upon to make a decision? Would he get recommendations from senior officials? I should like to know how the whole thing will be administered.


William Moore Benidickson: I indicated that I have confidence in this minister, as I have had in most ministers of veterans affairs. However, the length of the hon. gentleman's tenure in present circumstances may, perhaps, be somewhat short. The minister has indicated that he has in mind taking his responsibility for using the discretionary power given here very seriously, and he has offered to report to parliament on any decisions made under this clause of the new legislation. Perhaps he or one of his ministerial colleagues would care to advance an amendment providing, for example, that such decisions be reported within 30 days of the opening of the session following the decisions being made. I am not insisting on that because, as I have indicated, I do not think the present minister will need my confidence for very long.


Herbert Wilfred Herridge: May I make a suggestion? It seems to me that a report of such decisions could be included in the annual report of the department.


William Moore Benidickson: That would be adequate. I am always against naming people who as individuals are entitled to what the law gives them. If it is all above board I do not think any names should be given. With the consent of the hon. member for Kootenay West I would suggest, perhaps, that the number of persons dealt with under this clause could be stated in the annual report. We would still, as individual members of parliament, have the right to ask for specific names by placing a question on the order paper if we chose, though I doubt whether that would be any of our business or whether it would come to that.
Export Credits Insurance Act
We might consider letting this clause rest briefly while the minister gives some thought to this matter. We have one or two other clauses to pass. I myself think we would be satisfied with an indication that the minister would, in his annual report, indicate the number of cases in respect of which he has used the discretionary power given under this particular provision.


Walter George Pitman: Possibly, along with the numbers of people involved, the minister could also report the actual courses taken. I think this clause is an excellent one. It coincides with what is going on in the educational field throughout the country by trying to give young people a particular unit of education, and leaving aside the question of age almost entirely. It provides them with a unit of education so they are in a position to secure employment.
I appreciate that the hon. member for Kenora-Rainy River has called attention to a difficulty in connection with possible suspicions which might arise as a result of the application of this clause, but in the main I think this is one part of the veterans legislation which will particularly commend itself.


Henry Frank Jones: I wonder whether the purpose which the committee has in mind might not be achieved if we drew to the attention of hon. members what had been done under this clause, as suggested by the hon. member for Kootenay West, in the annual report. As much detail as possible would be given in the annual report, while the disclosure of full information would still be possible on the discussion of the departmental estimates should that information be required. The basic purpose of the reference in the annual report would be to direct the attention of hon. members to this aspect of the legislation. Then when the item came up for discussion during the estimates they could obtain fuller details if they desired.


[Stage Direction]
Clause agreed to.
Clauses 3 to 5 inclusive agreed to.
Schedule agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time?


John Whitney Pickersgill: Next sitting.



EXPORT CREDITS INSURANCE ACT


George Harris Hees: that the house go into committee to consider the following resolution:

Export Credits Insurance Act
That it is expedient to introduce a measure to amend the Export Credits Insurance Act to increase the maximum liability at any time ol importers under outstanding instruments the payment of which is guaranteed by the corporation under section 21A of the act, from $200,000,000 to $300,000,000; and to provide further for a certain change in connection with the administration of the act.
Motion agreed to and the house went into committee, Mr. Martineau in the chair.


George Harris Hees: Mr. Chairman, the bill is a short one with two clauses, the first providing for an increase in the number of directors on the board, and the second to increase by $100 million the funds available for long term export financing.
The Export Credits Insurance Corporation operates in two main fields. It provides export credits insurance to protect Canadian exporters against non-payment by foreign buyers and, second, it provides funds for long term financing. Section 14 of the act provides for a maximum liability of $200 million under which the corporation may take on risks for its own account. Under section 21 there is an additional $200 million under which the governor in council may specifically instruct the corporation to provide insurance in cases where the board of directors is of the opinion that the contract would impose on the corporation a liability for a term or an amount in excess of that which the corporation would normally undertake. The risk involved in any policy issued under this section 21 is carried by the consolidated revenue fund.
In 1961 the corporation insured exports totalling $132 million, and since it started operations back in 1945 it has covered a total of more than $1 billion of export sales. This amount includes consumer goods sold all over the world on credit terms usual for the trade, which extends from cash against documents to a maximum of 180 days. It also includes capital goods sold on supplier credit terms which extend to a maximum of five years credit after delivery.
Claims paid to date total $10.5 million. The corporation does not subsidize exports, but neither is it trying to make a profit. In the long run the premiums should just cover the operating expenses and net losses. The financial statements of the corporation as at December 31, 1961, which will shortly be issued, will indicate that by and large this result has been achieved, and this has been done after insuring exports of $1 billion.
In June, 1961 the Export Credits Insurance Act was amended to provide a fund of $200 million under which long term export financing would be provided to help Canadian exporters of capital goods compete on credit terms made available by organizations in other exporting countries, such as the export-import bank of Washington. Canadian capital

goods exporters, with this backing, have been encouraged to seek orders abroad. To date contracts involving exports of $41 million have been entered into on the basis of long term financing. These contracts will involve over 5.7 million man hours of work. Contracts under negotiation for which financing has been approved in principle by cabinet total $114 million. In addition guarantees totalling $31 million have also been given which come under the $200 million ceiling. Thus, out of $200 million available, a total of $186 million has been committed.
We are more than pleased with the results which have been obtained to date by this provision of long term financing; and it is now proposed in this bill to amend the Export Credits Insurance Act, that the $200 million ceiling for long term export financing under section 21A be increased by $100 million. This will enable Canadian manufacturers of heavy capital equipment to continue to seek orders from abroad on terms which are required to secure the business.


William Moore Benidickson: Mr. Chairman, before he takes his seat would the minister indicate what the meant by his reference to the cabinet having dealt with a certain volume of applications in principle?


George Harris Hees: Yes, Mr. Chairman. The cabinet receives from the Export Credits Insurance Corporation recommendations which I, as Minister of Trade and Commerce, bring forward to it for the granting of credit up to certain amounts to cover certain proposed transactions. If the cabinet decides that an application is a good and sensible application, then it passes the application and the firm applying for the credit is advised that the credit is available for the specific sale up to the amount the cabinet has passed. Then if the sale is consummated, it may be made on those credit terms which are made available by the government.


Mr. Mcllrailh:: Mr. Chairman, I think most hon. members of this committee appreciate the export credits insurance legislation as a very useful enactment that over the years since its inception has contributed to Canada holding and developing its place in the export markets of the world. Since export is such an essential item in our total prosperity, I believe hon. members generally will approve any attempt made to maintain this legislation in condition to meet the exigencies that arise from year to year.
The nature of the problems confronting exporters varies sharply from year to year. As I understand the resolution now before us, it foreshadows legislation designed to meet two current problems, the lack of

capital available under section 21A of the act, with which I shall deal in a moment, and an administrative problem under the act.


Paul Joseph James Martin: When was the act
first introduced?


George James McIlraith: 1944.


Paul Joseph James Martin: That is extremely important.


George James McIlraith: I had some difficulty hearing the first part of the minister's remarks, when his voice assumed a remarkable degree of gentleness.


William Moore Benidickson: He slurred over his statement.


George James McIlraith: In any event I did not hear him. Am I to understand from his remarks that the amount of insurance contracts now outstanding under this act is of the order of $132 million?


George Harris Hees: That is correct.


George James McIlraith: And is it correct that the total amount of insurance that has been in force at one time or another throughout the lifetime of the act is something over $1 billion?


George Harris Hees: That is correct.


George James McIlraith: If the minister has it available, is he able to give us a breakdown of the item of $132 million, preferably by countries or by general commodities?


George Harris Hees: I have not that information available at the moment, because we are not dealing with that section of the act. I have the details of the orders in council which have been approved and which have materialized into orders under section 21A regarding export credit financing. I also have other information on the subject of export financing. However, I have not information on the insurance, as it is not that section with which we are dealing.


George James McIlraith: I must say that the minister is the one who introduced the discussion of the insurance principle under the act, and gave the figures. Since he gave the figures I was interested in them. If he does not have that information available with him at the moment, I am not going to press the matter.


George Harris Hees: I am sure I can get that information for the hon. member if he would like to have it at the committee stage.


John Whitney Pickersgill: This is the committee stage.


George James McIlraith: I am not pressing the matter at the moment. We can get it at a later stage.
26207-1-57J
Export Credits Insurance Act


George Harris Hees: This is the resolution stage.


John Whitney Pickersgill: This is the committee stage.


George James McIlraith: As I see it, the point is that the needs at the moment in the export field have to do with the financing of sales, or in other words the granting of credit in financing sales as opposed to the original need, which was one of insurance only. If I am correct in that statement I think the need for parliament doing what it can to assist exporters in this field is well exemplified by some of the facts of the current trade situation.
The resurgence of the economy in Europe has had certain implications for us that are very real in the competitive field. It is interesting to note these figures. I made some tabulations last evening on this matter. As I read the figures, total world exports in terms of United States dollars between 1956 and 1960 have increased by about 21 per cent. In that same period Canada's exports have increased by approximately 11 per cent. I think that figure tends to indicate the intense competition we must face now as exporters, mainly from the European countries whose economies have gone ahead very rapidly.
The matter can perhaps be put in another way. As recently as the year 1957 we were the third largest exporting nation on a per capita basis. Now I believe we are the ninth exporting nation on a per capita basis. The point I am seeking to make is the need for doing everything we can to assist our exporters. As I see it, since this act is of direct assistance to exporters-indeed the history of it since 1944 has proved this to be so-I think it is wholly desirable that we make available to the corporation such capital as can properly be used under the act. Therefore I am in accord with the general purport of the resolution. As to the other point about certain changes in administration, we can perhaps deal with that matter in the committee stage.
I had one or two questions I wanted to ask. It will be recalled that last year, in June of 1961, the act was amended along certain lines. On that occasion there was a rather extensive debate, and the minister was kind enough to adopt some suggestions I made in the earlier debate when the act was previously amended in 1959, in separating the capital made available under sections 21 and 21 A. Then while dealing with the bill itself in the committee stage he was kind enough to make another change that I thought was desirable, namely providing for the tabling of orders in council used under the act, under both section 21 and section 21 A. I hope the experience of the minister in the year that has elapsed since the last session has shown that those amendments were helpful and useful.

Export Credits Insurance Act
The point I wish to raise now is this. I wish to ask the minister whether he has conveniently available a breakdown of the funds used-I refer to the contracts either by guarantee or purchase-under clause 21A, by countries. If he could put that information on record perhaps I could then follow up with one or two other questions. However, they would follow from it.


George Harris Hees: Yes, I have the information available, and I should be glad to put on record information with regard to the four contracts which have been completed. The first is for the Argentine, Montreal Locomotive Works, for locomotives. The order in council was P.C. 1961/1543. The amount was $12,500,000. The second was for Brazil, Montreal Locomotive Works, for locomotives. The order in council was P.C. 1961/1732. The total amount was $2,600,000. The third contract was for Chile, John Inglis Company Limited and Sandle and Company Limited, for pulp and paper machinery. The order in council was P.C. 1961/1081. The total amount was $13,500,000. The fourth contract was for Mexico, to Dosco for steel rails. The order in council was P.C. 1961/1794. The total amount was $12,500,000. These figures make a total of $41 million. Then there are $114 million of applications which have been approved by cabinet in principle, but negotiations are still going on between the companies concerned, who we hope, will be eventual purchasers. I am afraid I am not able to give the details. 1 know the hon. member for Ottawa West would not expect me to do so in connection with those transactions.


George James McIlraith: No. As I understand the second item, it deals with matters which may or may not materialize by way of contract.


George Harris Hees: That is correct.


George James McIlraith: We hope they will do so.


George Harris Hees: That is correct.


George James McIlraith: I also take it that all the orders in council have been tabled as required under the act.


George Harris Hees: That is correct.


George James McIlraith: That brings me to this matter. In his references I notice that the minister does not distinguish between a guarantee under section 21A and the purchase of a guaranteed instrument. Can he tell me whether these are guarantees or whether they provide for the purchase of a guaranteed instrument?


George Harris Hees: Three guarantees were given under section 21A. The first is for $10 million. That is the stand-by guarantee to the Export Finance Corporation of Canada. The second is
[Mr. Mcllraith.l
for $9 million to Canadair in connection with the sale of two CL-44 D-4's to Slick Airways. The third is for $12 million to Dosco in connection with the sale of rails to the Mexican National Railways.


George James McIlraith: The point I am getting at is that the purchase of a guaranteed instrument would involve the direct expenditure of government funds provided through this corporation.


George Harris Hees: That is correct.


George James McIlraith: And that a guarantee would only be a contingent liability that might not ripen into an actual expenditure.


George Harris Hees: That is correct.


George James McIlraith: Having in mind the discussion that we had last year, I notice that there has been no provision under this act for whatever guarantee or insurance was given on the Chinese wheat sale. Although I must confess that I have been remarkedly unsuccessful in getting information from the government on this matter, I understand that some such guarantee or insurance was given under this act. Am I right in that?


George Harris Hees: No. I am advised that the Chinese wheat deals did not come under this act.


George James McIlraith: That raises one observation I want to make. In so far as the House of Commons is concerned, the procedure under this act is a satisfactory one in that the corporation and the government under certain other provisions must table the orders in council. Therefore the house is fully apprised from time to time as to the actual contracts and liabilities outstanding and the orders in council authorizing them and has the whole picture before it. As the act is devised, the house has full information and some method of maintaining control over the expenditure of public funds under it.
My point is that we on this side have been remarkably unsuccessful in obtaining information about precisely the same kind of transaction in relation to the sale of wheat to China because it was not carried out under this act. I might refer hon. members to the debate of last year, and I can give references if desired. One reference is page 6595 of Hansard for June 19. In the case of the sale of wheat to Poland, a communist country, the transaction was carried out under this legislation and consequently the house had full information.
We are now asked to approve a resolution, which I think is a good one in principle, but we are not given the information as to what is the liability of the government or what, if any, burden has been placed on the taxpayers outside this act under this

type of insurance contract or credit guarantee, as the case may be. My argument is that the house is entitled to that information and that all the contracts of insurance of export sales or guaranteeing instruments or purchases of guaranteed instruments should come under this act.
As a matter of fact, I am not quite clear what the authority is for the transactions the government has entered into by way of guarantee of the sale of wheat to China, and the house has no knowledge in this regard and no way of obtaining that information. I respectfully suggest that that transaction and any others there may be that are similar, and about which we have found out nothing, should come under this legislation so that the house may have the information and be able to deal with them as it sees fit.
The Chinese wheat sale was one of some magnitude. Because of its tremendous importance to the western farmers the Minister of Agriculture made an announcement about it and we became aware of it in that way. But having found out that fact we have been unable to obtain information that should properly be available to the House of Commons. Although we are entitled to be supplied with the relevant contracts we have not been able to get them. There may be other contracts of insurance, contracts guaranteeing export paper or purchases of export paper about which we have been told nothing by the government. I would ask the minister to advise us whether or not there are any such other contracts that have not been brought under this act and therefore have not been disclosed to the House of Commons.


George Harris Hees: There are none that come under my jurisdiction, and I feel sure the hon. member realizes that he must get that information from the minister who has jurisdiction over these matters, the Minister of Agriculture.


George James McIlraith: Respectfully, Mr. Chairman, X must differ with the Minister of Trade and Commerce on his last statement. He is a minister of the crown; there is collective responsibility and he is responsible. This legislation is his responsibility in the house and we are entitled to know from him in his capacity as a minister of the crown whether or not there are any other contracts of a like nature before he asks us to pass this measure. As I have said, I think that the measure in its own area is perfectly satisfactory and I quite approve of the resolution, but the other point should not be brushed aside so lightly.


George Harris Hees: I am not aware of any.


George James McIlraith: Let me ask one more question. I asked some questions in the house about sales to Cuba. I was given information
Export Credits Insurance Act about certain sales to that country and the information appears on page 759 of Hansard for February 12. Included in the sales there are items classified as strategic goods.


Paul Joseph James Martin: Dynamite.


George James McIlraith: Whether they are strategic in the sense of being of military significance I do not know, but in any event they are on the list of goods exported to that country. I should like to know from the minister whether or not any of the sales to Cuba have been insured or made the subject of credit guarantee under this legislation.


George Harris Hees: I have not got that information here. There could have been sales. I have no idea. I will find out.


Paul Joseph James Martin: Oh, this is amazing.


William Moore Benidickson: Amazing.


George James McIlraith: Surely that is proper information to ask for at the resolution stage, when we are asked to provide an additional $100 million of public funds for this corporation. Surely we are entitled to know these things.


George Harris Hees: I am advised that the answer is no.


Mr. Marlin (Essex Easl):: If the minister does not know, his officials are in the gallery. This is vital information and it is inconceivable that a minister of the crown can get away with simply saying that he does not know. This is information that we must be given.


George Harris Hees: The hon. member for Essex East knows perfectly well that such questions of detail are always asked when we get into committee on the bill after second reading.


William Moore Benidickson: We are in committee right now.


George Harris Hees: We are at the resolution stage.


Murdo William Martin: It does not matter.


George Harris Hees: The hon. member knows that at the resolution stage we deal only with the principle.


Some hon. Members:: No, no.


George Harris Hees: So far as the details are concerned, when we get to the committee stage after second reading of the bill I will be glad to give hon. members all the detailed information for which they are asking.


George James McIlraith: I hope the minister will take some instruction from some source on what is relevant at the resolution stage preceding a money bill. With deference to him,

Export Credits Insurance Act we are entitled at this stage to have all information about what charge is being imposed on the taxpayers. I am somewhat amazed at his argument now, that this is information that we should not have at this stage. It is quite proper information, but if the minister has not got it-


George Harris Hees: If the hon. member will please remember what I said a few minutes ago, he will recall that I said I had been, advised that none of these sales to Cuba was insured through the Export Credits Insurance Corporation. I cannot give any more definite information than that.


George James McIlraith: Yes, the minister can give me more definite information. If his answer is no, that none of these sales have been insured, I will take his answer. Am I to understand that his answer is no, none of the sales have been insured under this act?


George Harris Hees: Mr. Chairman, these sales that have been made to Cuba are private, arm's length, commercial transactions made by individual firms to individuals in Cuba or perhaps the Cuban government. They have not been made through the Export Credits Insurance Corporation.


George James McIlraith: All the sales, or practically all of them, insured under the Export Credits Insurance Act come within that definition. However, if I understand the minister's answer correctly, he now says none of these sales to Cuba have been insured under this act. I will accept his answer. I just want to be clear on that point, as to what the minister means. He will understand my concern with this problem because if he will look at our trade picture, and look at the information given in answers about exports to Cuba and other communist countries on February 12, he will see that a large percentage of the trade increase this year over last year is made up of exports to communist countries.
I believe there are many people today who want to know to what extent that increase in sales to those countries is being insured by Canadian taxpayers through the medium of this corporation. I think it is a proper line of inquiry.
I also can only repeat my concern that the government does not use this act for all transactions which provide export credits insurance or to guarantee export contracts, because I am naive enough to think that the House of Commons must have some watch over the expenditure of the taxpayers' money through the control it exercises in putting a limitation on the capital available under the act.
This is the point I wished to submit for the consideration of the committee, and the point

I want to urge on the minister. I think it is about time, this point having been raised a year ago, that the government made a definitive statement of policy as to why it does not include export credits guaranteed to communist countries under this act, when the former practice was that such credits or guarantees were included when, on somewhat similar occasions, they were provided.


William Moore Benidickson: I am astounded at the fact
that at this stage of the debate there is no indication the minister, who is asking for an additional $100 million under this measure, is willing to give the information requested. This measure was initiated by a Liberal government, and it has proven beneficial to our export trade. I do not believe the minister will deny this. However, the minister is limiting his request to $100 million of additional authority under section 21 A. He knows, as most of us know, that this is the section under which the appointed officers of the crown corporation decide a particular problem is beyond their power to decide, so they take it to the government existing at the time, and of course that means to the cabinet of the day.
The minister said he does not know to what extent there have been encroachments on section 21A, such as the sales to Cuba, and this is the basic reason for parliament's being asked to grant another $100 million. This amount is to be granted to the executive, the cabinet, not the normal officials of the export credits administration. I say that it is common knowledge that most of the encroachments in recent times have been by reason of sales made to countries behind the iron curtain. I have no objection to that. However, the civil servants decided this was a matter beyond their powers of decision, so they took recourse to section 21A which says that when they are not prepared to act in granting export credits they go to the cabinet. This is what they did, and in a big way.
As I say, perhaps I have no particular quarrel with any transaction. However, at this stage I say we are entitled to information as to how the cabinet exercised the authority parliament gave it under section 21A, involving some $200 million. Now, they want another $100 million.


George Harris Hees: If I may interrupt, I would just point out something to the hon. member. I have outlined in detail what we have done under section 21A. I have given him the complete details of the $41 million of contracts that have been completed. I have outlined to him what has made up the $31 million of guarantees and I have mentioned also the $114 million, representing the amount

upon which the cabinet has passed in principle and for which the companies concerned are now negotiating contracts that have not yet been completed. 1 do not know what more information I can give to the hon. member on section 21A. If he would ask me specific questions, I will be glad to answer them.


William Moore Benidickson: The statute imposes upon the minister an obligation to report to the representatives of the citizens in parliament at a certain date all obligations that have been incurred by the executive under this statute. However, this is outdated in so far as we are concerned right now. I think the minister should inform this committee, before we go on to the other stages of the measure, as to the details of all the transactions under section 21A. This includes the very important transactions in connection with grain sold to iron curtain countries. I have no objection to that but I think in the case of China he should give us information as to what extent they have used up the provision that was made possible by parliament-$200 million under this section-and thereby help to explain why they want another $100 million, with the granting of which I believe, if the proper explanations are provided, we would want to associate ourselves, because it is for export trade.


George Harris Hees: Section 21A deals only with providing long term credits for the export of capital goods. There has been no export financing of goods being sold to communist countries. I have given the details of what we have done under the $200 million we were permitted to use under section 21A, and I am afraid there is nothing more I can tell the hon. member because there is nothing more to tell. The export credits insurance, which he is talking about regarding wheat sales, does not come under section 21A. That comes under section 21 and so I have given the committee all the information it is possible for me to do.


Paul Joseph James Martin: There is just one point which I think should be cleared up now. I was listening to the observations of the hon. member for Ottawa West (Mr. Mcllraith) and it seems to me that with regard to sales to Cuba he was making some very important points that were glossed over by the minister.
The minister, when he replied, said that with regard to sales to Cuba these were transactions between those engaged in private business and Cuban interests. These were described, although I do not think the description is apt, as arm's length transactions. What the minister said is that the government had nothing to do with these transactions. I find it unbelievable that the
Export Credits Insurance Act minister should make that kind of statement in the light of the statements that were made in this house on February 12 in answer to questions 149 and 150 put by the hon. member for Ottawa West.
The hon. member in question No. 149 asked:
Have any export permits been issued since January 1, 1961, for the sale to Cuba of items which are on the export control list under authority given to the governor in council by paragraph (a), section 3, of the Export and Import Permits Act; and, if so, how many, for what value, and what items?
The parliamentary secretary to the minister replied as follows:
The answer is yes, 76, the dollar content being $3,269,708.36. The items are 4-77, 5-8. 6-4, 8-43.
Then, in question No. 150 the hon. member for Ottawa West asked:
Have any export permits been issued since January 1, 1961, for the sale to Cuba of items which are on the export control list under authority given to the governor in council by paragraph (b). section 3, of the Export and Import Permits Act; and, if so, how many, for what value, and what items?
The parliamentary secretary replied:
The answer is yes, 100; $1,069,553.30; items 9-1.
In the face of those replies the minister is certainly at once put to the task of explaining the reply which he gave to the observations made by the hon. member for Ottawa West. The minister sought to give the impression that with regard to these matters, involving sales by Canadians to corporations or people in Cuba, the government had nothing whatever to do with those transactions. That is not the situation.


George Harris Hees: Mr. Chairman, if I might explain-


Paul Joseph James Martin: The minister can make his reply when I have finished, but I can only take the minister's words as meaning what the literal interpretation of the English language suggests, and that the minister positively did say these were transactions over which the government had no control whatsoever; they were transactions that were entirely in the hands of private persons.


An hon. Member:: Nonsense.


Paul Joseph James Martin: Someone says "nonsense". That should apply to the observation of the minister because the government is the one that gave permits for these particular transactions.


Mr. Cardiff:: That is your interpretation.


Paul Joseph James Martin: My hon. friend the member for Huron, says "that is your interpretation."


Lewis Elston Cardiff: It certainly is.
900	HOUSE OF
Export Credits Insurance Act


Paul Joseph James Martin: It is the interpretation made by the parliamentary secretary to the Minister of Trade and Commerce in answer to questions put to him on February 12 by the hon. member for Ottawa West. It is not my interpretation; it is the interpretation of the parliamentary secretary. Who is right, the minister or the parliamentary secretary? Are these transactions ones in connection with which the government has some control, some interest? Are these matters those in connection with which there had to be export permits? Do these export permits include explosives, airplane parts, automobile parts-items that can be used.


Mr. Baldwin:: On a point of order, Mr. Chairman. Maybe the acoustics on this side of the house are a little different from those where the hon. member sits but I think the hon. minister said, when he was asked this question, that none of the items which the hon. member for Essex East mentioned-


Paul Joseph James Martin: This is not a point of order.


Gerald William Baldwin: -came within the four corners of this particular legislation for which amendments are now being sought. That having been established, the hon. member must accept it.


William Moore Benidickson: It had not been established.


Gerald William Baldwin: He is now attempting to go beyond the four corners of this particular act and speak about matters which do not concern it.


Mr.   Mc@: Mr. Chairman, I submit the point of order has not been well taken. The point at issue is this: the minister in answer to a question I had asked said with reference to Canada's exports to Cuba that the government had no control over them.


George Harris Hees: On a question of privilege. If I can correct what the hon. member says-
I said we had nothing to do with the making of these transactions, the financing, or the insuring or the negotiations which led to these transactions.


William Moore Benidickson: But this is financing.


George Harris Hees: We have not financed any of these transactions with Cuba. Neither have we insured any of the transactions with Cuba.


William Moore Benidickson: This would permit you to do so.


Mr.   Mc@: The point at issue was that the minister indicated that the government was in no way responsible for these transactions between private individuals here in


Canada and the Cuban authorities. The point being argued by my hon. colleague from Essex East was that that answer, that information, was not correct because in fact the government, through export control legislation, did have some responsibility and some part in it. That is the point of order.


George Harris Hees: We have nothing to do with the negotiation of these.


John Whitney Pickersgill: Five o'clock.


George Harris Hees: Either with the financing or the insuring.


Edmund Davie Fulton: On a point of order, it is five o'clock.


Paul Raymond Martineau: It would seem the point of order raised is more in the realm of a debate so that I do not have to consider it any further, but I do notice by the clock
it is five o'clock.


Mr.   Mc@: Just one minute to five.


Edmund Davie Fulton: This one says two minutes past five.


Paul Raymond Martineau: Shall I report the resolution?


William Moore Benidickson: It is after five o'clock.


Paul Joseph James Martin: I had been speaking when the hon. member for Peace River (Mr. Baldwin) raised a point of order that was not a point of order. I was going to ask you, sir, to assert the alertness we know you possess.


Edmund Davie Fulton: Come, come, now Paul.


Paul Joseph James Martin: The hon. Minister of Justice ought to point out to hon. members that they should not take steps that are contrary to our procedures. I simply want to draw your attention to the fact that at this time I still have the floor.


Paul Raymond Martineau: I shall try to exert my alertness right now and call it five o'clock. It being five o'clock it is my duty at this time to leave the chair and I do so in order that the house may proceed to private members' business pursuant to section 3 of standing order 15.
Progress reported.


Mr. Speaker:: It being five o'clock the house will now proceed to the consideration of private members' business as listed on today's order paper.



INTEREST ACT


[Stage Direction]
On the order:
Second reading of Bill No. C-8, an act to amend the Interest Act.-Mr. Argue.
Frank Howard: Stand.


Gordon Minto Churchill: This bill has been stood twice, and no representations have been made to me by the hon. member in whose name it stands, the hon. member for Assiniboia (Mr. Argue).



RAILWAY ACT


Mr. J. F. Browne (Vancouver-Kingsway) moved: the second reading of Bill No. C-9 to amend the Railway Act.
He said: It gives me a great deal of pleasure to move the second reading of Bill No. C-9 to amend the Railway Act. It came before the house during the last session and is similar to a bill which was passed last session in connection with the Transport Act. Its purpose is to provide that representatives of the trucking industry shall have the right to make application to the board of transport commissioners for the disallowance of a competitive rate when they consider that such a rate has subjected motor vehicle operators to an undue or unreasonable prejudice or disadvantage.
A number of royal commissions of one sort or another have dealt with transportation problems in Canada and with economic problems generally. Each one of those royal commissions has pointed to the benefits which have come to Canada through having a strong, independent trucking industry. Indeed, the latest royal commission on transportation, the commission which is in the process of reporting at the present time, drew attention to the views of an earlier one in this regard. On page 48 of volume 2 of the report of the present royal commission on transportation, 1961, the following appears:
Competition from motor transportation, the main medium in competition with the railways, began to be felt by the railways in the fourth decade of the present century. Statistics on the tonnage moved by motor transportation are not available for the entire period. However, even by 1939, the expansion of the facilities in motor transportation and the competition within the motor transportation industry, according to the findings of a study undertaken for the royal commission on dominion-provincial relations, had:
"resulted in diverting a substantial volume of merchandise traffic in particular from the railways.
In the endeavour to stop this diversion the railways in recent years have made many reductions in their rates for this class of traffic, they have improved their service and they have relaxed their packing requirements and lowered their minimum carload weights."
Thus the emergence of an independent trucking industry in Canada has brought
Railway Act
about savings in connection with freight movements to many people in business in this country.
On the other hand, the royal commission which was set up to study the choice of route for the railroad to the Great Slave lake had this to say about what happened when the railways operate in the absence of competition. At page 26 of volume 1 of the report of the royal commission on the Great Slave Railway, the following statement is made:
Railway monopolies sometimes produce strange results with regard to freight rates. For example, the railway companies in advocating the east route emphasized that an advantage of the east route over the west route is that from Edmonton to Waterways is an easier railway to operate than from Edmonton to Grimshaw. Both railways are operated by the same company, but notwithstanding this argument.
(a)	the railway rate on fuel oil from Edmonton to Grimshaw (the longer and more difficult route) is 55 cents per hundred pounds,
(b)	the railway rate from Edmonton to McMurray (the shorter and easier route, but the route over which there is a monopoly for over half the distance) is 99 cents per hundred pounds.
I think that in the light of the two statements I have just put on record it is clear that Canada needs a strong, independent trucking industry. I say "independent trucking industry" because of the fact that the railways have for the past few years been engaged in acquiring a large hold on the trucking industry. Indeed, the present royal commission on transportation recognizes this fact and points out at page 80 of its report:
We are satisfied that already these resources have made the two largest railway companies between them the two largest owners of truck fleets in Canada.
I believe that such a situation is not in the best interests of transportation in this country. Not only is the independent trucking industry being threatened by being taken over by purchase on the part of the railway but we have the possibility of the railways endangering that part of the industry which is left, through rate wars which could have the effect of putting the remaining independent firms out of business. This danger, also, is clearly recognized by the royal commission on transportation. At page 66 of the commission's report, the following statement appears:
Enlightened management in their own interest would not knowingly carry goods at a rate which yielded revenues below the direct out-of-pocket costs, that is, those costs directly assignable to the traffic. To persist in the practice for any considerable length of time would ruin the company. Other things being equal, the regulatory provision for minimum rate control would be redundant.
However, other things are not equal. Because of their relatively enormous size and resources, and the relative permanency of investment compared to firms engaged in other modes, the railways could create intolerable uncertainty in the

Railway Act
trucking industry by sporadic rate wars, so that an efficient trucking industry could not persist.
Further down the page it states:
The effective existence of minimum rate control on railways will not, in itself, eliminate the possibilities of rate wars either between railways and trucks, or between trucking firms. The large firm can always destroy the small if satisfied that the fruits of victory are sufficiently sweet.
Then the report goes on to define one other course that might be taken. It states:
As instruments of national policy certain exemptions from these laws were necessary.
The commission was referring to combines legislation. Then the report says:
The use of traditional exemptions for restrictive purposes should not be tolerated.
I can only assume that the railways are taking every possibility of restricting competition between transportation agencies by the purchase of trucking firms. The report continues:
Part of the economic test of restraint of competition by rate practices is to determine whether the aggregate net return to be realized from the traffic moving under the new rate exceeds the net return from traffic moving under the former rate. If this is the case, the rate is not in restraint of competition. If it is not the case, further examination may be warranted. The board of transport commissioners could be requested to supply the relevant information to the Department of Justice.
I would suggest it is very necessary that the board of transport commissioners be in a position to determine whether or not goods are moving over railway lines at compensatory rates. It seems to me it is impossible for the board to have knowledge of the exact situation with regard to every rate that is put into effect by the railway companies. Indeed, they cannot possibly begin to consider each one of them. There is provision in the Railway Act at the present time for certain safeguards. The act states that rates must be compensatory and that they must not be lower than is necessary to meet competition. The trucking industry has no status before the board of transport commissioners and as they are the main people who would be in a position to know whether rates were established at dangerous levels they are the ones who logically should have the right to appear before the board and draw to the board's attention the fact that this situation has occurred.
It may be said that having a particularly low rate benefits a particular shipper at a given time. If a trucking firm is put out of business because of that fact and the competition disappears, it seems to me it would not be very long before the rates went back up again. In fact, the very people who are entitled to appeal to the board under the present

legislation are those who would be the least likely to do so because they would benefit from the abnormally low rate.
While the purpose of all our transportation legislation should be to bring about the lowest possible rates it is also true that we wish to have established rates that are capable of being maintained and we wish to ensure that there will be a continuity of service at those rates.
The type of situation that is mentioned in the report of the royal commission, that the independent trucking industry could be easily put out of business by sporadic rate wars, is a dangerous one. On the other hand, I do not suggest that the trucking industry should be in a position to prevent the railroads from establishing the rates necessary to meet competition or rates that can be maintained at economic levels.
I do not think the board should be empowered to make any change in the rates until it has been clearly established that a given rate is uneconomic. At previous times the board did have the power to set aside a rate established by the railroad until a determination was made. The railroads objected strenuously to that, and I think properly so. However, I do not see the same objection being taken to the board having power to set aside a rate after it has been established that it is uneconomic, nor can I foresee any objection to the trucking industry being allowed to go before the board when that situation exists.
As I stated earlier this bill came before the house last session. I was pleased that the principle of the bill received endorsation in the report of the royal commission on transportation. In my remarks last year as reported at page 8141 of Hansard of September 8, 1961 I stated:
On the face of it, if two industries are on equal terms, of course free competition itself would ensure the lowest possible rate to the consumer and that is the ultimate result we want to attain. However, the conditions as between the trucking industry and the rail industry are not equal by any stretch of the imagination. For one thing, the resources of the railway are far beyond those of the average trucking firm.
I am sure you will agree, Mr. Speaker, that those words are strikingly similar to what is contained in the report of the royal commission. While the report makes no reference to the specific amendment I propose to the house, at page 177 of the report it is stated:
The acts which cover those areas of transportation where our investigations lay are chiefly the Railway Act and the Transport Act. Both of these deal almost entirely with aspects of railway regulation. Both will require careful and extensive revision in the light of changing circumstances and

particularly in the light of policy changes undertaken to adjust the loss of the monopoly position of railways in overland transportation.
The report goes on to advocate that a committee of representatives of the regulatory agencies concerned, the Department of Transport and the Department of Justice should be established to consider these matters.
I believe there is a definite sense of urgency about this matter. It is quite clear from the comments made in the report of the royal commission that the amendment I have proposed in Bill No. C-9 is necessary. One can take no other interpretation from the remarks made throughout the report than that this legislation is necessary and I hope it will commend itself to the house.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, last September I had the opportunity of speaking in support of this bill which the hon. member for Vancouver-Kingsway (Mr. Browne) is introducing again and I wish to reiterate some of the comments I made on that occasion.
To begin with we must recognize that transportation has undergone a tremendous change from the days of the early railroads. Most of our regulations governing transportation date back to the time when there was neither a trans-Canada highway nor highway transports. The only means of transportation at that time were the railroad and the horsedrawn vehicle, but one could scarcely describe the latter as a competitive mode of transportation.
We are now confronted with a situation which demands revision in our thinking with regard to transportation. We have spent millions of dollars in order to construct a highway system from coast to coast, and more millions are being spent by the federal government, by the provinces, and by the municipalities, in order to provide all-weather roads for the purpose of motor transportation which, in this modern day and age, has assumed an importance of proportions which were not envisaged when regulations were formulated by the federal Department of Transport.
The bill under discussion, if approved, will bring about recognition that this important branch of the transportation industry, trucking, exists for the purpose of serving an ever increasing number of Canadians. It should, therefore no longer be looked upon as an unimportant adjunct to our older established methods of transportation, namely the railways and lake shipping.
The trucking industry, from a very small beginning in the twenties, has now attained a status of considerable proportions, with an investment in excess of $1 billion and carrying more than 100 million tons of merchandise yearly. The Canadian trucking associations of 26207-1-58i
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Canada in their submission to the government last June emphasized that the rapid growth of the country and the spectacular progress of technology during recent years had profoundly changed the structure of Canadian transportation services. A serious problem has been created of adjusting transportation policies to meet the new situation created by the public demand for a more efficient and up to date transportation service, such as having goods delivered to your door. This has been recognized by the royal commission on transportation.
All this bill provides is the right of appeal to the board against any discriminatory rates, and the right to be heard in open court. I am particularly keen about the passage of this bill because the lakehead cities of Fort William and Port Arthur are located approximately 850 or 900 miles from Toronto, and approximately 420 miles from Winnipeg.
As a result of the distance between the heavier centres of population, we have never received due consideration from the railways in so far as fair freight rates are concerned. I can give an example of this discrimination. The freight rate on canned goods shipped from Chatham, Ontario to Fort William is $1.57 per one hundred pounds. When a wholesaler in Fort William ships these canned goods to Geraldton or Marathon, there is a charge of $1.37 per one hundred pounds for a journey of approximately 200 miles. As I say, this came about as a result of the horizontal freight rate increases that occurred during the last ten years. It was this policy of horizontal rate increases which damaged our chances to compete with other parts of the country, and which worked to our considerable disadvantage in comparison with the eastern parts of the province of Ontario.
This unfair policy, which we hope the recommendations of the royal commission on transportation will remedy in due course, has had the effect of turning shippers to and from the lakehead to motor transport for some of their needs. It is for these cogent reasons that northwestern Ontario has suffered more than its share from unbalanced freight rates which directly or indirectly everyone must pay. Higher freight costs, I submit, have a direct relationship with higher than average unemployment.
I think we should preserve the competitive spirit in Canadian transportation. The government should preserve competition as it battles cartels and combines. An independent trucking industry should be given an opportunity to compete and survive for the benefit of all Canadians. The passing of this bill will at least give the trucking industry a

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chance to speak and fight for itself, from which in the end no one would suffer, but rather each would enjoy the fruit of his labour.
I express the hope, Mr. Speaker, that this bill will be allowed to come to a vote. To me it does not seem to make sense that bills and resolutions should be introduced by private members when everybody knows they are going to be talked out. In my opinion, any question worthy of debate should come to a vote. I believe members should be allowed to vote on it and that they should be free to vote as they see fit without necessarily committing to any policy the government or the party to which they belong, if the majority does not desire to follow the party line. In my opinion these resolutions and bills should come to a vote. I believe the move suggested would be a popular one and that all Canadians would applaud if the government were to come out and say, "We will allow these bills and resolutions presented by private members-"


Mr. Speaker:: Order. I think the hon. member is departing a bit from the subject matter of the bill. The rules are clear with regard to the procedure in the house on such bills and it is not necessary to debate what the members' rights are.


Hubert Badanai: I am merely trying to state my opinion. However, in closing I commend this particular bill to hon. members and ask them to vote for it. To my mind this bill is long overdue. It will give to an industry an opportunity to compete on equal terms with other modes of transportation. I think the trucking industry deserves at least that recognition. If the bill comes to a vote, I hope the majority will vote for it.


Mr. Q. A. Martini (Parliamentary Secretary to the Minister of Transport):: Mr. Speaker, the subject matter of this bill is part of a broad problem of transportation which has been the subject of a royal commission inquiry. This commission is now in the process of reporting its findings and our department does not feel it wise that any legislative change should be made until the commission has made its final report and the government has had a chance to study the whole question. In the meantime we are pleased to have the views of hon. members on the subject and they will be taken into consideration when change is to be made.


Mr. E. W. Brunsden (Medicine Hat):: As the seconder of this bill, Mr. Speaker, perhaps I may be allowed a few minutes in which to say that the presentation of the case by the

hon. member who first spoke was excellent and clear. I completely endorse everything he said.
My friend the hon. member for Fort William (Mr. Badanai) made reference to the changes that have taken place in recent years with respect to transportation. Perhaps in no other part of Canada has this change been more evident and more pronounced than it has been in the prairie provinces. Those hon. members who live in the west will remember the days when the railway train was a vital factor in transportation. If you lived in a small town in those days the arrival of the evening train and the unloading of the express was an event. Tremendous volumes of materials of all kinds were transported by train, and a truck was a rarity. Today the truck is perhaps the dominant factor in the transportation of a large number of items. It may be of interest to the house to know that quite recently there was a trial run of live cattle from Alberta to Toronto. This is an indication of what is happening.
In my particular area we have had and still have a large number of independent trucking companies. Some of them have failed. They may have failed through inefficiency or they may have failed through lack of a keen appreciation of their particular problem. However, some of them have failed by virtue of the intrusion of competitive trucking systems supported by large institutions.
It is the purpose of this bill, as I see it, to give some protection to these independent companies in order to make it possible for them to have recourse to a referee. It is my sincere hope that in the not too distant future we may see on the statute books of Canada legislation of this type.


Mr. R. M. T. McDonald (Hamilton South):: First of all, Mr. Speaker, I should like to congratulate the hon. member for Vancouver-Kingsway (Mr. Browne) on introducing Bill No. C-9, to amend the Railway Act. During the past several years I have been very much interested in this problem which was so well outlined by the hon. member. I was also pleased to hear what the hon. member for Hamilton East (Mr. Martini), the new parliamentary secretary to the Minister of Transport, said with regard to the royal commission. In this regard, however, I might express the hope that the royal commission will publish its findings very shortly. The reason I say this is that the independent trucking companies across Canada are, I think, under unfair competition at the present time. It has been indicated by many royal commission reports that competition is

the essence of good rates. I think it should be said that fair competition is the essence of good rates.
When the C.N.R. and the C.P.R. went into the trucking business they did so in a wholesale way. They were complaining that the trucking companies as a whole across the country were being unfair and cutting rates but I really do not think that was the case, as has been proved by the hon. member for Vancouver-Kingsway (Mr. Browne). I think the trucking industry as a whole caused rates to be more in line with fair competition. It disturbs me greatly that a large crown corporation such as the C.N.R. can enter upon the wholesale purchase of trucking companies across Canada with the taxpayers' money and thus jeopardize the interests of private trucking operators who are making a contribution to the country without any assistance from the taxpayer.
From time to time we have heard that the railways must get into the trucking business. At the present time the railways of Canada control the running rights from the east coast to the west coast and I do not believe this is fair competition with the trucking industry. I know that in Hamilton we have a great many independent trucking concerns who have made many complaints to me about this situation. With all due respect to the hon. member for Medicine Hat (Mr. Brunsden), I should like to point out to him that the independent trucking firms across the country have not come to the government of Canada asking for protection, subsidies, handouts or tax concessions. They have not asked for any of these things. All they have asked for is fair competition so that they in turn can operate their businesses.
I think the railways, especially the C.N.R. which has a vast amount of money at its command, are being most unfair in their attitude toward the trucking firms. I know they are exerting a great deal of pressure so that the independent trucking industry will not have the benefit of legislation such as is now before us. I might indicate certain ways in which they have done this. The C.N.R. and the C.P.R. have appointed as directors of their newly acquired trucking companies men who are also directors of the truckers associations in the various provinces, and every time this problem has come up at some of the association meetings the directors of these crown trucking firms have objected to the independent operators' plea for this type of legislation. I think it is very difficult to comprehend the power of the Canadian National Railways to work against the independent operators.
I will not mention the rate, but I know that the trucking rate from Burlington, Ontario to Calgary and Edmonton was fixed at
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a certain figure. In the particular instance I have in mind the trucking firm was rendering a great service to the shipper. The trucking firm could go right to the loading dock of the company, transport the load out west and discharge it at the loading dock of the receiver at Edmonton or Calgary, whereas formerly the railway would not pick up the material at the loading dock. The persons shipping it had to take the material to the freight yards for loading on a car. The car was then taken to Calgary, sat in the yard there for a day and a half and some two or three days later the material was delivered.
The trucking firm provided a service whereby they went right to the loading dock of the company and took the material to the loading dock of the receiver in Calgary. I was dismayed to find out that the C.N.R. had bought a very large trucking firm that transported a considerable amount of goods from Burlington, Ontario, to Calgary and had cut some 78 cents a hundred off the rate. The firm that had been doing the job was very disturbed about this. They had had the contract for a great many years, and had secured it through fair competition. They submitted their tender, as did five or six other trucking companies, got the job, and found they were able to carry it out economically and make a fair return.
The C.N.R. came along and took this contract away from them for a certain period of time by cutting 78 cents a hundred off the rate on truckload lots. The firm that lost the contract told me that 78 cents off the rate would put their company about 20 per cent in the hole. I am trying to show that there is unfair competition.
I think it should also be pointed out that in the bill of the hon. member it is quite clear that all he wants to do is to give the trucking industry the right to appeal to the board of transport commissioners so that they can present their arguments there, protect themselves and keep competitive rates throughout the country in line. Then we will not find so many bankruptcies. I am not using the word "bankruptcy" to try to make it appear that the situation is more serious than it is. However, it is really very serious.
My understanding is that the C.N.R. has spent some $10 million to $20 million on the purchase of trucking industries throughout the country. The directors of the firms concerned are still acting as directors of these leasehold companies. I would be very interested in finding out whether in fact these subsidiaries are paying taxes. People can only pay taxes if they make money and we all know that the C.N.R. never makes any money. They are always in the hole and

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coming to parliament to ask tor money. I would be very interested in finding out whether these subsidiaries of the C.N.R. that control trucking industries across the country are in fact paying taxes and are really in fair competition with the independent trucking companies. I wonder whether these subsidiaries are legitimate business in the same way as the independent operator who has to pay taxes.
I do not think railway monopolies are a good thing. The hon. member for Vancouver -Kingsway has proved many of his points by quoting from royal commission reports which indicate that free competition is necessary. The hon. member for Fort William (Mr. Badanai) indicated that royal commissions on maritime transportation felt that competition was necessary.
I think that the government must take action on this matter. I hope that the legislation will be passed. If there are other speakers who wish to speak I hope they will do so and impress upon the house and the government the need for action in this matter at this time. The Minister of Transport (Mr. Balcer) says that the government will act when the report of the royal commission on transportation is received. Some two and a half years ago when the C.N.R. first went into the trucking business people came to me, as they did to the hon. member for Vancouver-Kingsway, and told me just what would happen in Canada if the railways went into the trucking business. It is now taking place.
The C.N.R. first of all purchased one line from Toronto to Edmonton. Then they purchased another line from Montreal to Halifax. We find now that the C.N.R. and C.P.R. control the running rights from coast to coast and can arbitrarily set the rates at which they will transport products. We are subsidizing the railways to a great extent in my opinion and I simply want to make sure that the subsidy we give them is not going out through the back door to these leasehold companies in order to try to put the independent trucking operators out of business. I say again the trucking industry as a whole is not asking for protection, subsidies, tax considerations or anything like that. All the trucking industry desires is to be able to go to the board of transport commissioners for a fair hearing, and I hope that they can be given this opportunity.


Mr. John Smith (Lincoln):: Mr. Speaker, I welcome the opportunity to speak briefly on this bill. I do not intend to go into all the details connected with the bill. I offer my support of the measure in principle and to mention some of the important factors that make it necessary for us to keep a healthy road transportation system in Canada. I hope that

if it is not possible to have a vote on this measure tonight the Minister of Transport (Mr. Balcer) will introduce it again in some form in the not too distant future so that we will be afforded an opportunity of doing something definite about this problem, because the bill has a good deal of merit.
I should like to congratulate the hon. member for Vancouver-Kingsway (Mr. Browne) for introducing the bill at this time, and there is no better way in which I can do that than by supporting the principle of the bill. Road transportation by motor vehicles has become a very important part of our transportation system. This system has been developed principally by private enterprise and, over the years has developed into a very efficient system. It is rendering great service to Canada and strengthening our economy.
During the past 25 years we have seen a great many branch railway lines abandoned by order of the board of transport commissioners. I am not quarrelling with that. However in many instances industries in those areas were left without a means of transporting their goods from one place to another. Had it not been for the fact these independent trucking companies provided a service, many of these industries would have been forced to close down. The trucking industry, in some cases, is really the lifeline of secondary industry. That, in itself, is a most important factor and one which should compel us to do all we can to keep the industry stable and in a good financial position.
The two railway companies, the Canadian National and the Canadian Pacific, are getting into the trucking business in a big way. Much of our mail and express is now transported by trucks owned by the two railway companies. This is the business of the railways, and there is nobody questioning their right to do so. However, when the railway companies enter into competition with private trucking companies, I think we should make sure that the private trucking companies are protected from unfair competition. None of us object to competition, and I am sure we do not object to the two railway companies entering the trucking business in a way that is fair and competitive. However, the great resources behind these two companies would enable them, if they wished to do so, to undercut the private companies to such an extent that the private companies may be forced out of business.
There is one service being built up in Canada today which I am very pleased to see. It is a service whereby the railways and the trucking companies work together. I refer to the piggyback service. The trucks are loaded on railway cars which transport them from one place to another. At one time it was

mostly the railways that participated in this service, but now the trucking companies all over Canada are taking advantage of it. I believe this is a place where the two transportation systems can co-operate for the benefit of Canada. We do not want to get into a situation in this country as they did in Great Britain a few years ago. Great Britain nationalized the road haulage transport system and it was turned over to the railway companies for operation. The railway companies ran it for only a few years, then it was turned back to private enterprise, at which time the system was in a rundown condition. This is another reason for keeping the road transportation system in Canada in the hands of free enterprise.
Mr. Speaker, the purpose of this bill is to give the independent trucking companies the right to appeal to the board of transport commissioners against unfair rate cutting. This does not give the trucking companies great powers or a means of exploiting the public. However, in my opinion, it is something that is becoming more important as time passes. We know that if a railway company in operating a branch line at a loss wishes to abandon a line or increase rates, It has to go to the board of transport commissioners for permission. The road transportation system as a part of our transportation system, deserves the same consideration so I heartily endorse this measure. As I say, I hope that if the bill does not receive approval at this time it will in the not too distant future. This is not a bill granting a monopoly to anyone. It is a bill to prevent the big railway companies from monopolizing a business which was built up by these independent trucking companies, built into a very efficient business, and we should do what we can to preserve their undertaking.
(Translation):


Mr. V. F. Dubois (Richmond-Wolfe):: Mr. Speaker, last year I had the privilege of supporting a bill introduced by the hon. member for Vancouver-Kingsway (Mr. Browne), and this year I am pleased to speak on a similar bill whose purpose is to help firms or individuals engaged in the trucking business.
There are several business concerns of that type in my riding and in the neighbouring area, and I feel it is our duty to help them by supporting a bill such as the one which is before us today.
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If we examine the beginning of the trucking industry in our area, we find that this service was initiated by individuals at the cost of great difficulty and hardship; but they wanted to serve the people and their efforts were successful, because they were able to expand their business constantly and to provide an adequate service to the public according to the needs of the time.
Here is what we find on page 6 of the brief which was submitted to the Minister of Transport (Mr. Balcer) in November 1960 by the Quebec Truckers' Association Inc.:
Indeed, motor transportation (both private and commercial) accounts for about 13.1 per cent of freight traffic in Canada and pipe lines for 6.3 per cent; the greater part-over 80 per cent-of freight transportation in Canada is still done by rail and water.
Because of their unique bulk transportation facilities, railways still handle the largest volume of freight per year. Therefore, the trucking industry has just taken its share of the traffic volume due to the development and economic progress of Canada.
Mr. Speaker, one who travels throughout Canada, from east to west and even north, easily appreciates that the trucking industry renders invaluable services to all the areas it serves. The truckers do not enter into direct competition with the railways because the localities served by the railways cannot be served or are hardly served by the trucking industry.
Now, if the railways are going to take over trucking services or to develop their railway services by completing them with a trucking service, they enter into direct competition with those private firms which they want to supplant in localities not served by a railway and where the population cannot depend on a similar service.
In June 1961, the Canadian Trucking Associations' Inc. of Ontario presented a brief to the Prime Minister (Mr. Diefenbaker) and to the members of the cabinet. On page 3 of that brief, one could read the following:
While the trucking industry has tried to settle its own problems, it has also deemed it necessary to make representations to the governments in order to suggest, not that it receive special consideration, but that a policy be adopted which would enable it to operate with maximum efficiency and economy and under fair conditions of competition between the trucking industry and other means of transportation.
We have seen, and we still see, that even the Canadian truckers associations are not satisfied with-
Royal Assent

(Text):



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act to amend the Old Age Security Act.
An act to amend the Old Age Assistance Act.
An act to amend the Blind Persons Act.
An act to amend the Disabled Persons Act.
An act to amend the War Service Grants Act.
An act to amend the Veterans Insurance Act.


[Stage Direction]
The house resumed consideration in committee of the following resolution:
That it is expedient to introduce a measure to amend the Export Credits Insurance Act to increase the maximum liability at any time of importers under outstanding instruments the payment of which is guaranteed by the corporation under section 21A of the act, from $200,000,000 to $300,000,000; and to provide further for a certain change in connection with the administration of the act.
Paul Raymond Martineau: It being past six o'clock I do now leave the chair.
At seven minutes past six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
George Harris Hees: Mr. Chairman, this afternoon I erroneously said that we had not insured any sales to Cuba. What I should have said was that we had not financed any sales to Cuba, nor have we financed any sales to any communist country.
As hon. members opposite know, we have always insured sales to any country, including communist countries, from the time that the act was first put into force, in 1944; and during the term of office of the former government several millions of dollars of sales to communist countries were insured.
I shall be glad to table, when it arrives, a report which shows, by countries, the amount of insurance that has been issued for the 12 months as reported to the end of December, 1961.

Further to what I said this afternoon with respect to exports to Cuba, I have reconfirmed that no explosives of any strategic significance have been export licensed from Canada to Cuba.
I explained to the committee, in reply to a question regarding the agreed strategic materials list, that it is a classified document and I am unable to table it. Perhaps I may remind hon. members of what has been stated before in the house with respect to the establishment of the list of materials which are listed as strategic.
Hon. members will recall that there is an organization in Paris called COCOM. The initials stand for "Co-ordinating Committee". The purpose of this committee is to co-ordinate national policies on the strategic classification of materials. As far as control of materials is concerned, international trade is, to all intents and purposes, indivisible. If one country supplies what another refuses, control would be of no avail. There is therefore this arrangement for reaching agreement on what would be classified as strategic.
The governments which collaborate in COCOM are those of all the NATO countries, with the exception of Iceland, but with the addition of Japan. This is the group of countries which, in effect, sets the common standards of what are strategic materials. Canada and the United States are, of course, members of COCOM.
Everything on the strategic list established by COCOM is included within our export control list-a list which has been in existence for many years, as members opposite well know-which is amended from time to time.
Ordinary commercial grades of explosives such as those used for quarrying, road construction and other excavating purposes, are not included in the COCOM list nor are they included in our export control list, and when of Canadian origin may be exported without permit to any destination.
It is my understanding that no more than what might be regarded as small commercial shipments of such explosives have been made to Cuba.
I thought it advisable to give the committee this more detailed explanation. I am well aware that there is an extreme sensitivity on this subject in the United States, and that there has been a tendency apparent in the United States to exaggerate, and possibly misunderstand, press reports emanating from Canada regarding the type of trade which is being carried on with Cuba. We have satisfied ourselves from our own investigation that no arms and ammunition, or other goods

of recognized strategic significance, are moving in our trade with Cuba, and any inference to the contrary certainly tends to do Canada a disservice in our relations with our American friends.
As I have said, Mr. Chairman, I will table as soon as it arrives a list showing the countries for which we have insured exports during the past year and the monetary value of those shipments. The specific commodities in each case are not available for the moment. They will become available when the annual report of the Export Credits Insurance Corporation is made, I believe early next month. At that time the complete list of commodities will be made available. I am unable to present that information at this time.


George James McIlraith: Mr. Chairman, I should like to deal with the first explanation made this evening by the Minister of Trade and Commerce having to do with the sales insured under the Export Credits Insurance Act. The minister indicated it had been the practice under the former government and under the present administration to insure contracts for sales of goods to communist countries. So far as I know the contracts of insurance covered one commodity only, wheat. The list of contracts he gave earlier today included the sale of wheat to Poland.
In the light of that explanation of the practice of the present and former governments, in the light of the fact that parliament has enacted this legislation providing for assisting exporters by insuring payment of their accounts and, under section 21A, by guaranteeing payment, it is incredible that the government within the past year should single out the insurance of the one wheat sale agreement with China and refuse to bring the guarantee or insurance of payment of that account-whichever they did

under this act. I can only conclude that the reason for that omission in the face of the past practice is that the government did not wish to disclose the contract of insurance. Under this act it becomes necessary to disclose contracts of insurance and also under this legislation there is a limit on the amount of insurance that can be given. Parliament in that way exercises direct control over the government's expenditure of public funds. As I say, we sought to get information on this subject. We have been completely unsuccessful in our efforts to get the relevant information. I would once again ask the government why the insurance or guarantees- whichever was done on the sale of wheat to China-was not brought under this act. This act is the method provided for giving parliamentary control over that expenditure or the commitment of public funds.
Export Credits Insurance Act
I do not propose to digress into the merits of what was done. I cannot do so because it is impossible for me, as a parliamentarian, to get the information. It seems to me that proceeding in this manner is the wrong way of proceeding. It also seems to me that since this legislation provides a control over the amount of money being committed for export credits insurance, all government insurance of sales contracts should come under it. I raised the point earlier this afternoon. I do not propose to be repetitious about it. However, I think it is a point of major significance. I also think that there must either be a much fuller explanation than that which has been given or some action must be taken that would correct the present unhappy and wrong condition.


George Harris Hees: The list I was referring to has now arrived, Mr. Chairman, and I would ask the permission of the committee to table the list giving the countries and the amounts of export credit during the past year 1961 for those countries.


George James McIlraith: Under section 20 or 21A?


Gerald William Baldwin: Order. I would ask the hon. member to table the document when Mr. Speaker is in the chair.


William Moore Benidickson: Is all this table relevant to exports under section 21A?


George Harris Hees: No; it is relevant to export credits under section 21. The matter was discussed at some length this afternoon and this information was asked for. I said I should be glad to give it and I am very glad to do so. I ask permission to table the list. As we have had considerable debate on this matter, would it be possible for the house to agree to go to the second reading stage of the bill at this time?


Some hon. Members:: Agreed.


Lester Bowles Pearson: In his remarks the minister referred to the COCOM list. This is the list of strategic materials agreed on, I gather, by the members of NATO and of which export is forbidden by the NATO countries to the Soviet union and other communist countries. The minister has said that dynamite, in the form at least in which it was exported to Cuba, is a non-strategic material and therefore is not subject presumably to the limitations or prohibitions of this agreed list. I should like to ask him whether dynamite and explosives are not, in fact, on this COCOM list. I should also like to ask him whether he can give the assurance that no commodity or no item on this list which has been agreed on by the NATO countries has received an export control permit for Cuba.


George Harris Hees: That is correct.

Export Credits Insurance Act


Lester Bowles Pearson: Then, from that answer, am I to draw the conclusion that explosives as such, including dynamite, are not on the COCOM list? If the minister's answer is correct, it means that list does not cover the export from Canada of explosives to the Soviet union or communist China?


George Harris Hees: As the Leader of the Opposition knows, the COCOM strategic list is not a public list by agreement among the countries concerned. I have assured the hon. member and the house that dynamite such as that which was shipped to Cuba is not on the COCOM list. I am not making any sweeping statements on what things are or are not on the COCOM list, as the COCOM list is not a public document by agreement among the signatories to that agreement.


Lester Bowles Pearson: I do not quarrel with the minister's position with regard to the secrecy of his list. If he says that this list has not been made public and that the items on it which are prohibited for export to communist countries are not available in any of the countries that subscribed to this list, if he says that is the situation, then naturally I do not go beyond his statement. However, if I interpret his words correctly, he has also said that the kind of dynamite-and I do not know how you can divide dynamite into categories-which was exported to Cuba is not on this prohibited list to communist countries and therefore because it is not on this list it is not a strategic matter or material and can be exported to communist countries. It seems to me this is a very strange way in which to control strategic materials.


George Harris Hees: I understand this particular type of dynamite, as well as dynamite caps which were included in this shipment, for use in the building of roads and for other domestic uses, have been so considered by the countries that make up COCOM, and have not been considered to be a strategic material.


William Moore Benidickson: You might blow up your enemies.


Mr. Campbell (Stormont):: On a point of order, Mr. Chairman, may I say this. If the Leader of the Opposition had any experience in construction or in logging, surely he would know that dynamite is essentially an industrial material. It is in the same category as are picks and shovels, only it is in a more powerful form. As the minister said earlier, anything can be used as a weapon, even a hat pin. However, as a strategic material or as a war material dynamite is obsolete.


William Moore Benidickson: It still kills people.


Paul Joseph James Martin: I know the Leader of the Opposition is grateful to the hon. member for this clarification. I am sure no one is more grateful for the elucidation he has given than is the Minister of Trade and Commerce. I share the difficulty and the concern of the Leader of the Opposition. The hon. member said that explosives, when intended for industrial use, are not on the unpublished COCOM list. But the minister himself used the phraseology that no explosives of any strategic significance have been exported. However, the fact is that explosives have been exported to Cuba. Having in mind the fact that Cuba is not as intensively armed as are some of the great powers, it does not require a great exercise of one's imagination to conceive of the possibility that there is a military value in the use of even industrial explosives. However, the minister is satisfied with his own concept and advanced his definition to resist suggestions that have been made on this subject. But leaving explosives aside for the time being, what about other substances? What about synthetic rubber which has been sold to Cuba in the amount of some $736,000, so we are told in the Financial Post of February 3. Where does this synthetic rubber come from? Does it come from the Polymer plant? Was the Polymer plant not set up for a particular purpose during the war? What about sheet and strip steel in the amount of $712,000? Is this material not capable of being used to assist as a military arm? What about electric transformers in the amount of some $567,000 which have been shipped to Cuba? What about steel pipes and tubes in the amount of $312,000. What about industrial chemical specialties and explosives in the amount of $360,000? What about aircraft engines and parts in the amount of $156,000? It is true that these items in their total dollar value cannot compare with the figure resulting from the sales of wood pulp and agricultural items, which are the largest group, but none the less what we are concerned about here is not so much the dollar value as the principle involved.
The minister, I am sure, would be the last one to engage in a commercial undertaking with Cuba of this kind, one that would assist that country in the furthering of policies directed against the ideological interest which the Minister of Trade and Commerce and all of us in this house support. But has he not been put in this embarrassing position, as a result of the suggestion that these articles can be used by the military arm in one way or another, and does he not owe the house an explanation? I hope it will be an explanation that will be more airtight than the one he has given us about explosives. I think that the



IS. 1962

[Stage Direction]
minister owes to the country and to this house a more precise and complete explanation than the one he was able to prepare since the adjournment at six o'clock. Perhaps the minister has a supplementary reply. He seems eager to reply. I am sure we are all very eager to listen to that reply.
George Harris Hees: It is very nice to know that for the first time since I have known the hon. member for Essex East he is interested in hearing somebody else speak in this house. The hon. member has dealt with what he considers to be military supplies or supplies having a military potential. In other words, I take it from what he has said, and I should like to have his confirmation of this, that he is dealing with supplies which an army, for instance, would find very necessary for its operation, in fact the kind of supplies without which an army could not operate. Is that correct?


Paul Joseph James Martin: I was referring to the kind of supplies that could be used for purposes that are obvious to everyone.


George Harris Hees: I take it that the hon. member agrees because he does not deny it.


Paul Joseph James Martin: What I said was-


George Harris Hees: I have the floor, if you please. The hon. member is not willing to answer the question so I will go on. He was referring to materials without which an army cannot operate, vitally necessary materials for carrying on a war. I had some experience, Mr. Chairman, with the kind of materials an army does need to carry on a war, because for a number of months I was a staff captain overseas, and it was my responsibility to see that the fighting troops had the materials they needed. Therefore I have some knowledge in this regard. Two of the most vital necessities for any army are food and medical supplies. If we had run out of food or medical supplies, our whole operation would have bogged down and obviously we would have been defeated. These are vitally important supplies.
A few days ago the Prime Minister very ably put on the record the volume of goods which, up until quite recently, the United States had been supplying to Cuba. These goods comprised two categories, one food and the other medical supplies. So, Mr. Chairman, the hon. member is trying to make something out of nothing. Anything that one wants to think of can be construed as potential war material because it is material with which an army cannot do without. For instance, shoes, shirts, ties, underwear, overcoats, hats, anything at all that an army needs can be so construed. I can tell the hon. member for his information that when the weather gets cold
Export Credits Insurance Act or wet there are certain articles of clothing without which an army cannot operate and without which the whole military operation would break down.


William Moore Benidickson: They do not need ties.


George Harris Hees: Any article any hon. member can think of is vital if you want to go down that low and use that kind of thinking. I would say that what hon. members opposite are intent on doing by their speeches is one thing and one thing only, namely, doing everything they can to create the worst possible impression in the United States and the greatest possible friction that can be created between this country and the United States.


Lionel Chevrier: That is impossible. You have done that yourself.


George Harris Hees: I would say that even the hon. member for Essex East would agree that perhaps that is a high price to pay for a headline.


Lester Bowles Pearson: You are making the headline.


Lionel Chevrier: You made one much worse.


George Harris Hees: You have done your best; you have contributed.


Paul Joseph James Martin: Mr. Chairman, we have always thought that the Minister of Trade and Commerce was among the most serene and calm of the ministers in the government.


George Harris Hees: I am completely serene.


Paul Joseph James Martin: But tonight, unfortunately, he has established a standard for himself that we hardly recognize because the hon. gentleman has lost his temper.


George Harris Hees: No, he has not. He is just as happy as he can be.


Paul Joseph James Martin: Under these circumstances we will readily understand that it is not possible for him to put forward the best kind of case as he normally would be expected to do. I suggest that in his own interests, and it is his interests we are concerned about, he ought to resort to the characteristic serenity and calm which we recognize him as usually possessing.
I reminded the minister before adjournment of certain replies that were made on his behalf on February 12 by his parliamentary secretary to questions asked by the hon. member for Ottawa West. Perhaps it is worth while repeating one of these questions. This was the first one:
Have any export permits been issued since January 1, 1961, for the sale to Cuba of items which are on the export control list under authority given to the governor in council by paragraph (a), section 3, of the Export and Import Permits Act; and, if so, how many, for what value and what items?

Export Credits Insurance Act
The minister's parliamentary secretary, who is sitting beside him now, replied as follows:
The answer is yes, 76, the dollar content being $3,269,708.36. The items are 4-77, 5-8, 6-4, 8-43.
I have before me the Canada Gazette, volume 96, for January 24, 1962. Here is 5-8:
Aircraft and helicopters, aero-engines, and aircraft and helicopter equipment, as follows:
(a)	Aircraft and helicopters, not elsewhere specified, and specially designed parts therefor:
(b)	Aero-engines, not elsewhere specified, and parts therefor:
(c)	Ground and airborne equipment, not elsewhere specified; developed solely or used mainly for aircraft and helicopters.
The only observation I have to make now is that there is a difference between underwear and these items.


George Harris Hees: I am glad that the hon. member has made one sensible observation this evening. I agree with his last statement. With regard to the items he mentioned, helicopters and so on, these are all classed for civilian use and that is why they have been permitted to be exported.


Lester Bowles Pearson: The minister then gives us the assurance that there is no commitment to NATO, no commitment under any NATO-COCOM list of any kind, the details of which-I am not quarrelling about this-we do not know, which would prevent the export of aircraft and helicopters and the other items which my hon. friend has mentioned to communist countries.


George Harris Hees: I have said that we are talking about exports to Cuba and we have not exported anything to Cuba on the strategic list.


Mr. Maiheson:: Mr. Chairman, I should like to make a few remarks on this resolution having to do with the amendment of the Export Credits Insurance Act. Everyone on this side of the house is genuinely concerned about anything that is going to improve the trading position of Canada. The problem of export business is vitally important. We are interested in anything that assists those who go down to the sea in ships and do business in great waters. These export industries affect Canadians to a great extent.
In the Economist of November 4, 1961, the editor directed himself to the problem facing Britain in the matter of improving export financing. The editor writes as follows:
There has been a distinct change in the past year or so in the British government's reactions to the ever present complaints from exporters that they are being handicapped in world markets by inferior credit facilities.

He points out that Britain has a clear interest in avoiding an export credit race. We on this side, sir, are genuinely concerned about the real picture of trade.
I have examined an article written by E. C. Gould, financial editor of the Monetary Times, in the issue of January, 1962, entitled, "A Look at the Shape of Things to Come". He says:
Most of us have experienced inflation for so long that we are becoming immune to its sinister meaning. One aspect of a false security has been shown by impressive Canadian statistical records with indications of a promising future in terms of fluctuating dollar values.
The learned editor prepares for us two tables which, with the leave of the Chair, I should like to file. Table 1 shows the gross national product Canada in fluctuating dollars for the years 1957 to 1961. In table 2, he shows the gross national product of Canada in constant 1957 dollars. He says that no matter how fast an economy may appear to be advancing in terms of fluctuating dollars, for us there is nothing to be gained by this situation when costs have overtaken profits in terms of real work.


The Deputy Chairman:: Order; I wonder if the hon. gentleman would tell the committee how long these documents are before we seek the consent of the committee to have them included in Hansard?


Neil Alexander Matheson: They are very short, Mr. Chairman. I would ask leave of the committee to file them.


Gordon Campbell Chown: Will the committee give unanimous consent to the inclusion of these tables in Hansard at this point?


Some hon. Members:: Agreed.


Some hon. Members:: No, no.


Gordon Campbell Chown: There does not appear to be unanimous consent.


Lester Bowles Pearson: Read them.


Neil Alexander Matheson: The tables are as follows:



TABLE 1

[Stage Direction]
The Gross National Product Canada
(In fluctuating dollar values)
Year	G.N.P.
1957	
31,443	million1958	
32,606	million1959	
34,857	million1960	
35,959	million1961	(estimated)	
35,725	million

[Stage Direction]
The Gross National Product Canada
(In constant 1957 dollars)
Year	G.N.P.
1957	
31,443	million1958	
32,110	million1959	
33,211	million1960	
33,807	million1961	(estimated)	
33,620	million
An entirely different result has been indicated by a study of the same statistics in conjunction with the second table which I have just read to this committee. Studies of real dollar value related to the gross national product have been employed to show a period of drift, with our national economy almost at a standstill.
Mr. Bell (Carlelon):: May I raise a point of order, Mr. Chairman? I know the hon. gentleman is one of the more junior members of the house and I hesitate to intervene, but surely what he is now discussing has nothing whatever to do with the resolution under consideration. He is dealing with matters generally in relation to trade, and dealing with them in the way in which the house has become accustomed to the hon. gentleman dealing with issues-but certainly not dealing with the Export Credits Insurance Act, which is the subject before the committee.


George James McIlraith: If I may speak to the point of order-


Mr. Matheson:: My point is to discuss the question of export credits insurance-


Gordon Campbell Chown: Order; does the hon. member for Ottawa West wish to speak to the point of order?


George James McIlraith: If Your Honour will hear me before making a ruling on the point of order raised, I would point out that the resolution reads:
That it is expedient to introduce a measure to amend the Export Credits Insurance Act to increase the maximum liability at any time of importers under outstanding instruments the payment of which is guaranteed by the corporation under section 21A of the act, from $200 million to $300 million; and to provide further for a certain change in connection with the administration of the act.
This raises the whole question of this act which is designed specifically-


Some hon. Members:: No, no.


Mr. Bell (Carleton):: This act, but not the
whole subject of trade.


George James McIlraith: As I was saying, it raises the whole question of the administration of this act, which is an act designed to assist directly our export trade, one of the biggest factors in contributing to the health of our economy, to the gross national product and to the development of the economy at a given time. It therefore appears to me, Mr. Chairman, that the arguments of the hon. member for Leeds are directly relevant to the resolution before the Chair.


George Harris Hees: I submit that a recitation of figures relating to the gross national product,
Export Credits Insurance Act year after year, has nothing to do with the act that we have before us for consideration.


John Whitney Pickersgill: If I may say a word on the point of order that was raised by the hon. member for Carleton-it is probably going to take more time than the hon. member for Leeds would have taken-I would say that when we are asked to put up another $100 million for insurance and export credits, it is relevant to know whether we are doing this for expanding trade or contracting trade. You cannot make an intelligent judgment as to whether another $100 million-


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: I know hon. gentlemen on the other side of the house regard $100 million as very insignificant after the billions of dollars they have added to the expenditures, but we do not. Before we are asked to pledge another $100 million of the taxpayers' resources, we should know whether our trade is expanding or whether it is contracting. As I listened to the hon. gentleman very carefully, I thought that was the precise point which the hon. member for Leeds was seeking to make. It seems to me we could not have an intelligent discussion of this subject at all without discussing that point.


Gordon Campbell Chown: The resolution, by its wording, is quite wide in my opinion, and I fully intend listening very carefully to the hon. member for Leeds. If I feel there is a difference between his remarks and what the Chair considers relevant, I will rise myself to a point of order.


John Ross Matheson: Thank you, Mr. Chairman. I will certainly direct my remarks precisely to this important problem of export financing because we certainly need it. Canada is far down on the list of nations for increased exports of manufactured goods in the first nine months of 1961. I quote for reference from the Toronto Globe and Mail of January 16, 1962, which shows a table indicating the proper position of Canada. As the chart shows, major gains were achieved by Italy, West Germany and Sweden, Canada is very far behind in this list.
Now, if we look through the press carefully we find that there are some very disturbing things about our trade position. The Toronto Globe and Mail of January 30, 1962 has this headline, "A Little Reflection on Export Totals Dulls Shine". The editor, Fraser Robertson, says:
It is too soon for Canadians to congratulate themselves on the course of foreign trade. Take the wheat out of the statistics and not very much improvement is shown in general export trade-
-a part of the higher export values is attributable to inflation through a falling exchange
914	HOUSE OF
Export Credits Insurance Act rate,. .. inflationary gains in the national accounts do not represent real gains in either production or employment.
The other day I asked a question regarding Canada's exports to communist countries. It was starred question No. 137 and we see in the answer, set out in Hansard on February 12, 1962, that there was a spectacular improvement with respect to Cuba, a jump up to $24,750,137, almost $25 million. Then we have the answer with respect to other communist countries, showing a great big jump in regard to communist China from $8,737,363 to $114,916,725, and that is only up to October 31, 1961.
Is it any wonder that we find the Vancouver Sun lor December 19, 1961, saying "Canadian Wheat buys China Army."? The article contains the following:
Communist China is buying its army's loyalty with Canadian wheat.
Now, we are happy to see this Canadian wheat being sold but we want to see that these are proper sales. This is the place right here, and now is the time for us to be told about the circumstances and the facts. According to the article in the Vancouver Sun, Shu-Kai Chow, chairman of Formosa's commission on overseas affairs said:
The wheat is also being used as a political weapon in China's international politics . . . "They are selling Canadian wheat to Albania while Chinese starve."
This is merely strengthening communist China's hand in its imperialist ambitions.
The Calgary Herald, on October 6, 1961- and I might recall the editor, Basil Dean, was very friendly to this government-said:
The Canadian government has agreed to allow red China credit of up to $100 million for the purchase of our grain .. . The deal becomes even more intriguing amid the many reports that Red China is in poor financial shape and may have difficulty paying its debts.
Therefore we are concerned about the insurance circumstances of these deals. We are interested to know if it is the wheat board which takes the risk.


Grant Campbell: Will the hon. member permit a question? Have the editors of these various papers agreed to the plagiarization of these papers to this extent?


John Ross Matheson: I might say to those who are interrupting me that we are trying to put forward fearless, constructive arguments to the government and we are not assisted by the great army of experts available to the government. We know they are doing the best thing they can do, if their assistance is called for, but we do not have that kind of advice. Evidently this administration does not appreciate the fact that a great number


of people come to its assistance, while we look to the press for assistance and guidance on the things we do. Let us look at the Montreal Gazette for September 26, 1961, which states:
Sales to communists sustain export trade ... As a result of the U.S. trade embargo, Canadian exports to Cuba rose from $4.1 million to $12.4 million-
-and that was referring to the first five months of 1961, We want the facts provided for the anadian people. We believe in bilateral and multilateral trade. By multilateral trade we are making it possible-


An hon. Member:: What is he talking
about?


John Ross Matheson: I shall be pleased to answer any questions.


Gordon Campbell Chown: Order. While I am on my feet to ask hon. members to refrain from a multiplicity of interjections that come from several mouths at the same time, and therefore prevent the Chair from hearing what the hon. gentleman is saying, I want also to caution the hon. member for Leeds from wandering too far off the narrow track of the resolution which deals primarily with the insurance of exports and does not infringe, to the extent that he has, on the subject of trade in general.


Mr. Henderson:: You did not miss anything.


John Ross Matheson: Thank you, Mr. Chairman. One of the people who seems to have given a thorough study to this type of problem is Ludwig Erhard, vice chairman and minister of economic affairs of the Federal German Republic. This is a man who over a period of a good number of years studied the errors of Germany under the Hitler administration. I trust his talents and his training were no less than those of some experts whose names have been referred to in this debate in interjections across the house. German unemployment is low. Workers' real wages have advanced 60 per cent since 1950. Erhard's philosophy is contained in this statement:
The most successful means for the achievement and retention of prosperity is competition. Only by competition can an economy expand to serve all people especially in their capacity as consumers and dissolve all advantages that do not result directly from higher performance.
That is what he writes in his important book "Prosperity through Competition".
At different times the editor of the Economist has stressed these facts, that what we need most in export financing, is first to have available adequate finance, and second, interest rates which are realistic and will assist in the development. According to the stand taken by him, and this

Small Businesses Loans Act
appears in a great number of articles, interest rates have an important bearing. Of course, he is referring to the London market.
Ludwig Erhard enjoins against anything that would be a technique, a device, a trick or a gimmick to place his nation in a position different from those others working together in the development of trade and I hope the minister, when he explains further what has taken place with respect to this bill, will tell us what he has in mind that requires more money. We are happy to see $100 million extended, if it is actually going to assist export finance. We all recognize that the best help for exports is to keep price levels steady, but the use of questionable methods, questionable techniques and deals with reference to exports can do a great deal to injure Canada at a time when she certainly has not adjusted herself thoroughly to international changes and developments in other countries.
I am not going to wander off-


Mr. Slogan:: It is about time you wandered back again.


John Ross Matheson: We have not faced up at all to our trade problems. This $100 million is a very small amount of money in the over-all picture but we do not know any of the circumstances surrounding the need for this amount. Now is the time to tell us about the sale to communist China. We ought to get the answer. The Canadian people ought to get the answer.


An hon. Member:: Are you opposed to the sale?


John Ross Matheson: We would like to know something about the sale. We have been trying for two weeks to find out something about the sale.


Mr. Creaghan:: Mr. Chairman, a decision was taken in this house on that issue and that means we cannot talk about it time and time again.


William Moore Benidickson: You do not get $100 million from this parliament without a little talk.
Resolution reported and concurred in.
Mr. Hees thereupon moved for leave to introduce Bill No. C-68, to amend the Export Credits Insurance Act.
Motion agreed to and bill read the first time.


Gordon Campbell Chown: When shall the bill be read a second time?


John Whitney Pickersgill: Next sitting.


The Acting Speaker (Mr. Chown):: I believe the Minister of Trade and Commerce had some documents he wished to table. While I am in the Speaker's chair, perhaps he could have leave to do that. It is agreed that these documents may be tabled?


Some hon. Members:: Agreed.



SMALL BUSINESSES LOANS ACT


Donald Methuen Fleming: the second reading of Bill No. C-49 to amend the Small Business Loans Act.
He said: The proposed amendment to the Small Businesses Loans Act will serve to broaden the terms of this legislation. Briefly, it is intended to add to the purposes for which guaranteed loans may now be made. In effect, the amendment makes provision for dealing with credit requirements of small enterprises for the purpose of relocating business premises.
Hon. members will recall that this legislation was introduced about a year ago to fill a gap in existing credit facilities. At that time, there was general agreement that proprietors of small businesses experienced difficulties in obtaining funds on suitable terms and conditions to finance capital improvements. The act was designed to alleviate this situation by providing that each bank be guaranteed against loss up to 10 per cent of the business improvement loans made by it. Such loans are now available for the purchase and improvement of equipment as well as the expansion and renovation of business premises. The maximum amount which may be borrowed by a small businessman is $25,000 and the maximum period of repayment runs for 10 years.
It gives me great pleasure and satisfaction to inform the house that notwithstanding the relatively short period during which the legislation has been in operation, the merits of this loan scheme have been clearly demonstrated. There is, in fact, tangible evidence of the sizeable assistance obtained by small business enterprises in all the provinces. I should like to say that the banks in carrying out the task of administering the scheme have acted in an effective and co-operative manner and deserve a large share of the credit for the results achieved to date.
From the inception of the act in January 1961 to the end of last December, 2,977 loans amounting to over $25.5 million were made to small business enterprises. Out of total loan disbursements, service businesses accounted for about one half, retail establishments for

Small Businesses Loans Act about one quarter, manufacturers for about one fifth and the remainder of the loans went to wholesalers. The average size of individual loans was around $8,600. To conclude this review, I should point out that during the period from April to the end of December when the initial difficulties of operating the loan scheme had been overcome, lending took place at an annual rate of about $32 million. There is every reason to expect that this level will rise substantially as more and more small businessmen become familiar with the facilities provided under the act.
Of course, developments in the field of business improvement loans were kept under constant review by the government. Although progress under the legislation has been gratifying, the experience gained from operations during the past year indicates that there is one area where a broadening of the terms of the legislation would provide a useful additional measure of assistance to small business. Specifically, the act in its present form does not provide authority to finance the acquisition of business premises at an alternative location and this has led to some disappointment among potential borrowers, for example, in cases where relocation is forced on a proprietor because zoning regulations do not permit him to expand his existing premises. Accordingly, it is intended to make business improvement loans available for the purpose of financing the construction or the purchase of premises at an alternative site. In detail, proprietors of small business enterprises will be eligible for relocation loans not only in those instances where the premises at the present site cease to be available, but also in cases where relocation makes sense as a sound business proposition.
In introducing the small businesses loans legislation at the last session of parliament, I referred to the important role played by small business within the framework of the Canadian economy and I expressed the hope that the act would be instrumental in furthering the efficiency and competitive strength of small business enterprises. As indicated, there is every reason to believe that the new credit facilities can make a significant contribution towards achieving this objective. No doubt, the proposed amendment will prove useful in rounding out the assistance available to small business and will help to ensure the sound development of this important sector of the Canadian economy.


William Moore Benidickson: It is always difficult to follow the Minister of Finance (Mr. Fleming); he uses flowing words with very little substance. I think I can indicate this to the house by saying that all members will recognize that this bill was not preceded by any resolution. If


there had been a resolution, it would have meant that some financial commitment on the part of the crown was involved.
The original bill was, of course, grandiose. It enabled the crown to make guarantees to the banks in respect of loans to small businesses which, in aggregate, would involve $300 million. What has been the result in one year, a year during which business has needed all the support it can get? The result has been, according to the Financial Post report of January 27, 1962, that instead of $300 million the loans have amounted to about $27 million.
The Minister of Trade and Commerce (Mr. Hees) who always goes across the country as a great optimist, hailed the introduction of this act. Here is a headline from the Toronto Telegram which reads: "Hees hails the new loans as $300 million pool to aid small business".


Some hon. Members:: Hear, hear.


William Moore Benidickson: We have now had this measure in operation for a year and instead of $300 million flowing into the economy of this country the loans amount to the dismal sum of $23 million, as all hon. members who have read Hansard must know. The reason for this is that the bill itself when it was introduced originally was not adequate for its purpose. After the speech from the throne was read by the business community of this country, as represented by the Financial Post, they surmised that the Minister of Finance and those associated with him had realized after a year's experience of this legislation that it was not adequate. That business community thought the government intended to do something about it. They thought that if the government were amending this act in the first year after its introduction there would be at least three important changes- not merely one change of very little significance. Certainly it is of little significance if there is any thought of having an election in the next few weeks. What they had in mind was an easing of the limitation to which the minister referred, namely, the limitations setting the maximum amount of the loan at $25,000. After taking note of the publicity given in the speech from the throne, the Financial Post stated on January 27, 1962:
Surely, we shall have a doubling of the maximum amount of the loan from $25,000-[DOT]


Grant Campbell: On a point of order. Must we be exposed to this consistent plagiarization of papers?


Gordon Campbell Chown: Order.


William Moore Benidickson: This very reputable financial journal having heard from the governor general the words which were put into his

mouth by the Prime Minister (Mr. Diefen-baker) thought that under this legislation the business community was entitled to expect something of consequence.
Let me make this point. Do we get in this amending bill recommended by the Minister of Finance a suggestion that we should have a maximum loan of $50,000 rather than $25,000? No. Do we have here any suggestion that we would change the amount, which at the moment is $250,000, of the maximum income for a business that might be entitled to apply to a bank for a loan under this legislation?
The Financial Post thought that this government would see fit to bring in legislation that would increase the maximum to $750,000, three times what the present legislation provides. In some detail they pointed out that in December of 1960 the opposition co-operated by approving with alacrity all those measures introduced by the government which would tend to provide employment to the Canadian people. This is one of those items which received unanimous approval early in December.
During the recess while visiting my constituency I had a personal experience-


An hon. Member:: It must have been devastating.


Mr. Drysdale:: Please do tell us about it.


William Moore Benidickson: I met several business people who wanted to know what their opportunities were to borrow from the banks. These people had read the speech from the throne of November 1960 and were aware of the alacrity with which the opposition had co-operated in assisting the government in approving legislation that would assist in alleviating unemployment and stimulating the economy.


The Acting Speaker (Mr. Chown):: Order. I think it is unfair to the hon. member who has the floor for those hon. gentlemen who are in very close proximity to be making interjections that are disturbing to his continuity of thought. I would ask those hon. members who are making such interjections to withhold them until such time as they can take the floor themselves and make whatever contribution they wish to the debate.


William Moore Benidickson: Mr. Speaker, I was reminding the house that in November of 1960 the government introduced a bill relating to credit for small business. That was one of the measures advanced by the government that might stimulate business and assist to correct the chronic unemployment situation that then existed. At that time the opposition fully co-operated and with the greatest speed
Small Businesses Loans Act passed the legislative recommendations brought forward by the government.
Four weeks after the House of Commons had done its job it became apparent that the cabinet had not done its homework. Hon. gentlemen who make up the cabinet did not have ready the regulations under which the commercial banks of this country could extend credit until January 19, 1961. This is what happened despite the fact that in the election campaign of 1957 the great messiah of the Conservative party was stating publicly that we must make available for small business lending opportunities similar to those available in the United States. Speaking in Brockville in May of 1957 the present Prime Minister referred to 35,000 small manufacturing concerns across this country which were not receiving the credit facilities to which they were entitled.
As reported in the Ottawa Citizen of May 9, 1957 the hon. gentleman increased that figure. He referred, according to the press, to 37,400 manufacturing establishments in Canada employing 99 persons or less that should be entitled to better credit opportunities.
That was the position taken by the Prime Minister in 1957. The Conservative government did not introduce this legislation until November 1960. I say that the executive of the country had not done their homework. They had not even thought out this matter in advance. Although parliament unanimously approved the legislation early in December the regulations under which the improvements would be made available to the commercial banks were not introduced until January 19.
The results have been dismal. Contrary to the impression created by headlines such as those which indicate "Hees Hails New Loans of $300 million", I invite the attention of hon. members to a return prepared for the hon. member for Ottawa West (Mr. Mcllraith) which appears at page 525 of Hansard of February 5, 1962 indicating that since the introduction of this legislation only $23 million has been loaned under its terms.
I ask the Minister of Finance whether he has given consideration to the criticisms we hear of this legislation. What about the maximum of $25,000 which the Financial Post, in the light of the speech from the throne, optimistically assumed would be increased to $50,000? No such provision appears in the bill that is before us.
There is no broadening of the definitions except for the purpose of permitting a business improvement loan to be made for construction on an alternative site. That is all that is in this bill. Hon. members know that if there was anything of consequence involving increased expenditures on the part of

Small Businesses Loans Act
this administration under this legislation this bill would have been preceded by a resolution. Instead of that we are confronted with minor amendments redefining a certain entitlement affecting very few people under this grandiose scheme of $300 million which, as I have pointed out, over the course of 13 months has involved loans to the small business community of only $23 million.


Donald Methuen Fleming: Is the hon. member aware that the figures he is using are wrong?


John Whitney Pickersgill: You mean the figures you placed on Hansard?


William Moore Benidickson: I am referring to a return that appears at page 525 of Hansard of February 5, 1962, the last report this government gave to members of the House of Commons.


Donald Methuen Fleming: The hon. member referred to 13 months.


William Moore Benidickson: Yes. Parliament passed this legislation early in December of 1960 following the speech from the throne of November of that year. The government received the fullest co-operation from the opposition in enacting every legislative item in that package of measures designed to improve the economy and alleviate the unemployment situation. As I have said, the regulations which required cabinet study and activity were not available over the Christmas period and the commercial banks could not take advantage of them until mid-January of 1961.
In 1957, as I pointed out, the Prime Minister indicated that approximately 37,000 small businesses across Canada would receive assistance under legislation of this kind. He said he was enamoured of similar legislation operating in the United States. The present measure falls far short of what was urged upon the Canadian people by the Prime Minister in 1957, and even four years later we observe that not much progress has been made. One headline to which I referred mentioned $300 million being made available, but just a week ago in this house the minister reported that only $23 million have been made available under this legislation through the commercial banks of this country.


Herbert Wilfred Herridge: I rise, Mr. Speaker, for the purpose of saying a few brief words on this bill. First of all, let me say that this group supports the principle and purpose of the bill because it believes in promoting legitimate and socially desirable free enterprise.


Some hon. Members:: Oh, oh.


Herbert Wilfred Herridge: I notice the applause from the government benches, Mr. Speaker. I also wish them to note the qualification of my statement.


An hon. Member:: It is a step forward.


Herbert Wilfred Herridge: The bill has been in operation only a short time. However, from my own experience, in talking to certain persons in my own constituency, may I say that I think it has been of some benefit. I think there is some justification for the criticisms made by the hon. member for Kenora-Rainy River, (Mr. Benidickson) namely that the act is not quite as imaginative and good as it might be. In view of the experience of the operation of the act I suggest that the minister consider bringing in some further amendments to widen its application and to make it even more useful.
I am very much interested in this measure. It has been brought to my attention that it has been of some value to small industry in my district and to small businessmen and merchants, and that in some cases persons wishing to provide services on a small scale in small communities found this act beneficial in getting started. I refer to the solid type of citizen who has property, character and ability but has not the required money. Under these circumstances I think this act has been of some benefit.
I notice that it has been of benefit to the tourist industry in my constituency in getting funds from the banks for the erection of fishing camps and tourist cabins and for the improvement of facilities connected with resorts and so on. I have had one or two cases of those engaged in fur farming having taken advantage of this act. To my knowledge there is one case of a man who has undertaken a small boat building industry, just a one-man or two-man show, and who has taken advantage of the act. I am very keen on this matter of promoting the small scale industry and the small scale business in the local community, inasmuch as the society in which we are living at the present time is actually destroying free enterprise of all kinds, with the large scale development of monopoly capitalism.
I notice that the hon. member for Greenwood (Mr. Macdonnell) is listening very carefully and that up to a certain point he seemed to agree with me. However, I do not think he altogether agrees with my analysis of what is happening in modern society. Nevertheless, I feel very keenly about that matter.
When the minister speaks, I wish to ask him whether he thinks this act will also apply to trappers. We have some trapping industries operating quite extensively in the constituency in which I live. We have good trappers who are licensed to operate in the district. Some of them have trap lines which

are 50 miles long and they get from $3,000 to $10,000 worth of furs in a winter. But sometimes a young man commencing wishes to get a set of traps and to build a line. When the minister replies I should like him to tell the house whether this legislation would apply to such a person wishing to engage in the trapping business; I refer to a small business.
While the act has been in operation for only a short time the experience with it has proved the necessity for this amendment. We have noticed the same thing with a good number of pieces of legislation that have been brought before the house. It is something that is normal and I am always pleased to see it. I am glad to see governments amend acts as a result of the experience in their operations.
I might say that one thing which has been brought to my attention on several occasions during the last year, particularly by persons engaged in the tourist business or summer resort business is that they could not take advantage of the act because they wanted to relocate cabins, certain facilities or things of that sort. I understand that this amendment would make it possible for these people to relocate on more suitable sites, to develop other sites and so on. Strangely enough, only this morning I received a very lengthy letter from a businessman who was engaged in the tourist industry. He has a rather large summer resort and wants to relocate the summer resort because of changing circumstances that have developed in the last 25 or 30 years. As the act stood, he was not able to get a loan from the bank manager. As a result of this amendment I trust that his application for a loan will be placed in much better circumstances.
With those few remarks, Mr. Speaker, I take my seat. Once again may I say that I trust the minister watches the operation of this act and asks for criticisms of the bill, and for suggestions even from those engaged in this type of business and industry.
There is one other feature I had forgotten to mention. I think more information should be given to the public as to this act. I know the banks have a little folder and things of that sort. Something should be done to publicize the act and to bring its advantage to the attention of persons who would not be served under normal credit procedures.


Mr. A. D. Hales (Wellington South):: should like to add just a few words to what has already been said, Mr. Speaker. First of all, I should like to compliment our Minister of Finance (Mr. Fleming) on bringing in the amendment to this bill. The hon. member for Kenora-Rainy River (Mr. Beni-dickson) mentioned how little the loan has been used. However, I should like to remind
Small Businesses Loans Act him that there are in Canada approximately
3,000	small business operations which have been able to make use of this bill and which would never have been able to make use of it under a Liberal government. They did not have such an act. They would not lend money to the small businessman because they were not interested in the small businessman.


An hon. Member:: They did not care about him.


Alfred Dryden Hales: I should also like to compliment the hon. member for Kootenay West (Mr. Herridge). I think he was preaching for a call to join our ranks when he was speaking about free enterprise. May I say that we should be happy to have him come over and join us on that basis.


An hon. Member:: All good Tories.


Alfred Dryden Hales: This amendment will make loans available to many merchants and small businessmen who have found themselves in a position where they wanted to enlarge their operations but who, owing to zoning restrictions, were unable to do so, or where there are difficulties in connection with parking problems and they find it necessary to move their operations to some other locality where they will be free of those parking problems. This amendment will be very helpful to such operators. I feel as did my friend the hon. member for Kootenay West, that as this bill is used- and 1 am sure it will be used extensively; after all it has only been in operation for a few months-recommendations will be received by the minister. I think one recommendation would be that the classification of gross sales of $250,000 per year should be enlarged so that it would take in larger businesses. I would hope that the minister will study these recommendations and amend the bill when necessary. 1 have encountered a few cases where there seemed to be a little too much red tape to go through in order to get a loan, but all in all the legislation has been of great assistance to the small operators in Canada, the small businessmen in whom this party has been interested, and I am very happy to see this amendment being made in the act at this time.
(Translation):


Mr. Guy Rouleau (Dollard):: Mr. Speaker, it took the Minister of Finance (Mr. Fleming) a year to realize that the members of the opposition were right, in November 1960, when the bill on loans to small businesses was submitted and when we claimed that such legislation would not give enough assistance to small businessmen.

Small Businesses Loans Act
The amendment to the Small Businesses Loans Act submitted tonight was suggested during the debate on the bill in November
1960,	but as usual, the minister ignored that suggestion like all the others that are made by opposition members.
When that piece of legislation was introduced,	it	was heartily welcomed	by	allmembers	of	this house. But as for	us,	onthis side,	we	asked for a broadening	of	theact. We also	made some suggestions	with a
view to giving further assistance to small businessmen.
The minister in his majesty ignored all the suggestions made. He uttered high-sounding sentences, as he is wont to, wishing to give the impression that he could save the small enterprise from disaster.
He predicted, as recorded in Hansard of November 21, 1960, that the owners of small enterprises would rush to the banks to borrow. Indeed, he forecast that, during the winter months following the adoption of the act loans would amount to $75 million. That amount would not only help small business enterprises, but check unemployment.
The minister was so enthusiastic about what he believed was his masterpiece that he had even fixed at $300 million the total amount of loans that the banks would grant and which would be guaranteed by the government.
Now, Mr. Speaker, what has been the actual result of that legislation? On November 30,
1961,	after the act had been in force for a year, out of a potential of some 400,000 small enterprises, as defined by the act, only 2,737 loans had been granted by the banks, for a total amount of $23 million.
In view of the needs of small business and the insignificant number of loans granted, as well as the ridiculous amount of those loans as compared to the minister's forecast there is ground for some questioning. The minister would be well advised to think seriously and say to himself that he would have been wise to show some humility, for once, and admit that he should have followed certain suggestions made to him by members of the opposition when he introduced his bill on November 21, 1960.
If the results have been disappointing, both for the government and for the small business enterprises, it is because the act was neither satisfactory nor adequate.
First of all, the act does nothing more than guarantee bank loans to the extent of 10 per cent. Therefore, of the $23 million granted in loans as of November 30, 1961,


under the act, the government actually guaranteed only an amount of $2.3 million to the banks.
Under the circumstances, the banks, which are not charitable institutions by nature, continued as before to follow practically the same policy towards the small businessmen who applied for loans.
Besides, is it not the powerful Associate Minister of National Defence (Mr. Sevigny) who stated, not before architects this time, but in this house on November 22, 1960, as reported on page 1 of the appendix of Hansard of that date:
It must be realized that in some cases, banks have been forced, quite against their will, to turn down applications from people who were seeking funds to expand their businesses.
Well, according to the number and amount of bank loans made under the act, banks have kept on turning down applications in a proportion of 90 per cent since, under the act, loans are guaranteed only on the basis of 10 per cent.
Mr. Speaker, the bill under consideration is a slight improvement. It has taken the minister over a year to introduce it. At that rate, small businessmen will have the time to disappear from the economic scene before we have legislation broad enough to be truly useful to them.
All hon. members will agree that small enterprises are of vital importance to our economy. Under such circumstances, it is the duty of the government to look after the problems of the wholesaler, the small manufacturer, the contractor, the provider of services, the retailer and so on.
The very existence and the survival of the small business enterprise in Canada is a vital element in our free society. Without the small business enterprise, we would have less free enterprise and more state control.
It is generally recognized that, in the past few years, the small business enterprise has found it increasingly difficult to stay alive.
The main difficulties of the small businessman, of the small merchant, of the small manufacturer, have been the lack of capital, the difficulty encountered in obtaining credit at a reasonable rate, the lack of research facilities and unfair competition, such as restrictions imposed by big business.
It is of the utmost necessity that the government take the required steps to abolish these obstacles which stand in the way of the small enterprise, and that it take them immediately. Otherwise, people will say the same thing Mr. Andre Laurendeau said about

another measure announced in the house, a few days ago, by the Minister of Finance: "Too little and too late."
Of course, all groups in this house were pleased with the introduction of the bill on small business loans, all hon. members supported that measure and voted for it. But it must be recalled that the members of the opposition claimed that to be really effective and to achieve its aims, the act should be extended.
This amendment to the act which is before us meets a suggestion made by the opposition on the introduction of the bill. Its purpose is to permit a business improvement loan for the construction or purchase of alternative premises where the premises in which the enterprise was or is being carried on are no longer available or will cease to be available for that purpose.
It is a welcome improvement, but it is not
enough.
Whatever the Associate Minister of National Defence may think, bankers will continue to turn down requests from small business owners, as they have been doing, since they only have a 10 per cent guarantee.
And the minister, with child-like hope, is just as satisfied with the poor results obtained as with the collapsing of his nice forecast.
Instead of introducing that amendment only, the minister should have also amended the law in order to enable small businessmen to obtain working capital. Instead of leaving the owners with only one alternative, that of borrowing and running into debt, which may be necessary when one is in business, the government should adopt the same graduated scale of income tax for small businesses as for individuals. Thus, the small businessman would be relieved of a burden which would leave him more money available for his business.
The legislation should also place areas where unemployment is prevalent in a special category. In those communities, special attention should be given to the businessmen who want to start a small business. Easier credit should be made available to them. This would provide a way of relieving unemployment in the smaller communities and to check its growth in the cities, for the unemployed would not be tempted to leave the smaller communities for the big cities.
Mr. Speaker, these are a few comments I wanted to submit on this question which is so important for our economy: assistance to small businesses.
For the time being, I support the amendment which is brought forward, but I regret that the government does not go further. The
Small Businesses Loans Act country will need a Liberal government so that the small enterprise may be treated in all fairness.


Mr. Pigeon:: Twenty two years of inaction. (Text):


Mr. G. H. Aiken (Parry Sound-Muskoka):: It has been an amazing experience to sit here and listen to the comments which have been made about this measure by members of the official opposition. For many years they sat back and offered no assistance to the small business people, and now we have introduced a new type of loan under a new act.


Guy Rouleau: The country was prosperous then.


Gordon Harvey Aiken: Then, tonight we hear them say that the government is not doing enough. We have heard this argument for quite a few days, and I do not want to go into it fully. However, good measures have been introduced by this government, including the Small Businesses Loans Act and the inclusion of members of the merchant navy, the forestry units and so forth in the war veterans charter. These are things that the Liberal government refused to do for years and years. Now, when this government introduces these measures, members of the opposition can only stand up and say, you are not doing enough; you are not doing the right thing; you should do more; you are not going about it in the right way. I feel that is not constructive criticism. I would say that the argument, too little and too late, is nothing more than sour grapes. This measure has been successful and if opposition members want to make the necessary inquiries they will find that is the case.
There was some difficulty in the administration of this measure at first, Mr. Speaker, and no one will deny it. The bankers in the local branches did not understand how they were to go about making these loans. Naturally, they were diffident about embarking on a new procedure and a new set of forms. They would have preferred to make loans in the normal way. Likewise, a lot of the small businessmen did not understand exactly the purpose of this act. This was understandable. The purpose of the measure was to improve premises in order to make small businesses competitive with larger businesses. It was also aimed at promoting an increase in building.
It is fair to say that the figures which the minister has produced are for only half a year. I do not believe this act was properly operative until late in 1961. It was not until the middle of the year that the kinks were
922	HOUSE OF
Small Businesses Loans Act ironed out and both borrowers and banks understood what they could do in the way of loans. There was some disappointment, it is true. People who were in financial difficulty and who were looking for a loan to bail them out were disappointed. However, when the purpose of this measure was explained, that it was to improve premises in order to make the small businessman competitive with larger businesses, then the act began to work. It is working well.
As the hon. member for Wellington South (Mr. Hales) said, about 3,000 small business men in this country have applied for loans to improve their premises. They have derived a great deal of benefit from this act. They are people who otherwise would not have been able to obtain loans. Naturally, I would not want to take my seat without mentioning the tourist operators because they are the people in whom I have had the most interest. The tourist operators were in the same position as many of the small businessmen. They just could not obtain loans. In fact, they were in a worse position because the tourist business was classified as seasonal and hazardous.
As I understand it, about 268 tourist operators have made application for these loans and have improved their premises. They are hoping for a better year next year. If they are not successful in improving their business, it cannot be said the fault lies in a lack of credit facilities. I do believe that most of the tourist operators who have applied for loans have been satisfied and have tried to bring their business up to standard. There was the same difficulty in connection with tourist operators as was experienced in connection with other businessmen. They did not understand the purpose of the act. I saw some editorials to the effect that the act was not operating properly. However, within the last two or three months I have heard a number of people engaged in the tourist business speaking from public platforms who have said that this act is working, now that the operators understand what they can get out of it. They are very glad this measure was introduced.
There is just one other point I should like to make, Mr. Speaker. The hon. member for Kenora-Rainy River (Mr. Benidickson) mentioned the fact that many manufacturers did not qualify under this act. I feel it is fair to say that the major manufacturers are supposed to make their applications to the industrial development bank. The loans made available by this measure are for small businessmen. I think nearly 3,000 small businessmen in this country now know that the act is satisfactory, so I believe that 1962 will

be much better and that many more people will make application to improve their premises.


William Hector McMillan: Mr. Speaker, the amendment introduced in this bill gives comparatively limited help to a few businesses. However, I believe it should be supported. I think I can say that in my part of the country this measure will not meet the needs of many small businessmen. The government will have to do something in order to save some of these businessmen. The government talks about helping small businesses. They have talked a lot for years about helping small business, and we have heard some of that talk tonight. I should like to ask the government why business failures have been so high in our country since 1957.
I heard the last speaker mention the fact that our argument was, too little and too late. I say that the government's help to the small businessman is to little and too late. The number of business failures amongst small businessmen in 1960 was 2,828. For the first nine months of 1961, the latest available figures, failures numbered over 2,000. Each month that this government has been in power business failures have increased over the corresponding months of the previous year.


William Moore Benidickson: As many failures as loans under this act.


William Hector McMillan: From the Financial Post of September 1, 1961, we read that business failures in the second quarter of 1961 with liabilities leaped up by $27.7 million-


Gordon Harvey Aiken: On a point of order.


The Acting Speaker (Mr. Chown):: Is the
hon. member rising on a point of order?


Gordon Harvey Aiken: Yes, Mr. Speaker. During the debate which started this evening there was certainly some movement away from the narrow purposes of the act into a general discussion on the Small Businesses Loans Act. I do not think that if we depart slightly from the narrow purposes of the act that should not be permitted, but I do feel that a discussion on business failures, and so forth, in connection with the amendment that is before the house is going quite a piece away from the purposes and general intent of the Small Businesses Loans Act.


John Whitney Pickersgill: I should like to say on the
point of order raised by the hon. member for Parry Sound-Muskoka (Mr. Aiken), who himself extended the debate from the scope of the bill and spent most of his time criticizing the opposition and the previous administration, that if the hon. gentleman is to be permitted to go back into the history before

1957, then my hon. friend who is now talking about the actual conditions that this bill is supposed to be trying to remedy, is very much more in order. I know, sir, with your judicial approach you will give the same latitude to both sides.


Edmund Davie Fulton: Stop the buttering up, Jack.


The Acting Speaker (Mr. Chown):: The hon. member for Welland.


William Hector McMillan: I do not know whether the hon. gentleman opposite raised a point of order or not. I could not catch his words about the tourist industry, but I do know that my references to the number of business failures in Canada are more pertinent to the discussion on this bill than a discussion of the tourist industry. I was saying that in the second quarter of 1961 the number of business failures racked up liabilities of $27.7 million. That was 11 per cent over the same months in the same quarter of 1960. They reached an all time high in Canada. This government has set many bad records and this is another one to add to them. The actual business failures were 30 per cent more in that quarter of 1961 than in the corresponding quarter of 1960, namely, 545 failures as against 419 a year earlier.
The climb in business failures in 1961 did not taper off at the end of the second quarter. For instance, preliminary figures for the month of July-and those are all the figures we could get at this time-show that there were 160 casualties in Canada, with liabilities of $10.7 million against 127 casualties in 1960 with liabilities of $4.7 million. In 1961 the second quarter figures showed a numerical increase in most industrial groups.
The retail industry, for instance, was the hardest hit. The retailers in that industry, comprising furniture stores and house furnishing outlets, suffered the greatest loss. There were 269 retailers who went broke in the second quarter of 1961, 68 more than in the same quarter a year earlier. In the commercial service group in that same quarter, seven hotels failed in Canada with liabilities of nearly $700,000, as against two the previous year with liabilities of $171,000. Some 75 Canadian manufacturing firms failed, 59 more than in the same quarter a year earlier, and this was most noticeable in the textile, food and forest products industries.
According to the Financial Post the main reasons for these high figures were first, a general slow down in business, second, the high cost of borrowing, and third, the scarcity of mortgage money. Of course we know that a lot of this has been caused by the fiscal and monetary policy of the government. No amount that this government gives
Small Businesses Loans Act the small businessman can compensate him for the loss that the government's fiscal and monetary policy has caused him. It has increased his taxation at the three levels of government.


William Heward Grafftey: How do you figure that out?


William Moore Benidickson: High interest rates.


William Hector McMillan: Unless there is a change in policy we shall have more failures, although it is pretty hard to see how the government can get more failures. There have been so many already that there are not so many left to fail. The increase in failures is typical of-*


William Moore Benidickson: Tory governments.


William Hector McMillan: Yes, of Tory governments in this country. This is the type of growth they can show, an increase in the growth of failures in Canada. The small businessman is not like the Minister of Finance. When the small businessman gets into trouble and can get no more credit, he then goes broke. However, the Minister of Finance, when he can get no money from the Canadian people, prints more money and compounds the troubles of the Canadian people.


Gordon Harvey Aiken: You are using up your budget speech.


William Hector McMillan: I have said before, and I think it is true, that there is one thing which causes an upset in business in Canada, and that is the prospect of an election.


William Moore Benidickson: It should settle everything.


William Hector McMillan: I have often heard it said that business is not good during an election period. I heard a retailer not long ago say he was not going to buy in new stock until the election was out of the way. That, I think, keeps the country in suspense. It is causing distress to the country, in the same way that the Prime Minister did, when according to press reports he was threatening to fire the Minister of Finance, and he withheld the denial.


The Acting Speaker (Mr. Chown):: I find the hon. gentleman is now straying from the subject-


Donald Methuen Fleming: Now?


The Acting Speaker (Mr. Chown):: -under consideration so extensively that I have to call him to order on relevancy, and I would ask him to come back to the subject under discussion.


William Heward Grafftey: Let him table the speech.


William Hector McMillan: I shall say, Mr. Speaker, there has been a lot of interference here tonight, and a lot of interference with small businesses by this government as well.

Small Businesses Loans Act
The small business people in this country have suffered a lot in the last four years irrespective of how much hon. members opposite may laugh. I know small business people who are having great difficulty in surviving at the present time. If hon. members will read the Globe and Mail of today they will see that small businessmen in the west are having a harder time than the farmers in the west. That is true, also, of businessmen in eastern Canada.
I know a number of small businessmen who need loans at a much lower rate of interest than the Minister of Finance (Mr. Fleming) can afford to offer them. The amendment to this act helps only comparatively few businessmen. I feel the minister should increase the loans made to small business. I know small businessmen who cannot get money at any rate of interest. If the minister could increase the loans made it might tide them over the period of time until they have a more favourable government here in Ottawa which will help them.


Walter George Pitman: I am
sure the house will recall that a year ago last November we came into this parliament expecting legislation which would deal with the serious and alarming problem of unemployment.
One of the great bulwarks of this government's program at that time was this particular measure giving intermediate credit to small businessmen. It was heralded with tremendous fanfares and we were expected to believe that the bill was going to solve a great many of the problems facing this country. If hon. members will look back to the debate which took place at that time they will remember that the enthusiasm generated on the right of the Speaker's chair was something wonderful to behold. In fact, it is interesting to recall that the opposition was trying to get the bill through; we were fighting hard to get some legislation on the books to help deal with the unemployment situation in Canada. But speaker after speaker stood up to congratulate the government on this particular bill extending credit to small businessmen.


John Whitney Pickersgill: The Tory filibuster.


An hon. Member:: Two-flag Jack.


Walter George Pitman: It certainly was an interesting debate. Those of us who sit on the left of the Speaker's chair thought that when we got back to our constituencies the bankers would be busily handing out money to the small businessmen who were so desperately in need of credit at the end of December, 1960. I am not sure what experience other hon. members have of that Christmas recess, but certainly in my constituency the telephone kept

ringing. The line was busy with such inquiries as: when are we going to be able to get this credit? When will the bankers have the regulations? Even the bankers were telephoning to inquire when this scheme was going to get rolling. The number of inquiries received from one banker, at least, was greater before the regulations came out than it was after the regulations had been published. For this reason I think the suggestion of the hon. member for Parry Sound-Muskoka (Mr. Aiken) that the legislation had only been on the statute books for a few months and that this was the reason why only $27 million had been lent, was not an acceptable one. Hon. members may recall that, speaking in the debate on the address the Leader of the Opposition remarked that only two thirds of the egg was good. I might paraphrase that remark and say that only one tenth of this particular piece of legislation is any good.
I think we have to face it. This legislation is not really doing the job which it was expected would be done when the measure was brought in. Here again, in February of 1962, with over 500,000 people unemployed, we are looking-


Paul Joseph James Martin: Five hundred and forty three thousand.


Walter George Pitman: The hon. member for Essex East corrects me. The figure is 543,000. Once again we were looking to this legislation in the hope that it would be amended in such a way as to provide a significant amount of credit and capital to small businessmen so that there might be some real effect on the unemployment situation which we face in this country. What do we find? All we find is a very small, virtually insignificant change, despite what the minister has said, making it possible for people to borrow money to relocate their premises. Surely, that is not good enough. I think the criticism "too little and too late" could never be applied to any legislation more acceptably than to this legislation which is before us.
That, of course, is in the tradition of this government. We were told during the election campaign that this government's heart bled for the small businessman. A special branch was set up in the Department of Trade and Commerce to look after small businessmen, and the whole of $30,000 was allotted to that branch. What has happened to that branch since? Has there been any expansion? Has there been any significant amount of help given to small businessmen? Have they been expanding during the period of Conservative rule since 1957? I can scarcely believe that this is so. The hon. member for Welland (Mr. McMillan) has read enough dreary

figures to this house to suggest exactly what has happened with regard to this legislation. It is an extremely tragic situation, I am afraid.


An hon. Member:: Vote against the bill, then.


Walter George Pitman: May I call it ten o'clock?



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Before you leave the chair, Mr. Speaker, I might perhaps ask the leader of the house if he would indicate the business for tomorrow. Possibly, for the benefit of his friends and any other members who may want to leave during the week end, he could also give us an indication of what the house will be doing on Monday.


William Moore Benidickson: They might want to leave for a long time.


Gordon Minto Churchill: Some of the hon. members opposite will be leaving for a very long time very soon.


John Whitney Pickersgill: The minister is whistling in a graveyard.


An hon. Member:: A Conservative graveyard.


Donald Methuen Fleming: Some of the corpses are over there.
Business of the House


George Harris Hees: It is like looking at tombstones on the other side.


Gordon Minto Churchill: Tomorrow we shall take third reading of the bill pertaining to the children of the war dead. The second term will be the railway bill, reported back from the committee, dealing with the proposed railway line at Whitecourt, Alberta. That will be followed by the bill dealing with the proposed railway line at Chisel lake, Manitoba. Then we would deal with the amendment to the Export Credits Insurance Act, followed by the resolution concerning the universal copyright convention in the name of the Secretary of State; Bill No. C-67 dealing with the proposed railway in the Gaspe peninsula and, if the house has time for it, Bill No. C-38, dealing with financial and other statistics.


John Whitney Pickersgill: We are not going to continue with the bill we have been on tonight, then?


Donald Methuen Fleming: No; you talked it out tonight.


John Whitney Pickersgill: I just wanted to know. I could not care less.


[Stage Direction]
It being two minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
-59
[Stage Direction]

Friday, February 16, 1962