1962-03-05

Hon. J. W. Pickersgill (Bonavisla-Twillingate):: Mr. Speaker, I would like to say a word on a question of privilege. This is the first time I have been in the house since the Minister of Veterans Affairs drew attention to some words of mine in Hansard. What seemed to offend the hon. gentleman was that quotation marks were put around those words. He seemed to be suggesting that I was responsible for putting the quotation marks there. I really do not know whether or not I did, sir-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -but one thing I do know is that if they are there, they should be there because that was a quotation, and the last thing I would wish to do would be to misappropriate those unforgettable words of the Prime Minister.


Mr. Diefenbaker:: Misinterpreted words.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: There was no interpretation at all; there were just the words.


John George Diefenbaker: No one will suffer.


John Whitney Pickersgill: No one will suffer except the Prime Minister.


EXTERNAL AFFAIRS
Mr. Speaker:: By leave of the house may I lay on the table in English and in French the agreed summary reports of the two committees which were approved at the final special session on Friday of the sixth meeting of the Canada-United States interparliamentary group.


Some hon. Members:: Agreed.


Mr. Speaker:: Last year the report of the committee to parliament was tabled, and it was then agreed that the report be published as an appendix to Hansard. These are not the final reports but rather the press reports
which came out of the meeting. If the house would like to have these documents printed-


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed that these reports be printed as an appendix to Hansard.
[Editor's note: For text of documents referred to above, see appendix.]



VETERANS AFFAIRS


Hon. Gordon Churchill (Minisier of Veterans Affairs):: Mr. Speaker, last Tuesday I reviewed briefly the background of the relationship between war veterans allowances and payments of old age security pension. I explained that the War Veterans Allowance Act has always been based on a means test, and that for the purpose of this means test old age security pension has been considered as income ever since the Old Age Security Act was approved by parliament. As a matter of fact, Mr. Speaker, I have been given by the departmental officials a copy of the notice which went out in 1952, which shows that at that time the amounts paid under the Old Age Security Act were to be computed as part of the income of recipients of war veterans allowance.


Hon. Paul Marlin (Essex East):: On a point of order, Mr. Speaker, what the hon. gentleman is doing now is something distinct from an announcement of government policy. I agree that this would be the appropriate time at which to make such an announcement, but the minister is now trying to justify something which he might well have said in the course of debate on another occasion. He is simply telling us now what has happened in the past, and what he is saying is debatable, contrary to the privilege open to a minister of the crown under the present circumstance.


Gordon Minto Churchill: This is an outrageous interference with a statement of government policy, and is typical of the Liberal party which denies freedom of speech to people in parliament.


Mr. Speaker:: In an announcement of policy it is appropriate to make factual statements. It would not be appropriate to present a case on a controversial matter, because that would make it impossible for comment to be limited

Veterans Affairs Allowances in the same way and would give rise to debate. I trust the minister will proceed with his statement in recognition of that custom and not introduce arguments on controversial matters.


Gordon Minto Churchill: I hope I shall have the privilege of continuing the statement of policy without interruption.


An hon. Member:: What is the policy?


Gordon Minto Churchill: In spite of this earlier practice, the government has given further consideration to this problem and has come to the conclusion that war veterans allowance recipients and their spouses who have reached the age of 70 years should receive an additional benefit from the latest adjustment in the old age security rate.
I am pleased to inform the house that following my recommendation the government has approved a policy of considering as exempt income, for the purposes of the War Veterans Allowance Act, $10 per month received by virtue of the Old Age Security Act by a recipient of war veterans allowances or his spouse, or $20 per month if both are in receipt of an old age security pension.
This amendment to the W.V.A. regulations will be effective February 1, 1962.


Hon. L. B. Pearson (Leader of the Opposition):: It is gratifying to learn from the minister that the position taken by the opposition in this matter and the arguments advanced in support of that position have had some effect and that, therefore, the government of the day has decided to change its policy in this matter.


Mr. H. W. Herridge (Kootenay West):: Members of this group are delighted with the effect they have had on government policy in this respect. This question was raised any number of times, on three occasions by the hon. member for Vancouver East and also, I say with all modesty, by the hon. member for Kootenay West. Now I want to ask a question.


Some hon. Members:: No questions.


Herbert Wilfred Herridge: Excuse me; we are a bit ahead of ourselves. We are delighted with this announcement, and will continue to work for veterans in this direction.

On the orders of the day:


Mr. D. M. Fisher (Port Arthur):: I would like to ask the Minister of Veterans Affairs, in view of the announcement he made earlier regarding the regulations being changed concerning the veterans whether he could tell us whether the same consideration is being given to the people who come under the

extensions of the Disabled Persons Act and the Blind Persons Act which were passed at the same time.
Hon. Gordon Churchill (Minister of Veterans
Affairs): Those two acts do not come under my supervision.


Douglas Mason Fisher: I wonder if the Acting Minister of National Health and Welfare could indicate whether the same consideration that was given to the veterans has been given to disabled persons and the blind.


Gordon Minto Churchill: I shall take that question as notice.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
removal of tolls, victoria and

Mr. Valade: Have requests for information, other than oral questions in the house, or representations concerning the removing of tolls on the Victoria and Jacques Cartier bridges, been received by the Minister of Transport: and, if so, from whom, and what was their nature?


Mr. Balcer:: Mr. Speaker, the answer to this question consists of a long list of municipalities. Perhaps the house would agree that it be printed in Hansard without being read.


Mr. Speaker:: The minister indicates that there is a long list. Would it be a page or more?


Léon Balcer: It is a list consisting of approximately 20 names.


Mr. Speaker:: Is it agreed that this list be printed as part of the answer?


Some hon. Members:: Agreed.
[Editor's note: The list referred to above is as follows:]
Representations suggesting the removal of tolls on the Victoria and Jacques Cartier bridges have been received from the following: cite de Longueuil; town of Chambly; corporation du village de St. Hilaire, comte de Rouville corporation du village de rouge-mont, comte de Rouville; corporation du village de McMasterville, comte de Vercheres; Corporation de la paroisse de St. Michel de Rougemont; ville de St. Hubert, comte de Chambly; town of Brossard, comte de La-prairie; la cite de Saint-Jean; ville de Pre-ville; Ste. Famille de Boucherville; Ville de Fort Chambly; ville de Marieville; cite de Lafleche; Sorel; cite de Jacques Cartier; ville de Boucherville; St. Basile le Grand; village de Richelieu; L'Association du Cam-ionnage du Quebec Inc.


*AIRPORT CONSTRUCTION, NEW BRUNSWICK
Mr. Michaud: 1.	Have moneys been appropriated for the purchase of land and/or land clearance for an airport at or near Dalhousie or Campbellton, New Brunswick; and, if so, in what amounts?
2.	Have moneys been appropriated for the construction of runways, road diversion, and ramps for proposed construction of an airport at or near Dalhousie or Campbellton, New Brunswick; and, if so, in what amounts?


Léon Balcer: Mr. Speaker, the answers to the two parts of this question are as follows:
1 and 2. No, but a project near Dalhousie has been receiving departmental study and an early decision is expected.


*ST. LAWRENCE SEAWAY ACCIDENTS, 1961
Mr. Fisher: 1.	Were there fewer accidents to shipping in the St. Lawrence seaway during 1961 than in the previous years; and, if so, can this drop be attributed to different or better pilotage arrangements or better piloting?
2.	Has Captain F. S. Slocombe of the Department of Transport or Captain A. T. Meschter of the great lakes pilotage administration made any comments upon this accident factor?
3.	Does such a drop lead the Department of Transport officials to expect a drop in insurance rates on shipping in the seaway?
4.	Does the department intend to make any representations to the underwriters adjustment bureau with regard to this subject?


Léon Balcer: Mr. Speaker, the answers to the four parts of this question are as follows:
1.	There has been a steady decline in virtually all types of accidents to shipping in the St. Lawrence seaway since it was opened in 1959. Many factors may have been involved in this improvement and the department cannot express an opinion as the prime cause.
2.	Captain F. S. Slocombe of the Department of Transport gave a brief summary of the principal figures illustrating the decline in accidents before a joint meeting of the dominion marine association and the lake carriers association at Dearborn, Michigan, on January 17, 1962. He made no comment on this information. Captain A. T. Meschter is an employee of the government of the United States and not of the government of Canada.
3.	Marine insurance is a matter for the shipping industry and the marine underwriters.
4.	No.


PUBLIC BUILDING, EDMUNDSTON, N.B.
Mr. Robichaud: 1.	Is it the intention of the federal government to proceed with the construction of a public building at Edmundston, New Brunswick, during 1962; and, if so, has the Department of Public Works purchased the land for the proposed building?
2.	What is the location of this land, from whom was it purchased, and at what price?
Questions


Mr. Walker:: Mr. Speaker, the answers to the two parts of this question are as follows:
1.	Yes; no.
2.	Not applicable.


VOLUME II, STATUTES OF CANADA 1960-61
Mr. Howard: How many copies of volume II of the statutes of Canada for 1960-61 were printed in (a) English (b) French, and what was the total cost of such work?


Mr. Dorion:: Mr. Speaker, the reply is as follows:
(a)	100.
(b)	29; at a total cost of $3,540.71.


EXPORT PERMIT APPLICATIONS REJECTED, TRANSSHIPMENT OF GOODS TO CUBA
Mr. Mcllrailh: Were any applications for export permits rejected in 1961 for the shipment to Cuba through Canada of goods from other countries; and, if so, how many, and what other countries were involved?


Mr. Morris:: Mr. Speaker, the answers to the three parts of this question are as follows:
1.	Yes.
2.	44.
3.	United States of America.
export PERMIT APPLICATIONS APPROVED, TRANSSHIPMENT OF GOODS TO CUBA


Mr. Mcllrailh: Were any applications for export permits approved in 1961 for the shipment to Cuba through Canada of goods from other countries; and, if so, how many, and what other countries were involved?


Edmund Leverett Morris: Mr. Speaker, the answers to the three parts of this question are as follows:
1.	Yes.
2.	162.
3.	Belgium, Brazil, Chile, Cuba (returned goods), Czechoslovakia, Denmark, France, Federal Republic of Germany, India, Italy, Japan, Mexico, the Netherlands, Sweden, Switzerland, Syria, United Kingdom, West Africa, United States of America.


FUME CONDITIONS, SAINT JOHN HARBOUR, N.B.
Mr. Herridge: Have any complaints been received concerning fume conditions existing during the winter port season months in the Pugsley terminals sheds on the east side of the harbour of Saint John, N.B.; and, if so (a) what was the nature of the complaints (b) who made them, and when (c) what answers have been given (d) what remedial action, if any. has been taken?
Answer by: Mr. Balcer:
Mr. Speaker, the answers to the four parts of this question, the national harbours board informs, are as follows:


* MICHAEL WARDELL, CANADA COUNCIL APPOINTMENT
Mr. Dumas: Was Michael Wardell (recently appointed to the Canada council) (a) born in Canada (b) educated in Canada; and, if not, how many years, if any, has he lived in Canada?


John George Diefenbaker: Mr. Speaker, the answer to this question is that Mr. Michael Wardell was not born in Canada. He was educated at Eton and came to stay in Canada in 1950.


*BANK OF CANADA CURRENCY SIGNATURES
Mr. Howard: 1.	What amount of currency, by denomination, bearing the signature of J. E. Coyne as governor of the Bank of Canada, is on hand at the Bank of Canada?
2.	When is it expected that currency will be distributed bearing the signature of Louis Ras-minsky as governor of the Bank of Canada?


ROYAL COMMISSION ON PUBLICATIONS
Mr. Herridge: What was the total cost to the crown of the royal commission on publications?
Answer by: Mr. Diefenbaker:
The answer is $126,236.63.


Mr. Fleming (Eglinion):: Mr. Speaker, I have the answer now to question No. 230, if it is the wish of the house to revert to it.


Mr. Speaker:: Is it agreed that the answer to question 230 may be tabled now?


John Whitney Pickersgill: It is an oral question.


Donald Methuen Fleming: Yes, Mr. Speaker, but it contains a number of figures and it might be placed on the record of Hansard without being read.


Mr. Speaker:: Agreed?


Some hon. Members:: Agreed.
[Editor's note: The answer referred to above is as follows:]


* PLEASANT BAY, N.S.-HARBOUR IMPROVEMENTS
Mr. Bourgei: Is it the intention of the Department of Public Works to undertake harbour improvements at Pleasant bay, Inverness county, N.S., this coming summer; and, if so, what is the extent of these improvements?


David James Walker: Yes. An extension to the skidway-this is not political-is being planned.


*LAND EXPROPRIATION, SAINT JOHN, N.B. URBAN RENEWAL
Mr. Dumas: Have any representations been received by the government alleging injustice in the expropriation of land for the east end urban renewal in the city of Saint John, N.B.; and, if so, what is the specific allegation, and what reply or action has been taken by the government?


David James Walker: I have received several telegrams and letters from associations representing a number of property owners in Saint John, New Brunswick, concerning the expropriation of an urban renewal area by the city. I have replied stating that their representations should be submitted to the provincial and municipal authorities, as the matter is one which falls within their jurisdiction.
^FRENCH CANADIAN PERSONNEL, GOVERNOR GENERAL'S FOOT GUARDS


Mr. Pitman: Is there any truth in the allegation that the Governor General's Foot Guards traditionally and presently confine French Canadians to the level of other ranks; and, if so, what are the reasons?
(Translation):


Mr. Chambers:: Mr. Speaker, there is absolutely no truth in that assumption. On the contrary, that battalion is proud of having French speaking Canadians among its officers, n.c.o.'s and other ranks. It is to be regretted that the hon. member put such a question on the order paper without first having examined the facts. Had he done so, he would not have inconvenienced this most distinguished unit.
(Text):



QUESTIONS PASSED AS ORDERS FOR RETURNS

[Stage Direction]
*	LOANS AND GIFTS TO RUSSIA, WORLD WAR H

Mr. Benidickson: 1.	Did the Department of National Revenue, customs and excise, have any information that gas or gasoline powered lift trucks, having a maximum lifting capacity (as now rated by the department) of 4,000 pounds at a load centre of 24 inches from the face of the forks, were made in Canada in the calendar years 1953, 1954, 1955, 1956, 1957, 1958, and 1959 prior to the budget of that year?
2.	If so, in which of these years were such lift trucks made in Canada, by whom were they made, and by what model designations were they identified?
*	INFORMATION DIVISION PERSONNEL, PUBLIC


SERVICE
Mr. Pifman: 1.	How many are employed in the information divisions of all the government departments?
2.	How many were employed in the existing information divisions in 1957?
3.	What is the total payroll of these information divisions?
Orders for Returns


TECHNICAL AND VOCATIONAL TRAINING
Mr. Piiman: 1.	On what date did the federal government reach agreement with each of the provinces in regard to the Technical and Vocational Training Assistance Act passed at the last session of this parliament?
2.	How many technical institutions designed to provide facilities for those who have left the regular school system have been approved for federal grants under this legislation?
3.	What are the names of these institutions, the cost of each, the federal share of the cost, and the estimated enrolment of these institutions?
4.	How many vocational teachers, instructors, supervisors, and administrators were trained in each of the provinces under provisions of the Technical and Vocational Training Assistance Act.


LEGAL ADVISERS, C.M.H.C., PETERBOROUGH
Mr. Piiman: 1.	What are the names and addresses of all legal advisers to the Central Mortgage and Housing Corporation in the electoral district of Peterborough in each of the years 1953 to 1961?
2.	What were the fees accorded to each of these advisers in the years 1953-61?



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: May I ask the Prime Minister whether the government proposes to enter with the United States into the discussions referred to by the United States secretary of state last week for the joint control nuclear weapons for Canadian armed forces.
Righl Hon. J. G. Diefenbaker (Prime
Minister): As I said last week, Mr. Speaker, discussions have taken place from time to time. There is no present intention to follow the course suggested by the hon. member in his question.


Lester Bowles Pearson: I rise on a point of order, Mr. Speaker. I did not suggest any course. I merely asked the Prime Minister a question and made no suggestion for any course at all. The Prime Minister's inference was entirely unwarranted.


John George Diefenbaker: I was just trying to help the hon. gentleman out.



USE OF NUCLEAR WARHEADS

[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Trinity):: I should like to direct a question to the Minister of National Defence. In the absence of a bilateral agreement with the United States of America, is it possible for Canadian forces

Inquiries of the Ministry in NATO to acquire and use nuclear warheads for the weapons they already have which have been constructed for use with nuclear warheads?


Hon. D. S. Harkness (Minister of National Defence):: Mr. Speaker, I think the matter of nuclear warheads was dealt with pretty fully throughout last week by the Prime Minister, and I do not think I have anything further to add at the moment.


Paul Theodore Hellyer: I wonder whether the minister would mind just answering the question. Is it possible for Canadian forces in Europe to acquire nuclear warheads without a bilateral agreement with the United States?


Paul Theodore Hellyer: I wish to direct a question to the Minister of National Defence. Has there been any discussion in NATO concerning the possibility of the United States supplying its NATO allies with a new mobile medium range rocket specifically designed to fit NATO's defence needs in western Europe?


Douglas Scott Harkness: I have some indication in the newspapers of such a discussion or proposal having been made, but as yet I have received no official confirmation from our officials at NATO headquarters.



ARCTIC ISLANDS-REPORTED SELECTION OF LANDING STRIPS BY U.S.

[Stage Direction]
On the orders of the day:
Douglas Scott Harkness: Mr. Speaker, on Thursday last the hon. member for Laurier referred to a recent news report to the effect that the United States had picked out some 50 emergency landing strips in the Canadian Arctic islands for military and civilian planes. He asked if the statement was factual and whether there were any conditions governing the use of these fields, and I told him I would get a report. The answer is as follows.
The report apparently referred to a United States study entitled "Terrain Analysis of Ice Free Land sites in Arctic Canada" dated February, 1961. As part of the United States arctic research program a study was performed during 1960-61 with the assistance of Canadian Aero Service Limited of Ottawa. The major purpose of this project was the identification, location and preliminary terrain analysis of the most promising ice free natural landing sites within the Canadian Arctic, north of the 65th parallel. The study was based entirely on an examination of aerial

photographs taken by the R.C.A.F. and readily available to the general public through the Department of Mines and Technical Surveys. It indicated that there are some 50 sites within the area where landing strips could readily be developed.
The results of the study have been made available to the Canadian government departments concerned, and through the Department of Northern Affairs and National Resources to interested commercial companies. To date there are no plans for the development or utilization of these possible landing strips.



REPORTED CRITICISM OF CANADIAN POLICY BY U.S. SENATOR

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: wish to direct a question to the Prime Minister. In view of press reports that United States Senator Wayne Morse on Saturday strongly criticized Canada's trade with communist countries and indicated that he wished strong U.S. government pressure to be brought to bear on Canada to effect a change in our policies, will the Prime Minister assure the house and the country that the Canadian government has no intention whatsoever of meekly reversing policies which have the support of the majority of the Canadian people?


Mr. Speaker:: Order. If the Prime Minister considers it appropriate to answer the question I would not offer any objection. However, may I make this observation to the hon. member. The question about Canada's policy with respect to trade with Cuba has been asked several times this session and answers have been given. It would not seem to me to be appropriate to ask questions again every time some foreign politician or even a United States senator makes some comment on the matter.


Herbert Wilfred Herridge: With all due respect, Mr. Speaker, may I submit that this was a rather unusual statement over the week end. We wondered whether the government had been shaken.


Mr. Speaker:: What I have said is in the interest of keeping this period of our business within bounds. If I accepted a new question every time a critical remark is made, it would be difficult to achieve this objective. However, I do not wish to limit an hon. member with respect to a matter which he

considers to be urgent. I do not object to the question being answered if the Prime Minister desires to. I would simply point out that the matter was dealt with a short time ago.



SHIPPING


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: May I direct a question to the Minister of Transport, notice of which I have sent him. Has the government come to any decision on the request made by the Canadian brotherhood of railway transport and general workers to the minister with respect to the re-establishment of a Canadian merchant marine, as contained in their annual brief to the minister?


Léon Balcer: Mr. Speaker, in their brief the brotherhood asked for the re-establishment of a Canadian merchant marine of the same type as the Canadian National Steamships, Canada-West Indies Steamship Corporation, or Park Steamships. The only answer I can give is that there has been no decision to change the policy of the government, and if and when a decision is taken in this matter it will be announced in due course.



NOVA SCOTIA


[Stage Direction]
On the orders of the day:
Léon Balcer: Mr. Speaker, on Thursday last the hon. member for Queens-Lunenburg asked a question concerning pollution from bunker oil on board the S.S. Suerte, aground near Three Fathom harbour. Many inquiries have also been made by and discussions held with the two members for Halifax on this matter, and I should like to make a report to the house.
An official of my department has made several visits to the vessel, accompanied by salvage officials. Bunker oil must be heated before it can be pumped and the flooding of the engine room has prevented this being done. I am also advised that the surrounding waters are so shallow and dangerous that other vessels of sufficient size to provide heat and power could not come alongside.
The department has, however, just been advised that a contract to salvage has been arranged by the owners of the ship, who have been notified that in the meantime and during salvage operations every precaution must be taken to prevent or minimize the escape of oil. It is expected that an attempt to move the vessel will be made shortly.
26207-1-93J
Inquiries of the Ministry TRANSPORT



WELLAND CANAL


[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Has the government decided to remove tolls on the Welland ship canal?


Léon Balcer: Mr. Speaker, I received a delegation from the Welland ship canal toll abolition committee, and the hon. member was also present. The group that came to see me discussed with me various factors that should bring about the abolition of these tolls. The matter is under consideration, and if and when a decision is taken it will be announced in the proper fashion.



CHAMPLAIN WATERWAY


[Stage Direction]
On the orders of the day:
Lionel Chevrier: I should like to direct a question to the Prime Minister. In the light of some of the statements made during the discussions of the Canadian-American interparliamentary committee to the effect that thus far no official reference of the question of the Champlain waterway cut-off had been made to the international joint commission by Canada, I ask the Prime Minister if the government of Canada has referred this subject, as I understood it did some weeks ago, to the international joint commission.
Right Hon. J. G. Diefenbaker (Prime
Minister): Mr. Speaker, I think the house had better await the return of the Secretary of State for External Affairs.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Nicholas Mandziuk (Marquette):: I wish to direct a question to the Prime Minister and ask him who will be representing Canada at the disarmament conference in Geneva.


John George Diefenbaker: While I have not seen the text of the letter from Mr. Khrushchev to the President of the United States, I understand that he suggested that the Geneva conference should be preceded by a meeting of the foreign ministers of the United States, United Kingdom and the Soviet union, and that the conference as a whole should begin at the

Inquiries of the Ministry foreign ministers' level. That being so, the head of the Canadian delegation will be the Secretary of State for External Affairs.



PUBLIC WORKS


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: In
view of public interest and concern I wish to direct this question to the attention of the Minister of Public Works. First, would he explain to the house the news reports concerning his titillating mistake with respect to the Tilleys, which has some of us in a tizzy. Second, does this represent indirect notice of the government's intention to reintroduce titles in Canada?


David James Walker: Whether it was a titulating mistake or a titivating mistake, it certainly made one man happy for a day. He was king for a day. It was a great pity that when the name "Sir Leonard Tilley" was to be given to this building of the defence research board, our department did not do more research before asking the wrong man, but I think justice has been done under the circumstances and all parties are happy with the outcome.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllraiih (Oitawa Wesi):: I desire to raise a matter of privilege affecting the rights of private members on the question hour, with particular reference to written question No. 70 on today's order paper. It will be noticed that that question is very clear in its form, is very short, and asks a simple question of fact. It has been permitted to stand on the order paper day after day as questions have been called. It will be noted also that on February 28, as appears at page 1344 of Hansard, the Prime Minister was asked a question on the same subject by the hon. member for Swift Current-Maple Creek, and in the answer given to that question it became quite clear that the information available to answer No. 70 on the order paper was in his possession.


Mr. Speaker:: Order. I wonder if the hon. member has any precedent for raising his question of privilege regarding hon. members of the house, dealing with delay, reluctance, refusal, or whatever it may be, to answer a question.


George James McIlraith: Speaking to the point of order, as I understand the matter I have no such right to raise a matter of privilege on any delay in answering questions, but I have a right as a private member if the Prime Minister, in his capacity as Prime Minister, has information available and provides it for one hon. member and not for another. That affects the right of all hon. members.


Mr. Speaker:: I would doubt if the hon. member could cite a precedent for any statement of that kind. When the refusal to answer questions does not raise a question of privilege, then surely there is no matter of privilege involved in what the hon. member says. If an answer were given outside of the house to a question which was not answered in the house, that might raise the question of the rights of the house or of hon. members. It seems to me that the fact which has been stated might give the hon. member scope for argument, but not the basis for a point of privilege.


George James McIlraith: The only point of privilege that can arise is that in the House of Commons I had assumed it was rather elementary that all private members have equal rights, and that there cannot be different treatment accorded to different members on public business; and that the test as to whether or not information is given to the house cannot be based on which hon. member asked the question. That is the only point of privilege.


Mr. Fulton:: The hon. member has not established any breach of the rights of hon. members.
Right Hon. J. G. Diefenbaker (Prime
Minister): That last statement cannot go unchallenged. Certainly private members have equal rights. The question I answered had to do with payments made during the month of February and whether there were payments to be made on account during the subsequent months. The written question by the hon. member for Ottawa West has to do with the date of an agreement, how many individual contracts have been signed, and what is the date of each. The general principle as to the rights of private members being equal is accepted and always has been.


George James McIlraith: Answer the question.


John George Diefenbaker: I am sure the hon. member is just raising the question in order to make himself heard.


George James McIlraith: And to call attention to the delay.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. John R. Malheson (Leeds):: May I ask
the Secretary of State when he will be able to reply to question No. 72, which was made an order for return on January 31 last.


Noël Dorion: shall make inquiries.
(Translation):



AIRPORTS


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I should like to direct a question to the Minister of Transport.
In connection with the dispute at Montreal concerning the control over taxi service at Dorval's international airport to show that the contract awarded by the federal government infringes upon property and civil rights, could the minister tell the house if the government is represented in any way in this litigation and, if not, has the minister any comments to make in that connection?


Léon Balcer: Mr. Speaker, this matter is presently before the courts and as such is sub judice. Consequently, it would not be proper for me to express an opinion one way or the other.


Lionel Chevrier: Is the government represented in any way in that litigation?


Léon Balcer: No, Mr. Speaker.
(Text):



SMALL BUSINESSES LOANS ACT


[Stage Direction]
The house resumed, from Thursday, February 15, consideration of the motion of Mr. Fleming (Eglinton) for the second reading of Bill No. C-49, to amend the Small Businesses Loans Act.
Mr. Waller Piiman (Peterborough):: Mr. Speaker, when the house was debating this resolution some time ago I traced the history of this legislation and tried to indicate that this was one of the four great measures brought forward by this government a year ago last fall as the four corners of the great edifice against unemployment, along with the Vocational Training Act, the amendments to the National Housing Act, and there was one
Small Businesses Loans Act other piece of legislation that went along with those whereby unemployment was to be combated.
This government came into power, at least in part, on its promise to help the small businessman, and it set up a small business department in the Department of Trade and Commerce. The only thing about this department is that it remained small, and I cannot really see that it has helped the small businessman very much. The first year it appeared in the estimates with a grant of some $30,000. Last year it received nothing. I looked in vain this year in the estimates-


Donald Methuen Fleming: Mr. Speaker, the hon. member must realize that is quite wrong. The appropriation for the small business loans branch of the Department of Trade and Commerce is there in the estimates. It is included in a larger item now. This was discussed on the estimates in the last session.


Walter George Pitman: What the minister is really saying is that it has been absorbed and has now appeared as a part of another section, but I think we can say that this department has made no real, significant change in the way this government has dealt with the small businessman since the last election.


Donald Methuen Fleming: That is a silly statement; it is not true.


Paul Joseph James Martin: It is true.


Donald Methuen Fleming: It is untrue.


Walter George Pitman: Supposedly this measure for loans to the small businessman was to provide a great pool of some $300 million government guaranteed, and strangely enough the small businessmen across this nation refused to dip into this pool except to the extent of some $27 million.
I am sure hon. members on the other side of the house realize that the availability of capital is the most important aspect of taking part in business today.
A few days ago I was reading a little book by two men called Adler and Kelso. They were the authors of a book which caused quite a furore sometime ago entitled "The Capitalist Manifesto". This new little book is called "The New Capitalists". I think it should be read by hon. gentlemen on the other side of the house who are going to fight the next election on the basis of free enterprise and maintaining our capitalist system. These authors say that our system is going down, and the main problem is that the large capitalist can finance his day to day activities by acquiring more capital, in comparison with the man who has to go into the open market to get it. The advantage is always with the large corporation to the

Small Businesses Loans Act disadvantage of the small business. To put it bluntly, those who have will get more, and those who have not will get less.
Of course as time goes by capital is going to be more important than labour. The importance of labour as compared with capital is declining year by year. These authors look ahead for many years and see a situation whereby the capital of the nation will be controlled and concentrated in fewer and fewer hands. They say this is wrong, and that if we are to stop this happening we must take a very great leap forward. The solution of the author is to make everyone a capitalist, and he calls it the new capitalism. He points out that we must use the insurance principle to deal with the problem of entrepreneurial error which makes it almost impossible for the small investor to take a chance.
This bill is in a sense trying to do somewhat the same thing; it is within this area. It is taking a direct approach and placing capital in the hands of those who need it. The small businessman, as we have seen, is driven constantly to the loan company, to high interest rates, to restrictive terms. The important thing about this piece of legislation is that although it looks good on paper, it simply is not fulfilling its purpose.
A recent article in the Globe and Mail of Tuesday, February 6 indicated that there are some 64,000 small businesses and small manufacturing firms which have assets of less than $250,000 and which come within the purview of this legislation. This is multiplied, of course, when we take into account those businesses which are in the service, retail and the tourist fields, all the areas which this broad piece of legislation was expected to cover, of which only some 2,000 have taken advantage of this legislation.


Some hon. Members:: Some 3,000.


Walter George Pitman: Well, between 2,000 and 3,000.


Paul Joseph James Martin: Twenty seven million dollars out of $300 million.


Walter George Pitman: I know one bank in Peterborough which is absolutely surrounded by small businesses; it is one of the oldest banks in the city, but it does not have one single loan on its books under this legislation. I know another bank where they have had some 25 requests, not one of which came within the demands of this legislation. I tried to get information on this bill. I think if hon. members will look at Hansard, page 1243, and the questions I put on small business loans they will see how I tried to get information which I felt was extremely important if we were to judge this piece of legislation and

look at the measure with which we are now dealing with some kind of knowledge. I asked question No. 175;
What was the total amount of money lent under last session's Bill No. C-40 (Small Businesses Loans Act) in the year 1961?
The answer was $25,582,269.41. My second question was:
How many loans were made during 1961 under
the said act?
How many loans were made in amounts from (a) up to $500 (b) $500 to $1,000 (c) $1,000 to $5,000-
And so on. In other words I wanted a breakdown of the number of loans and the amounts loaned under this legislation. That information was unavailable. Perhaps the Minister of Finance could tell us why this kind of information is not available on what I consider to be an extremely important piece of legislation. There is no breakdown of the loans which have been made under this legislation.


Donald Methuen Fleming: Mr. Speaker, I can answer the hon. member right now.


John Whitney Pickersgill: We are not in committee.


Donald Methuen Fleming: This information has not been broken down in this form as yet. I am told it would take at least two weeks to break down the information we have into the detailed categories the hon. member set forth in his question.


Walter George Pitman: I wish the minister had mentioned that at the time, because simply saying that the information is not available would lead one to believe that it was not going to be made available. My next question was:
How many applications were (a) received (b) rejected?
Once again this information is not available.


Donald Methuen Fleming: The government has not got that information; that is information the banks have. They receive the applications; they deal with them and accept or reject them. The government is given information only as to loans that are allowed to which the government guarantee applies.


Walter George Pitman: I thank the minister for that information, but it would seem to me that if the government is going to have any complete view as to how effective this legislation really is to the small businessman, this is the kind of information it would be very well to get from the bankers.


Donald Methuen Fleming: You cannot.


Walter George Pitman: It seems to me that if we are to be able to tell whether the small businessman can really benefit by this kind of legislation, these government guaranteed loans,

surely we should know how many are being rejected because they do not come within the purview of this legislation. It would seem to me, on the basis of the comments I have heard from many people, that this is simply not getting through. Last year when we talked about the industrial development bank I was heartened by the fact that at least two members spoke up and said there should be a more liberal policy, that there should be more inclination to take a chance when making advances to industries applying to this government agency for loans. That surely is the view I might have expected would have been taken with regard to this legislation.


Donald Methuen Fleming: That is quite different.


Walter George Pitman: I fail to see how it is quite different, and I say so in the sense that here again the government is trying to make credit available to smaller groups, though in relation to the industrial development bank they were trying to make capital available to the larger companies.
I would refer the minister to the remarks he made when he introduced this legislation in the house as reported in Hansard at page 55, 1960. It was suggested then that the expectation was that the government guarantee would encourage lending and increase the availability of medium term credit to small business. The minister then seemed to be very interested in comparing this legislation with the Farm Improvement Loans Act. He said- and I am quoting from page 55 of Hansard:
The general nature of the legislation is similar to the Farm Improvement Loans Act.
He went on to say it was similar in form to the Farm Improvement Loans Act. Then he added:
It has been represented to us by small business organizations that the amount of contract work available in the course of renovation and extension of premises of small retail businesses in Canada amounts to approximately $75 million.
Yet, we find that the total loans made under this act for that year amounted to only $25 million. Let us look at the results of the Farm Improvement Loans Act. In 1960 some 68,041 loans were made under the terms of that act. Under this legislation 2,977 loans were made. In that period $101 million was lent under the provisions of the Farm Improvement Loans Act. Under this act the amount made available was $25 million. Let us look at the size of the loans. Under the Farm Improvement Loans Act the average size of the loans made was $1,497. Under the Small Businesses Loans Act it was $8,593. I think it was the hon. member for Ottawa West who dealt with the whole question of putting the number of companies at the top.
Small Businesses Loans Act What is happening to the people at the bottom? It seems to me that $8,593 is rather a high average for loans to small businesses. I wonder what has happened to the grocery store owner, the motel owner, the small businessman who will only need one or two thousand dollars. I am sorry we do not have a breakdown of these loans so we could see what has happened to the people at the bottom.
I do not think I need go over the statements which have been made by the hon. member for Welland in this respect. Those we are trying to cover in this legislation are those who have managed to survive the last three years of Conservative recession, and those who hope to survive the next few years. This measure obviously does not cover those people. One person who is closely associated with banking has said of this that it looks good but it does not seem to cover the people he serves. This man is surrounded by small businesses. Small businesses have been very badly hit by this recession. They have suffered far more than the large corporations. They cannot create their own capital, and they are dependant entirely on the market place for their credit. Now they find that these regulations are too stringent.
Here again the problem is not just one for the bankers. What the banker does is determined by a conservative finance policy, conservative with a small "c". He has to make sure that his money will come back, and he has to be more than sure under the terms of this legislation. Yet surely this government must recognize its responsibility for having created an economy which has been to the detriment of the small businessman. The fact is that the small businessman, like the small farmer, has found his position destroyed by the recession, and is no longer able to compete on a practical basis.
I am trying to be constructive this afternoon. Perhaps we could look to the Department of Agriculture for some guidance concerning how to make this bill of real assistance to the small businessman who really needs help. I look with some interest at the work of the Farm Credit Corporation. We have a small businessman's section already in operation in one of our departments; the minister and I disagree as to how effective it has been. But it is in this area that I wish to suggest a direction in which improvements might be made. A tremendous effort could be made in terms of enlarging the scope of this section, even to the point where its officials could go into an area, talk with those concerned, find out what money is needed, find how a business is operating and what help is really required as a basis for
1470	HOUSE OF
Small Businesses Loans Act giving the businessman concerned some assistance in improving his enterprise and making it really worth while, as is done by officials of the Farm Credit Corporation. That organization does not simply say "It looks as if we shall not get our money back here, so we will let this applicant go without it and get along as well as he can". The small businessman needs help and advice as well as credit.
Some may say that this sounds like socialism. I do not think so. I think it is a sensible way of dealing with this problem. I think small business is in a bad way, and we must take its problems into account. I hope this government will take a different look at the difficulties now confronting the small businessmen of our nation.


Mr. Hubert Badanai (Fort William):: As an
advocate of long standing for greater consideration by lending institutions to small businesses, I welcome the amendment to the Small Businesses Loans Act before us which extends the availability of loans to include the construction or purchase of other premises, if the premises in which the business now conducted cease to be available, or if it is considered advisable to move to other locations or extend facilities to enable the expansion of business. I doubt whether there is a class of business, outside of small farmers, who are more deserving of consideration than these businessmen whose contribution accounts for 60 per cent of the internal trade of Canada, to say nothing of their individual contribution to the welfare and public life of the community in which they live. Often they give much of their personal service gratis, at no small sacrifice.
I would like to point out the contribution made by the tourist camp and motel operators to the wealth of our nation. The tourist industry has reached a status of great importance to the economy of Canada. Only wheat and newsprint bring in more money from outside Canada than do tourists. Only newsprint brings in more money from the United States than does the tourist industry. It benefits Canada in many ways.
I think it is sound to recognize the tourist business for what it really is. Figures show that it is one of the major Canadian industries. In spite of considerable expansion in motel and tourist resort promotion we are still far behind the United States in tourist facilities, not because of a lack of qualified persons eager to go into the business but because those people who are really interested cannot get the money to start a business.
The recently completed lake Superior circle super highway, which follows the lake from Sault Ste. Marie, Ontario, south to Michigan,


Wisconsin and Minnesota, and finally Fort William, is 1,200 miles of scenic splendour, but unfortunately the Canadian side lacks the accommodation for the thousands of tourists who are coming in an ever increasing all year round calvacade to enjoy such inspiring sights as only the rugged shores of lake Superior can provide. It creates additional business and employment. Our tourist operators can hold Canadians in Canada and keep in circulation here money which would otherwise be spent abroad.
Travel by Canadians within Canada promotes a deeper understanding and appreciation of their own country and fosters national unity. In other words, tourism benefits everybody.


Mr. Speaker:: Order. I wonder whether the hon. member would consider that he has sufficiently expounded all the virtues of the tourist industry to bring them within the purview of this act. We are really not debating the tourist industry. It is true that we are debating small business in the tourist field in so far as this amendment is concerned, but I suggest it does not open the door to a general review of the tourist industry.


Hubert Badanai: Mr. Speaker, on the point of order, with due deference to Your Honour's opinion on the matter, we are speaking about small business and I consider the small operators in the tourist industry to be engaged in small business. That is the way I view the matter. I submit it is the course of wisdom on our part to keep our tourist operators in business in order to retain the tourist dollar in the country.
I submit that in referring to the tourist business in discussing this amendment I am merely emphasizing the need of the small operator who is a small businessman. With respect, I submit I am quite in order in speaking on behalf of the tourist operator who, after all, is a small businessman. Those who provide the tourist accommodation required to meet the increased demand are entitled to the assistance which this amendment is supposed to provide. Today the tourist industry is developing from what it used to be-camp resorts offering cabin type of accommodation-to up to date modern establishments, because tourists demand accommodation equal to that which is provided by modern hotels.
Most visitors come to Canada from the United States by automobile, and this mode of travel creates a greater demand for roadside accommodation of the highest quality. Although many motels have been built in recent years, a substantial percentage of

Canada's motels and cabins needs to be improved and enlarged. There have also been sharp increases in tourism by Canadians visiting vacation spots in Canada. While no complete information is available concerning interprovincial travel, it seems fairly clear that the value of travel by Canadians within Canada is of an importance equal to that of the tourist business from the United States.
The expansion and improvement of Canada's tourist establishments, which include resorts, restaurants, hotels, motels and camps, are urgently required. At present the facilities which are inadequate and outmoded are being compared unfavourably with the more modern establishments which the travelling tourist expects, and the modernization of many of these businesses requires capital which quite often the operator is unable to borrow through ordinary banking facilities. This applies, of course, to tourist resorts and motels which, by reason of the relocation of highways, have to be removed to other locations.
I realize that with the passing of the government sponsored bill last year, No. C-40, provision was made for government guaranteed loans by chartered banks to small businesses, which has been of some help to small business enterprises for improvement and modernization of equipment and premises. However, some small businesses have encountered difficulties, notwithstanding the act, resulting in refusals by the banks to grant reasonable term credit to these proprietors of small businesses.
The minister has pointed out in reply to the hon. member for Peterborough that the department has no record of applications to the chartered banks under this legislation. This is an important omission. Surely the government should be kept informed as to the number of loans approved and the amounts, and also the number of applications for loans which were rejected. I dare say that the latter is greater than the former.
The major problems of the small retailer are a shortage of adequate long term capital and a shortage of well trained personnel. The small business is a major factor in the Canadian economy. The late Henry Ford staunchly declared that the small businessman was the backbone of the nation, which is just as true today as it was in Henry Ford's time.
Small businesses can be likened to a barometer which measures the economic climate of the country. Let us consider the impact on the national economy if the approximately 450,000 small businesses, including retailers, tourist operators, small service operators employing from 2 to 15 to 20 persons, were able 26207-1-94
Small Businesses Loans Act to hire one or two more. There would be a business boom which would practically eliminate our present serious unemployment problem.
It is a pity that when the government established the productivity council the small independent business was ignored, notwithstanding the statement of the Minister of Trade and Commerce to the effect that the legislation provided for representation of all sectors of the economy. As far as I know, big business and the labour congress are the only groups represented on that body.
Good as this amendment to the Small Businesses Loans Act is, small business in Canada deserves greater recognition. The small tourist camp operators and motel owners and the independent stores are the real custodians of the principle of free enterprise. Here we see at first hand the workings of the profit and loss system. Here we see the reward of success, invariably made possible by recognition of efficiency, resourcefulness, hard work and integrity.
Notwithstanding the growth and expansion of big business, which is a trend developed by large investments, small business will continue to exist and be the mainstay of free enterprise because of the opportunity it offers for ingenuity, initiative and love for work. I cannot think of a better champion of democracy than the businessman who is self employed and knows the names of all his employees and many of his customers.
These are the people whom this bill is designed to assist. I submit that they deserve even more consideration than the bill contains. Some form of long term financing is needed to help those who wish to expand or relocate their premises. More than once I have had the opportunity to observe long established small independent businesses driven to the wall and into bankruptcy because of lack of sufficient capital to improve services and expand their holdings. They were unable to compete with large chain stores; their cheery personal services are gone and, sad to say, with them a part of the economic backbone of the nation is also gone.
In addition to lack of capital, small business establishments are handicapped by discriminatory freight rates in sections of the country such as northwestern Ontario, where horizontal freight rate increases over the past 10 years have driven to the verge of ruin many businesses, small and large.


Mr. Bell (Carleion):: Mr. Speaker, I have refrained from rising previously on a point of order in the hope that perhaps the hon. gentleman might get back in order, as you suggested. However, he is now talking about freight rates. He has talked about everything
1472	HOUSE OF
Small Businesses Loans Act else except this bill. With great respect I suggest that there ought to be insistence that he conform to the rules and discuss the bill.


Mr. Speaker:: I think the point is properly taken. I may advise the hon. member for Fort William that the principle involved is the guaranteeing of bank loans to small businesses. He should relate his remarks to that principle.


Lionel Chevrier: May I draw your attention to one thing, Mr. Speaker. In the consideration of small businesses and the profit or loss in relation to small businesses, freight rates are a very important factor. I presume the hon. member was making that point during the course of his remarks. I would ask Your Honour to take that matter into consideration.


Mr. Speaker:: Perhaps the hon. member would proceed in the light of what I have said.
t


Hubert Badanai: Thank you, Mr. Speaker. Again I am obliged to say that freight rate discrimination has an adverse effect on small business establishments.


Mr. Bell (Carleton):: Order.


Hubert Badanai: I am merely pointing out the situation. I am going to say this. This amendment is designed to help and assist the small businessman. I am trying to point out a way in which to assist him. I know the difficulties the small businessmen are confronted with in the form of any discrimination. In any event I am in favour of the amendment. I do not wish to prolong the debate on it. I think we all agree, with some reservations. It should go a little further. We should know the number of people who have applied and were turned down. We should know the amount of money invested in these small businesses and guaranteed by the government. I think it would assist the government a great deal, and also assist the small businessman.
For my part I am in favour of the amendment, notwithstanding the fact that it does not go far enough. However, I am sure that those who have been unable to borrow money under the old act will now try again. I express the hope that they will receive fairer consideration and will be able to borrow sufficient to meet their needs under this present legislation.


Mr. J. H. Horner (Acadia):: This legislation has come before the house two or three times this session, Mr. Speaker. While I had not intended to speak on it, I believe that up to this time two things have been overlooked. I wholeheartedly support the amendment to the Small Businesses Loans Act. As to a businessman who has an established business,


and who for one reason or another finds it necessary to move his location, this amendment will allow him to borrow in order to make the move.
The hon. member for Peterborough went to great lengths in comparing this particular measure with the Farm Improvement Loans Act. They are similar in many respects. He said that while under this measure, which has been in effect for one year, $25 million is lent, that was a small amount having regard to the principal with which it was set up, namely $300 million. He compared it to the $75 million lent under the Farm Improvement Loans Act in 1960. However, it must be remembered that this act has been in effect just a shade better than a year, and at the time of the figures he was using it had only been in effect one year. Under the Farm Improvement Loans Act, in the first year in which it was in effect, approximately 4,000 loans were made and $3,381,000 lent.
I think it is only fair to compare like years in respect of one act with like years in respect of the other, if you are going to draw a comparison. When the Farm Improvement Loans Act was set up the aggregate principal amount was $250 million. While they are similar acts, certainly the Small Businesses Loans Act has been readily accepted and has made a substantial contribution to small business and to the men in business. If this act continues to grow in the way the Farm Improvement Loans Act has grown since its inception back in 1944, it will continue to play a great part in the development of this country.
The hon. member for Peterborough went on to say that the average amount lent under the Small Businesses Loans Act was $8,500, and he compared this with the average amount lent under the Farm Improvement Loans Act which was $1,400. However, he did not know or did not realize that while a farmer may have several farm improvement loans at one time, his total amount in any one year may be up to $7,500 under the Farm Improvement Loans Act. I suggest that most farmers would be paying on possibly an average of $4,500. I am just taking that figure out of my own general knowledge of my own area. Under the Small Businesses Loans Act I am sure it would be more than likely that a small businessman would have one loan, and that would be the average of $8,500. I think the averages compare rather well, considering also the fact that under the Small Businesses Loans Act the businessman can borrow up to a maximum of $25,000 if his business is large enough.
The hon. member tried to portray to the house and to you, Mr. Speaker, a picture showing that the Small Businesses Loans Act

was not going to play a part in the development of Canada and was not going to meet the condition which it was first thought it would meet. By comparisons he tried to portray this picture, by comparing the effect of this act with the effective part the Farm Improvement Loans Act has played over the years in helping out a great many farmers. I submit that he made a very poor comparison when he sought to compare the figures for the very first year of operation of this new piece of legislation with the last figures available for a well established piece of legislation which the farmers have become accustomed to using a great deal.
I think I have pointed out to you, Mr. Speaker, and to the house that the Small Businesses Loans Act compares very favourably with other legislation, and I think it will go on to play a major part in the development and continuing expansion of this country.


Mr. Erhari Regier (Burnaby-Coquiflam):: Mr. Speaker, I was very interested in the remarks just made by the hon. member for Acadia. Among his contentions I noted his claim that this legislation had made a substantial contribution to the welfare of small business in Canada. I may not be using his exact words, but I believe I am quoting him with reasonable accuracy. I submit that this act has made a substantial contribution to the welfare of our banking system and the chartered banks of Canada, because under the terms of the act they have been making loans that in all likelihood they would have made in any case. They have been happy to enjoy the benefits of this legislation. Any rather marginal loans they made in the past are now in effect insured by the government of Canada; therefore they do not need to run any substantial risk with regard to the loans they make.
I say this with the particular thought in mind that according to the terms of the legislation the banks are still entitled to collect the maximum rate of interest permissible under the provisions of the Bank Act. We have heard many comparisons of this act with the Farm Improvement Loans Act. However, there is an important distinction. If the government of Canada underwrites a loan made under the Farm Improvement Loans Act, the guarantee of the government of Canada has the effect of reducing the interest rate that the borrower must pay. This condition does not apply in the case of the Small Businesses Loans Act. While the government likes to compare this legislation with the Farm Improvement Loans Act, I regret very much that it has not seen fit to insist that the guarantee by the government 26207-1-94J
Small Businesses Loans Act should merit a reduction in the maximum allowable interest rate. I would hope that the government would heed the advice we gave it when it first introduced this legislation and bring in an amendment to establish a maximum interest rate for any loans made under the terms of this act, in line with the maximum rate now applicable to loans made under the Farm Improvement Loans Act. After all, the bond of the people of Canada should be worth something. Having in mind that the banks are permitted to collect 6 per cent interest on risks that they assume entirely, if they receive a guarantee by the people of Canada with regard to a major portion of any loan under this act I feel this should warrant a reduction of the maximum interest rate that the banks are able to collect.
By the government's failure to establish a maximum interest rate permitted to the banks of Canada under the terms of this legislation it is in effect announcing to all and sundry that the word of the government of Canada does not mean very much. The government is in fact saying to the banks "You can make loans on your own or you can make loans with our guarantee. Do as you please; you can collect the same rate of interest in either case". Naturally the banks are going to take the guarantee. In fairness and justice to the taxpayers of Canada and also in the interests of the small businessmen of Canada, I believe that if we guarantee loans by legislation the maximum permissible interest rate should be reduced.
I should like to endorse the sentiments expressed by the hon. member for Fort William. I have encountered many operators of tourist camps or trailer camps who find themselves without adequate facilities under either the Industrial Development Bank Act or the Small Businesses Loans Act. I believe it is time to call to the attention of the government the needs of people engaged in this type of enterprise. I believe we are losing a lot of potential revenue in not making available to these people adequate financial resources. At the present time they have only one place to go for the money they need, to the money racketeers of our nation, and this greatly handicaps them in their efforts to establish competitive enterprises in the tourist industry.
I noticed how touchy the minister was when the hon. member for Peterborough reminded him of what we have noted in the blue book of estimates over the past number of years. When the government first established a so-called branch in the Department of Trade and Commerce which was ostensibly designated to advance the interests of small business, the magnificent sum of $30,000 was
1474	HOUSE OF
Small Businesses Loans Act allocated to that effort. At that time I called the attention of the government to the fact that this would not even help one small service station operator in my constituency to gain real independence for himself. The amount was hardly enough to pay for more than the mailing of one mimeographed letter of advice to the many hundreds of small business operators in my community.
After having expressed our disappointment at the small effort on the part of the government that was indicated when the branch was established, namely the provision of $30,000 to encourage small business in the whole of Canada, I shared completely the disappointment of the hon. member for Peterborough when the item disappeared completely from the blue book in the following year.


Mr, Fleming (Eglinlon):: That is not true.


Erhart Regier: Yes, it is.


Donald Methuen Fleming: It was included in another item.


Erhart Regier: We have now received the blue book of estimates for the coming year, and once again not a nickel is allocated to the cause of helping the small entrepreneurs of Canada.


Donald Methuen Fleming: That is completely untrue.


Erhart Regier: It is not completely untrue. The minister cannot point to any specific item in the blue book that is designed especially to advance the interests of what he likes to brag about so much, free enterprise in Canada. The government is going right down the line followed by previous governments, and from our observations aid to small businessmen has for all practical intents and purposes been written off as impractical and no longer necessary because in the view of the government their contribution, their initiative and desire to be of service to their fellow men can well be dispensed with.
This was also obvious in the refusal of the government to supply the information requested by the hon. member for Peterborough. The minister cannot get off the hook as easily as he attempted to do by saying that the government does not have this information available. If this government is prepared to guarantee loans, then it has every right- indeed, I would go beyond that and say it has every obligation-to obtain the necessary statistics on the loans that the taxpayers of Canada are being asked to guarantee.


Paul Joseph James Martin: Otherwise why spend even $30,000 a year?


Erhart Regier: Obviously the government does not recognize that the taxpayers have a legitimate claim on it to account for the guarantees; and obviously the government, if it is unwilling to report its activities in this matter, would not, as the hon. member for Essex East said, have any justification for spending even $30,000 in the estimates of the year before last.
I am rather disappointed with the limitations that are revealed in the bill now before us. Naturally we shall support the bill, but I had hoped that the small businessman would also be able to take advantage of the provisions in the bill in order to supply himself with adequate amounts of stock. Any of us who know anything about how a small businessman must operate know that one of his greatest handicaps in becoming competitive is his lack of capital to buy adequate amounts of stock at the appropriate times.
I have known ever so many occasions when a small businessman, had he the financial reserves, would have been able to lay in sufficient stock in order to make an additional 10 cents, or even up to 20 cents, on a pound of coffee. Why doesn't the government extend the provisions of this bill in order to acknowledge the fact that one of the major investments which a small businessman must make is for supplies and to secure stock?


Donald Methuen Fleming: On a point of order, we have had a great deal of straying in the course of the debate this afternoon and the Speaker, when he was in the chair, directed the attention of the house to what was the principle of the measure before it. We are not discussing the principle of the main legislation. We are discussing a bill which proposes to enlarge the purposes for which loans may be authorized under the main bill so as to include therein the relocation of business premises. That is the principle of the bill, and with the greatest respect I submit it does not afford any hon. member the opportunity to engage in a speech ranging all over the territory, as though he were debating the budget or something of that kind.
The hon. member has already dealt with the estimates of another department, and now he is proceeding to attack the principle of the main legislation. With respect I submit that is not before the house during this debate.


Erhart Regier: In reply to the point of order I would say the minister has been in this house for many more years than I, who have only been here nine years. He has been here more than nine years. We had a resolution preceding this bill in which the house was asked to approve in principle that the bill ought to be amended, but I would point out

that at the resolution stage the house is not officially aware of the contents of the bill that the government intends to introduce.


Donald Methuen Fleming: On a point of order, we are not debating any resolution. We are dealing with the second reading of the bill.


Erhart Regier: I would appeal to you on the point of order.


Mr. Deputy Speaker:: Would the hon. member state his reply to the point of order raised by the Minister of Finance?


Erhart Regier: My point of order is that it has always been the prerogative of an hon. member on second reading, having seen a bill, to express his disappointment at the government's failure to introduce a bill that would meet with the proposals that had been made to the government at the resolution stage. The minister is very thin skinned.


Donald Methuen Fleming: Evidently the hon. member is not aware that there was no resolution with respect to the present measure. None was required. The bill has been introduced and here it is. Apparently the hon. member is not aware at all of the procedure of the house in this regard.


Mr. Deputy Speaker:: I think it is well recognized that the discussion on second reading of an amending bill should be limited to the principle of the amendment, and it is not an occasion to review the principle of the main bill. I know the hon. member has been straying a bit from that principle, and I hope he will now confine his remarks.


Paul Joseph James Martin: On a point of order, I have been listening to what the Minister of Finance has to say and what the hon. member for Burnaby-Coquitlam has been saying. This is not the first time this point of order has been raised. During the past hour I have discussed this matter with officials at the table, looking at the rules and the citations. I appreciate that there is a difference of opinion as to what the rules provide. I would be content to accept the ruling of the Minister of Finance if in Beauchesne I could find any citation that says that at this stage of the discussion of a bill an hon. member is precluded from pointing out the inadequacy of the measure before the house.
I can find no such citation, but in fairness I think it is only right to point out that on another occasion last session this position was taken by the presiding officer of the house, although the ruling was not insisted on. However, I should like to have the citation shown to me which precludes the kind of discussion about which a complaint has been lodged by
Small Businesses Loans Act the Minister of Finance. Surely an hon. member is entitled to say that this bill is good so far as it goes, but that it is inadequate because it does not provide other possible remedies to assist the small business community.
If we look through the Hansard reports of this debate we shall find that the kind of argument made by the hon. gentleman was pursued by others on all sides of the house since the bill was first introduced in this chamber. I rise not to take issue with Your Honour, but for the purpose of seeking enlightenment, to have shown under what citation this particular ruling or this particular position of the Chair is taken.


Mr. Deputy Speaker:: This question has often been ruled upon in the house and I have here a number of rulings made by previous Speakers and the present Speaker, which are absolutely in accord with the point raised by the Minister of Finance, to the effect that the discussion on second reading must be limited to the amendment and not to the main bill. There is this citation:
The fundamental rule that debate must be relevant to a question necessarily involves the rule that every amendment must be relevant to the question on which the amendment is proposed_
And so on.


Paul Joseph James Martin: Could Your
Honour give us the date of that ruling, please?


Mr. Winch:: At the same time would you say whether the citation is on the details of the bill or the principle of the bill?


Mr. Deputy Speaker:: The citation I have just quoted is from May's sixteenth edition, page 451, and it also refers to Beauchesne's fourth edition, citation 203, paragraph 1. Speaker Macdonald on November 14, 1949- this is recorded at page 237 of the Journals- ruled:
On the second reading of an amending bill it is the principle of the amending bill and not the principle of the act to be amended which is the business under consideration. The discussion therefore must relate exclusively to the principle of the amending bill.
The present Speaker, on December 13, 1957, as reported at page 2314 of Hansard, gave a similar ruling, and also on May 6, 1959 at page 3402 of Hansard. There are a number of other precedents, to which I need not refer. I think if the hon. member will correlate his remarks to the purposes of the bill, that is the principle of the amendment, he will be in order. I think he will agree that it should be so, and I would ask him to observe this ruling.


Erhart Regier: Mr. Speaker, I wish to thank you for your very great consideration of
147$	HOUSE OF
Small Businesses Loans Act the problem raised by the Minister of Finance. I was not for a moment-and I hope he has not misunderstood me-attempting to argue the principle of the bill; I was speaking to the proposed amendment to the bill and I hope, in the light of the ruling you have just read to the house, I am able to remain in order.
However, I think you will agree with me, sir, that I ought to be given the privilege of replying to any arguments that have hitherto been put forward in this debate. The hon. member for Acadia mentioned that some $25 million had been loaned to small businessmen under the terms of this bill. I am not in any position to dispute the statistics. However, I should like to point out to the hon. member for Acadia that these loans have been made by the banks of Canada and not by the government of Canada. All the government of Canada has done, in effect, under the terms of the bill now before us is to guarantee to the banks that the major portion of these loans will be repaid, and the banks have been directed to collect the same interest rates that they would have collected if the bill had not been in existence.


An hon. Member:: You are all wet.


Erhart Regier: This comes back to my earlier contention, that when the people of Canada guarantee a loan it is only equitable that the terms of that loan should call for a slight concession, no matter how small. According to the Farm Improvement Loans Act the concession to the borrower is 1 per cent per annum. I feel that the guarantee of the people of Canada ought to be worth something; otherwise I see little need for this parliament to be occupying itself with what would appear to be the needless task of underwriting a possible loss.
The hon. member for Fort William mentioned that this was a test of the profit and loss system. I should like to contend that this is a test of service to our nation and to mankind and not a test of the profit and loss system, because if we analyse the profit and loss system as a system without the good will of the people of the nation, by the very existence of this legislation we are admitting its utter failure and its gross weaknesses.
I think a number of speakers have boasted of this legislation as aiding employment. They said there were so many millions of dollars spent in the past year in the expansion of private business as a result of this legislation and that therefore it made a valuable contribution in reducing unemployment in Canada. I should like to answer this argument in only a very brief statement; that


private business has sagged, and the very existence of this legislation is witness thereof, and that private business investments today have fallen to the point where they are unable to generate enough new private capital to be really influential to any major extent in relieving the problem of unemployment. Therefore the public resources are being asked to aid and abet in this matter.
While, as I said before, we are quite prepared to endorse the amendment to the act, we do contend that it is an admission of failure; that this government has failed to keep its promise to the Canadian electorate that it would do something effective to aid the cause of small business, and it is also not effective in that it does not begin to scratch the surface of the problems that are today facing the small businessman of Canada, the only real free enterpriser, who is being squeezed out of business because of the failure of the government to deal adequately with his problems and with corporate power as it now exists.


Mr.  C. W. Carier@Burin-Burgeo: Mr. Speaker, as all the businessmen in my riding are small businessmen I would be remiss in my duty as their representative if I did not take advantage of this opportunity to say a few words on this amendment, and in particular to point out their views and the experiences they have had with the main legislation.
Hon. members will recall that the original bill was introduced in November of 1960, and at that time it was put forward by the minister as a part of the program which the government was setting up to make a massive assault on our unemployment problem. It was certainly a very exciting piece of legislation to the small businessmen in my riding, because I received more inquiries about it than I have ever received about any other legislation that has gone through this house. In fact there were so many inquiries that it could almost be used as a sort of Gallup poll.
I took advantage of that opportunity to ask the people who wrote me for information on how to go about getting these loans to write back and let me know just what success they had in getting loans under this legislation. Of all the inquiries which I received, the legislation was only applicable to about 10 per cent of their problems, and to date I have received notice that only one person in my riding has obtained a loan under this legislation.
It seems to me that the principle of this amendment is essentially the same as the principle of the original bill. This amendment does not embody any change in principle;

it merely extends the means by which the principle may be applied. Since there is no change in principle we can take it for granted that it will receive the same unanimous support from all quarters of this house that was given to the original bill.
At that time, when the original bill was being debated, the opposition pointed out the defects in the legislation; and the figures which the minister put on record in Hansard on February 15 I believe confirmed the criticism which was made at that time, namely that the legislation was far too restrictive to have much impact upon the economy of the provinces as an aid to employment, or to be of great assistance to the small businessmen themselves. The minister told us that fewer than 3,000 loans had been made. He said the average loan was $8,600 and that the total of all the loans amounted to about $25,500,000, while the prospects indicated that the aggregate for the coming year might reach a total of $32 million. That is a far cry from the limit of $300 million envisaged in the main legislation.
This amendment would make it possible for small businessmen to secure loans for the construction or purchase of alternate premises should they have to vacate the premises they occupy, or when zoning operations make it impossible to expand, or where a business might fail if such a move were not made. It seems to me a pity that the government did not take advantage of this opportunity to go a little further and repair some of the other defects which have become apparent after this legislation has been in effect for a whole year. The fact that these loans are made by the banks and not by the government is in itself a handicap. I think the government should take note of the fact that in the Atlantic provinces there are about four banks-


Mr. Deputy Speaker:: Order. I think the hon. member is going beyond the amendment when he begins to discuss the means by which the purpose of the original bill is carried out, and I think he should return to the amendment before the house.


Mr. Carter:: On that point of order, these loans for the purchase or construction of new premises have to be made by the banks. What I am pointing out to the minister is that banking facilities in my province are not comparable to the facilities which exist in Canada as a whole. In fact I think it can be shown that about four banks make 80 per cent of all the loans made in the Atlantic provinces. We are having the same experience with regard to this legislation for small businessmen as we have in the case of the fishermen. For some reason or other it is
Small Businesses Loans Act very difficult for them to get loans, probably because those who require assistance are too far away from the banks to make personal contact or to provide the banks with all the information which is required.


Mr. Deputy Speaker:: I think the hon. member heard the ruling which was made a few minutes ago, a ruling to which the Speaker, when he was in the chair, also referred. I think it would greatly facilitate progress in this debate if the discussion were limited to the subject matter of the amendment.


Chesley William Carter: The point I was making is that when the original bill was before the house we called the attention of the minister to the fact that its terms were too restrictive. If any hon. member thinks that is funny let him look at the debate, and he will see that I pointed out to the minister then that the businessmen had four main needs. One of those needs was long term loans; another was a low rate of interest, and a third need was working capital. None of those needs were met by the original legislation, and none have been met by the amendment which we have before us now. In view of the importance of the small businessman in the economy of our country I think it is necessary that the minister give consideration to expanding the scope of this measure.
The small businessman is really the backbone of our economy. He is least likely to be affected by automation, and the employment afforded by small firms is likely to be more stable than that provided by larger firms. I would much prefer to have in my riding 50 small industries employing 20 persons each than one industry employing 1000 people, because in the latter case you have all your eggs in one basket.
This bill is a step in the right direction but it is only a very small step, and since it does not go anywhere near meeting the real needs of the businessman I ask the minister not to stop at this point but to carry on and extend this legislation, particularly so as to provide working capital. That is the main need of 90 per cent of the businessmen in my province. They cannot get it through the banks, and I think the government should make provision for it. I must remind the minister, too, that there is some doubt as to whether the banks are the best agencies for administering this legislation.


Mr. Deputy Speaker:: I am afraid the hon. member is now definitely straying from the amendment, which refers to the enlargement of the purposes for which a small businessman's loan can be made, and I want him to come back to that. If he cannot do so he will have to resume his seat.
1478	HOUSE OF
Small Businesses Loans Act


Mr. Marlin (Essex Easl):: Mr. Speaker, on that point of order, surely that is a very strict interpretation. If Your Honour will look at the explanatory notes of the bill you will see that the purpose of the bill is indicated. It is suggested that the government will accept the recommendation of a responsible officer of a bank in the making of a loan. Surely my hon. friend is not straying away from the subject matter of the measure when he argues that the bank is not, in his judgment, a proper vehicle for the purpose intended, that it should not be left to an official of the bank to have the power which this legislation gives to him. With respect I submit that Your Honour is straining the interpretation of our rules when he precludes my hon, friend from making an observation of that kind which, incidentally, is not the substance of his remarks but simply made in passing.


Mr. Deputy Speaker:: I do not mind the hon. member making a passing reference to these matters but I hope the bulk and substance of his argument will relate to the bill before the house. So far that has not been the case. I think all hon. members will agree that I have exercised as much leniency as is possible, and as much as I am disposed to exercise in order not to go beyond the rules.
The hon. member for Essex East a few moments ago asked me to refer to citations. The citations are very clear. The discussion, therefore, as it has been ruled, must relate exclusively to the principle of the amending bill. I am only asking the hon. member to conform to that ruling which has been followed throughout the years in this house.


Chesley William Carter: Mr. Speaker, I made the point that the principle of this amending bill is identical with that of the original legislation, namely to provide assistance to small business. This bill does not change the principle one bit, it only extends the means by which this assistance may be given.


John Whitney Pickersgill: Very inadequately.


Chesley William Carter: I am not going to labour the point, Mr. Speaker, if you wish to restrict my remarks, but I will remind the minister and my hon. friends opposite that this is not the kind of legislation we were promised by the Prime Minister to deal with the problems of small business. What he promised in 1957 was an agency somewhat similar to that which obtains in the United States.
Before I sit down I wish to ask the minister if he can give the house a breakdown by provinces of the $25.5 million in loans which have been granted to date. It seems to me legislation of this kind can


serve a double purpose. Not only can it be a stimulant to the economy but can also be used as a sort of balance wheel to our economy. If this is to be done it has to be applied on a regional rather than on a national basis. I should like to see just what pattern shows up, by provinces, in the loans that have already been granted.


John Whitney Pickersgill: Mr. Speaker, the hon. member for Essex South, with his usual respect for freedom of speech in this house-


Paul Joseph James Martin: Will the hon. member permit me to interrupt him before he castigates the hon. member for Essex South, who well deserves to be castigated? May I ask the hon. member for Bonavista-Twillin-gate to refrain from doing so at the moment because this is the hon. gentleman's birthday.


John Whitney Pickersgill: I would have thought that on this occasion the hon. gentleman might have acted his age. However, I congratulate him on the occasion of his birthday.


Mr. Lambert:: You should remind yourself of that every day of the year.


John Whitney Pickersgill: I also thank the hon. member for Edmonton West for his customary good wishes which I always appreciate at their true value. As I was saying-


Mr. Thrasher:: Perhaps the hon. member would allow me a moment in which to express my thanks to him and the hon. member for Essex East for their kind felicitations on this important day. I should like to point out, Mr. Speaker, that I have now reached a milestone in my life and I would like to think that I am now free to forget about future birthdays.


Paul Joseph James Martin: Well, you will have to do something with this government.


John Whitney Pickersgill: Unfortunately, I do not think the hon. member will likely have to forget about birthdays for a great many more years than would be so in my case or that of the hon. member for Essex East, and I hope when he reaches the age of the hon. member for Essex East he will have reached a similar degree of wisdom.


Donald Methuen Fleming: And be less senile than that hon. gentleman.


John Whitney Pickersgill: The Minister of Finance, as a great expert on the subject, talks about senility and I will not argue with him on that point.


Donald Methuen Fleming: Do not look at your deskmate when you say that.


Edmund Davie Fulton: The hon. gentleman is not prepared to argue about the senility of the hon. member for Essex East.


John Whitney Pickersgill: If I may be permitted to be relevant and to speak to the bill instead of about birthdays and senility, and without the uncalled for interruption of the Minister of Justice, I wish to make a few observations about the inadequacy of the principle on which this bill is based.
This bill, as my friend the hon. member for Burin-Burgeo so accurately pointed out a moment ago, has precisely the same principle as the original legislation. The principle of this bill, as I understand it, is that loans will be extended by the banks to small businesses and up to a certain amount will be guaranteed by the treasury of Canada. That is the principle of the bill.


Donald Methuen Fleming: No, no.


John Whitney Pickersgill: When the minister replies he can put me straight.


Donald Methuen Fleming: The hon gentleman needs it.


Edmund Davie Fulton: That will be impossible.


John Whitney Pickersgill: Meanwhile, I will outline what I consider to be the principle of this legislation. It is that the treasury is giving a limited sort of guarantee of loans made by the banks under certain circumstances to certain categories of small businesses. This legislation, when it was originally introduced with great fanfare in November 1960 was part of a huge program that was going to end the current recession of that time, the second recession under the present government. You will remember, sir, at the beginning of 1960 the Minister of Finance made that famous speech to the board of trade, or rather to the Canadian club and the Empire club in Toronto-


Paul Joseph James Martin: January 7.


John Whitney Pickersgill: I have to be very careful to give the name of the right organization or otherwise the minister will likely say it is a lie. That is a word he very frequently utters. It is almost impossible to speak six words in this house without having the minister rise and use that word.
At the Canadian club and the Empire club in Toronto in January 1960 the minister told us the recession the Conservatives claimed they inherited from the Liberals was all over and we had now entered into a period of great prosperity when he was going to balance the budget. You will remember that, sir.
And then in November 1960 the government changed its mind again, or the facts had forced it to change its tune. It brought
Small Businesses Loans Act in two or three measures including the one we are now being asked to amend. We gave strong support to this legislation at that time because we felt we should support any measure which would contribute to alleviating the slump and stagnation from which this country has been suffering most of the time since hon. gentlemen opposite have occupied the treasury benches.


Mr. Cardiff:: Utter trash.


John Whitney Pickersgill: We gave this legislation strong support and only one or two people on this side of the house spoke on the subject, but from the other side we had speaker after speaker getting up and making long speeches of congratulations of the minister at that time, which seemed to me to have nothing to do with the principle of the bill. The Chair at that time did not call those hon. gentlemen to order as they told us what a wonderful Minister of Finance we had and praised the splendid job he was doing.


Mr. Deputy Speaker:: Order. I have allowed the hon. member to engage in a lengthy preamble. I hope he has now reached the end of his preamble and will deal with the principle of the bill.


John Whitney Pickersgill: No, sir. I have not reached the end of my preamble in this free parliament. There are other points I wish to make in laying a foundation for the argument I wish to advance.
As I said, at that time hon. gentlemen opposite told us of the wonderful things that were going to be accomplished by this legislation. Well, nearly a year and a half ago the government brought in this legislation. Hon. gentlemen opposite decided it was such a big measure that they required a ceiling of $300 million on the loans and so far $25 million has been lent.
In the speech from the throne this year, with great fanfare, we were led to expect big additional changes in this legislation. What do we get? We get an amendment which says that if you move your business from the south side of Sparks street to the north side of Sparks street, or from the north side of Sparks street to the south side of Sparks street, you can borrow under this legislation; and that is all. That is all this amendment does, and yet this bill was announced in the speech from the throne, which gives you an idea how frantically the government was shaking old straw in an attempt to find something with which to create an impression on the public. That is not, of course, what was expected. It is to that point that I intend to address myself, namely that this legislation is not what we were led to expect, not what the country was led
1480	HOUSE OF
Small Businesses Loans Act to expect and not what even the officials, who themselves have the responsibility for administering it, led the country to expect.
I have here in my hand a sheet torn out of a magazine called the Canadian Grocer for October 21, 1961. There is here an account of a symposium of the retail merchants' association's Ontario food section on this very legislation we are now being asked to amend. I should just like to read one paragraph because it shows two things. It shows not only that this legislation is quite inadequate but that an official having to do with its administration recognized that the law was inadequate, that it ought to be changed and that he aroused expectations of change which have not been met in the legislation.


Mr, Clancy:: Read the whole thing.


John Whitney Pickersgill: The hon. member suggests that I read the whole thing. It would be very edifying to do so. However, I assume that the hon. gentleman can read. He has a great deal of leisure and I suggest that he read it himself. The paragraph I wish to read is as follows:
James A. Shields of the small loans branch kicked off by saying that experience had convinced members of his department that the ceiling of $250,000-
That is the ceiling on sales.
-was too low and it would probably be lifted. Personally, he felt that the ceiling should be removed entirely as it was difficult to decide a figure which would suit all types of small business. It was his own feeling that any businessman who felt he would like to borrow $25,000 could be considered a small business.
The minister will no doubt say that Mr. Shields is not an officer of his department, but is an officer of another department. We know from experience at Accra and about Accra that different ministers speak with different voices. Now there are officials who do so. However, there is no doubt that expectations were aroused by these reports. Anyone who cares to read the Financial Post for January 27 will see that the editors of the Financial Post, who in these days seem to be about the only people left in the journalistic world who view this government with any charity at all, were led to expect some real legislation, some real changes that would lift this legislation from the doldrums in which it has found itself, with only $25 million lent when they expected $300 million and, as one hon. member has pointed out, probably most of it would have been lent anyway whether or not the legislation had been there. As my friend the hon. member for Burin-Burgeo has said, this legislation is so different from what we were led to expect, is so different from what the public was led to expect and is in so many ways inadequate.


Donald Methuen Fleming: He did not say that.


John Whitney Pickersgill: We had expected that something really substantial would be done, something that would carry out some of those sweeping promises to small business that were made by the Prime Minister in his election campaign in 1957 and which I could put on the record-I have them here in my hand- if the rules of the house would allow it. However, I see you looking at me, Mr. Speaker. There seems to be distaste on the other side of the house for having any of these promises of the Prime Minister put on the record, even in the most attenuated form. Objection is taken even to having quotation marks put around them. As I say, what we were led to expect was that legislation would be put on the statute books which, like the farm improvement legislation and the other legislation such as the home improvement legislation, which was put on the statute books by another government in another period, would have much more substantial effects than this legislation is having. Surely what was expected was something like the measures that are being taken by the small businesses administration in the United States to which the Prime Minister referred when he made the promises on which this legislation evidently is based, or which this legislation is supposed or presumed to be fulfilling. When he replies I hope the minister will tell us whether the government has given any consideration to a much broader approach to this whole problem than the miserable approach that is made in this puny amendment to legislation which is not really accomplishing what everyone a year and a half ago had such high hopes it might accomplish.
In the United States, of course, many devices are being used for providing capital for small business. For example, there are small business investment companies.


Paul Joseph James Martin: There are 21 different projects.


John Whitney Pickersgill: My friend the hon. member for Essex East, who has made a real study of this matter, points out that there are 21 different projects.


An hon. Member:: You have not made a
study of it?


John Whitney Pickersgill: I do not pretend to be an authority on the whole field. However, I pretend to know something about what is going on in Canada. I also know something about the number of loans being made under this legislation in Canada. That information has been given very reluctantly by the government. I have this circular from the small business administration in October, 1961,

which suggests what I believe looks like a much more promising approach to this problem than is this legislation. It is for that reason, and for that reason only-that I consider this legislation so inadequate-that I venture to suggest to the minister that a more promising measure such as that to which I have referred might be considered. I mean promising in the sense of achieving results not in the electoral field but in the field of the growth of the economy. We know, of course, that many promises seem to be made and forgotten. But the kind of promise I am talking about is the promise of effective results in the development of small businesses. I think that only one conclusion can be drawn from the few facts that we have been able to elicit from the minister and the brutal fact of the small number of loans, namely that this measure is all right as far as it goes but that it does not go nearly far enough to meet the big problem which the Prime Minister, when he was not in the government, promised to do so much about in 1957.


John Ross Matheson: The hon.
member for Bonavista-Twillingate (Mr. Pickersgill) referred to some of the promises that were made in 1957 with respect to this group of citizens, namely the small businessman. In Brockville, on May 8, 1957, according to the Globe and Mail of May 9, we have this quotation:
The small businessman-manufacturer and independent retailer-has been all but forgotten by the federal government, the Tory chief charged . ..
Canada, Mr. Dlefenbaker's statement said, is a country of small businesses. Of the 37,400 manufacturing establishments in this country, more than 35,000 employ fewer than 100 persons.
There was also specific reference on that occasion and on the earlier occasion of the important opening campaign speech at Massey hall to the type of legislation under the United States program, where the definition of small business is flexible enough to permit aid to be extended to any firm which is small when judged within its own industry. We submit there should be further amendments and more real legislation at this time.
In the second quarter of 1961 the number of business failures resulted in liabilities of $27.7 million, 11 per cent above the same months in the same quarter of 1960. This was an all-time high. Nineteen per cent more firms failed in January, 1962, than in January, 1961, and in this regard I am referring to a news story found on page 22 of today's Globe and Mail.


Norman Platt Lambert: Why do you not give the
reasons for the failures?


John Ross Matheson: In answer to the hon. member for Edmonton West I will give the reasons
Small Businesses Loans Act for the failures. The Financial Post says that the reasons are primarily three: First, a general slowdown in business. This we cannot deny. The second reason is the high cost of borrowing. This goes back to the reconversion loan and the manipulations that have been going on fairly generally since then as a result of which there has been a buildup of the average cost of interest on all debts from 2.98 per cent prevailing in 1956 to a figure we cannot accurately judge at the present time.


Donald Methuen Fleming: On a point of order, Mr. Speaker, this must be the dozenth time the debate has been out of order and surely we can have some serious attempt made to confine the debate within the proper rules. It has been straying all afternoon. The hon. member is now talking about interest rates in general, about the conversion loan of 1958 and everything else except the principle of the bill. The principle is very simple, whether the permissible purposes for which loans may be guaranteed under the act shall be extended to include removal and relocation of businesses.


Paul Joseph James Martin: Mr. Speaker, may I say word?


Mr. Speaker:: It is not necessary. I cannot accept the objection. It seems to me that hon. member is relating his argument to borrowing by small businesses, which has to do with the provision that is being amended. I would not want to restrict him as long as he does not get into the whole policy of reconversion and so on. It is obvious that would not be in order, but when his remarks are related to borrowings by small businesses it seems to me he is on the point.


John Ross Matheson: Mr. Speaker, I was endeavouring to reply briefly and succinctly to the hon. member for Edmonton West. I mentioned that, according to the Financial Post, the second most important item was the high cost of borrowing. This added cost is surely one of the main reasons why there has been an increase in business failures. The third reason put forward by the Financial Post is the obvious scarcity of mortgage money.
May I say it would appear that within the last four or five years we have entered into a new period of debt morality, and this has to be taken into account when we are considering the legislation before the house today. So far as the debts of the government are concerned, it is clear there is no earnest attempt to balance the budget. In other words, obviously we have entered into a new phase so far as the problem of meeting the costs of government is concerned. Our biggest business, Canadian National Railways, has a

Small Businesses Loans Act record deficit, and we do not try to balance the budget in this particular field. We do not try to balance the unemployment insurance fund. The financial position of T.C.A. and our exchange fund are two other areas where we could draw comparisons.
These policies pursued by the government are beyond our understanding. All we can do is to testify that we have witnessed all these things. Why these things are so, I do not know, but certainly this new debt morality in Canada is one of the factors that profoundly affects small businesses which have to borrow, which either have to pay or get out of business. It is as simple as that, and the manner in which the government has pursued its fiscal and monetary policies has had an important bearing on the way small businesses can operate. If our big government undertakings, our railway system, our air line system and so on, are to be permitted to go substantially into debt, I think it is only reasonable to say that the ground root strength of our economy the merchant and small businessman, has got to be supplied with a little more food and water than is contained in this niggardly amendment which certainly will prove a disappointment to a great many people.


[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.
Paul Joseph James Martin: Mr. Chairman, may I ask the minister whether he has had an opportunity to examine the program that the United States has adopted for its small businesses? When the hon. member for Bonavista-Twillingate was speaking he pointed out the program of assistance under the small business administration in the United States. He said there were 21 different projects which the small business administration of the United States had established to assist small businesses. That is the kind of program, as he pointed out, that the Prime Minister assured the Canadian people he would implement in 1958.
All this is reported in the United States government organization manual for 1960-61. Has the minister had an opportunity to read this report? Can the minister explain to the committee why the government has not accepted this kind of program, particularly in the light of the promise made by the Prime Minister? The minister sits there in solid comfort at the moment and I have a great suspicion-


Donald Methuen Fleming: I enjoy no comfort at all, listening to this.


Paul Joseph James Martin: -that he is not aware of what the United States is doing and perhaps not even aware of what the Prime Minister promised.


Donald Methuen Fleming: Keep on going. You are serving your purpose. It is five o'clock.


Peter Francis Martin: As it is five o'clock I will continue later.


Donald Methuen Fleming: You have served your purpose.


Paul Raymond Martineau: As it is five o'clock it is my duty to leave the chair in order that the house may proceed to the consideration of private members' business pursuant to section 3 of standing order 15.
Clause 1 stands.
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, namely, notices of motions.



CANADIAN BROADCASTING CORPORATION


Mr. Frank Howard (Skeena) moved:: That, in the opinion of this house, immediate steps should be taken by the Canadian Broadcasting Corporation either directly or indirectly to provide television to those areas and communities in Canada which are presently denied the enjoyment of such services and facilities.
He said: Mr. Speaker, you have just read the proposed resolution, which I am sure will become a resolution in fact if it is voted upon this afternoon. You will note that it is worded in such a way as to be all-inclusive of areas in Canada which do not now have television facilities and services. Even though the riding of Skeena covers practically one third of the province of British Columbia, the people of that riding have no television whatsoever, and I know there are other regions of British Columbia in the same position. The hon. member for Kootenay West (Mr. Her-ridge) told me a moment ago that he too is interested in this matter for the same reason, and the hon. member for Timiskaming (Mr. Peters) also has areas within his constituency that do not enjoy this modern medium of communication.
I raised a similar subject matter in the first session of this parliament immediately after the general election of 1958. In fact it was on June 3, 1958, that I raised the matter by way of grievance following a supply motion. That, of course, did not allow for any vote being taken as to whether or not it was

desirous for the house to give an expression of its opinion. The motion today asks parliament to express an opinion in a formal manner to the effect that steps should be taken to extend television coverage to all areas and communities which are now denied such facilities.
In Skeena we have an estimated population of some 60,000 to 70,000 people and, if allowed, I shall place on the record figures from the 1958 voters lists to indicate the number of registered voters in some of the major communities. Perhaps it would give an indication to the house of what is involved population wise. In my own community of Terrace we had some 2,000 registered voters in 1958; in the Smithers-Telkwa area there were some 1,500 registered voters. In Burns Lake, and in the areas surrounding it, we had another 2,000 voters. The city of Prince Rupert itself, without taking into account the outlying communities, had some 6,000 people on the voters list. In Kitimat there were about 4,300 and in Ocean Falls aproximately 1,400. All these communities have a number of other small communities surrounding them and they are likewise concerned and interested in this particular question. It is almost a perpetual problem and perpetual conflict between those areas which are heavily populated and those which are less heavily populated.
It seems that no matter what type of service is involved, be it highways, daily newspapers, radio or television, the larger populated areas receive them first. For instance, the lower mainland of British Columbia which includes Vancouver, Burnaby and Victoria, is a small area geographically but it contains approximately one half of the population of the entire province, and it is the area which is given prior consideration in any of these matters. In fact this is almost traditional now, and for that reason I believe that a public body such as the C.B.C. should give extra consideration to the outlying areas, the smaller communities and less populated sections of the country. I believe that public agencies such as the C.B.C. should even bend over backwards to ensure that greater consideration is given to providing such services as television in order to balance the scale between the urban and the rural communities.
As a medium of communication television has been in existence for quite a number of years, but as I said earlier we in Skeena do not as yet have the benefit of it. We hope that things will change shortly. As I say, television is considered to be a great means of communication. It has great cultural advantages; and it has great entertainment value. It is true that it also has certain defects and drawbacks, but nothing is either pure black
Request for Extended T.V. Coverage or pure white. Everything that is good contains a little bad, and vice versa.
We do not believe that merely because we do not have a city with a population of 50,000, 75,000 or 100,000 we should be denied services which many people in this nation receive. The needs and the desires of the people in Skeena are just as great as those of the people in Vancouver. I hope the motion before us will be given the due consideration necessary and will receive unanimous passage in the house in order that those who live in the northern parts of the country will understand that parliament itself has concern for our desires and needs.


Mr. S. J. Korchinski (Mackenzie):: It is not
very often I agree with the hon. member for Skeena, but on this very point I am in general agreement with the idea he has expressed. My area is very much similar to that which he represents in that it is a big constituency and extends for many miles into the far northern regions.
The idea of a national broadcasting system is one in which the whole nation should participate, but I believe we should realize some of the difficulties in providing television to all areas. Even the royal commission, when it made its study, had this to say:
However much we regret it, there will probably be more than one and a half million Canadians who will have to rely for their broadcasting service on radio and will not in the foreseeable future be brought within reach of Canadian television.
It goes on to say:
We do regret it because the value of television in terms of information, entertainment and identification with the rest of the country is greater for people living in remote areas than it is for Canadians in the settled parts of the country.
I think we can safely say that even today, after having radio service for a good many years, some 2 per cent of the people in Canada do not receive broadcasts from Canadian radio stations. Indeed some of the people who live in the far north will tell you they get Russian broadcasts more easily.
Even though television is a relatively new service in Canada we are rapidly approaching the point when 95 per cent of our people will receive it, but from there on I believe it will be a matter of dollars and cents. In my area during the last few years the government has been trying to work as fast as it possibly can in order to provide that service which the hon. member for Skeena says he needs in his area, and which is needed in many other northern parts of the country.
Only a few years ago there was but a fringe service in the southern portion of my constituency. Considering that my constituency runs about 600 miles north and the
1484	HOUSE OF
Request for Extended T.V. Coverage fringe reception covers perhaps only 30 miles of the lower portion, one can well understand that it does not serve many people. However, there have been extensions in the last few years. There has been the extension into Baldy Mountain in Manitoba, which has helped many of the people in the southern area and there has also been a steady expansion by the C.B.C. and private stations in the last few years.
Indeed some of the private stations found they could possibly go into the more northern areas of the constituency. As a matter of fact a few years ago the C.B.C. had made application and was prepared to provide service into that area, but because the privately owned stations were willing to do it themselves the C.B.C. withdrew in favour of the privately owned stations, in order that it could conserve funds for areas that privately owned stations could not serve.
I know it is an expensive proposition when one goes into these sparsely populated areas. It is so expensive that for example in the areas around The Pas, which is outside my area, and Flin Flon, which also serves my area, the C.B.C. could not see fit to provide direct transmission because funds were unavailable. In areas such as these you often find that kinerecordings, although perhaps not the best, are accepted.
I can cite examples in my area where within only 20 miles of a signal a community of perhaps 1,000 people will have to go without service until such time as more funds are provided. I think the essence of the whole problem is, where do you gets the funds?
The royal commission reported that in the future there will be demands from areas for two stations. I think this is one factor that should be considered, that before any areas are serviced with two or three stations- many of our residents are serviced to some degree by United States stations, and although this is not the best thing it is not a point of argument-we should service those areas which are without television facilities at the moment. There will be demands in the future from areas which feel that two or three stations can operate quite well and quite profitably, and there will also be demands in the future for an extension of time from those areas which have enjoyed television over the years. This is going to be a factor which will cost money. If there is going to be an extension of time, this will mean that some other areas not now serviced will have to do without television for a longer period. There is also the possibility that the near future will see the advent of colour television.
These are factors at which we must look very carefully, and before we provide these additional services to those areas which are


presently serviced and have been serviced for a good many years we should be very careful about what our policy is going to be and we should be sure that areas that are not serviced do receive some form of television entertainment.
I have taken a few figures from the Fowler commission report and I would just quote three years for which that commission forecast net operating expenditures in this field. They expected that in 1958 the net operating expenditures for radio and television would be approximately $44 million; for 1959, $50 million and for 1960, $55 million. However, the government's estimates for those years were $51 million, $58 million and $62 million. They estimated the capital cost to be $10 million in 1958, $14 million in 1959 and $13 million in 1960. However the government's estimates for those years were $8 million, $9 million and $7 million.
In other words, what I am trying to point out here is that as a result of added operating costs, capital costs have been sacrificed. I think one should look at the operations of the C.B.C. and see that some of the capital expenditures are not sacrificed because of added operating costs. In general I would say that the people of my area want me to support this resolution.


Mr. H. M. Batten (Humber-St. George's):: Mr. Speaker, I think this resolution will affect a great many people across this country. Because of this I hope that within the short time allotted to its discussion we will be able to come to some decision.
I have before me very detailed information concerning quite a few places in Newfoundland. I am not going to take the time of the house by putting it on the record now, because as I said before I hope that before the hour has expired we will be able to come to some decision. I do feel, however, that since television is in large measure a public service, people living in smaller areas have the same right to expect television service, within reason, as those who live in the more thickly populated areas. I am sure that across this country there are many places that are now not served by television and yet within these areas reside a large percentage of the population of Canada.
I bring to the attention of the house the example of the town of Deer Lake in my own province of Newfoundland. Deer Lake and the surrounding territory has a population of 10,000 people. It is only 30 miles from the larger city of Corner Brook. Corner Brook is a city serviced by television, and yet 30 miles away a town with a population of 10,000 people is not able to receive this public service.

On a number of occasions I have brought to the attention of the house the question of television coverage for Deer Lake. There have been numerous pieces of correspondence on this matter, but so far the service has not been provided for this town. I hope that if this resolution is passed consideration will be given to the justifiable demands which are being made by the people of this important town on the west coast of Newfoundland.
I also bring to the attention of the house a television station which is now being operated at Stephenville, Newfoundland. The station itself and the equipment is owned by the United States forces at Harmon Field, while the station is operated by the Canadian Broadcasting Corporation. Three or four years ago this station was able to serve all the people who were then receiving electric power. Within the last two or three years great strides have been made in this area in extending electric power to many more settlements, and the station at Stephenville is now not able to service all the homes capable of receiving television if such a service were provided. I would hope the time will not be too distant when the station at Stephenville will be either enlarged or relocated so that the service the station provides will have greater coverage than it has today.
In the southern part of what is known in Newfoundland as the Ste Barbe district there is a fairly densely populated area known as Bonne Bay. These people, too, have no television service. I would hope that within a very short time these people will also be able to receive the benefits which come from television broadcasting.
My hon. friend from Grand Falls-White Bay-Labrador, who is not in the house today because weather conditions have prevented him from returning to Ottawa, has given me a message asking me to state his case for Labrador. In Labrador at the moment there is only one television station, and it is at Goose Bay. Certainly, in this great area other stations are necessary so that service may be provided to all the people concerned.
My hon. friend from Burin-Burgeo, who realizes that in this debate not many people are going to have an opportunity to speak, has asked me to refer to the number of occasions on which he himself has called attention to the need for television coverage of Port aux Basques, Grand Bank and the south coast of Newfoundland. There are in Newfoundland today many places which might well enjoy the advantages which come from television broadcasting and I hope that if this resolution receives the approval of the house these benefits will be brought to the people living in the areas I have mentioned.
Request for Extended T.V. Coverage


Mr. M. L. McFarlane (Kootenay East):: First, I would like to take this opportunity to congratulate the mover of this resolution. I feel it should be allowed to go through. This is something to which a great many people in my own district have looked forward for a number of years.
Before entering upon my talk on this matter I should like to congratulate the Canadian Broadcasting Corporation upon the installation of radio stations in the Lake Windermere valley in my area. The residents of this area have been endeavouring over a ten year period to get C.B.C. station programs, programs produced in Canada. Until the installation of the booster last year they were unable to get C.B.C. programs of any kind. This installation was the culmination of many years of effort by boards of trade, chamber of commerce and many other organizations and individuals in the valley. It is fortunate that this government took action at least to provide radio reception, late as it was. It would certainly never have been installed under the previous administration. However, during the period in which the local people in the area were endeavouring to obtain radio reception, television entered the picture. I should also like to mention that at the present time we have a television satellite in the area which will serve a great number of people. We do not know at the present time how many people this will serve, but we feel the coverage will be fairly extensive. However, due to the rocky terrain of the Rocky mountain area in which I live, complete coverage has become impossible with our present facilities.
During the past few months I have been endeavouring to review the work of the C.B.C. and also to study the numerous applications for television services in Canada which have been granted. I find that preference is being given to the larger centres while the rural areas are not getting the consideration that they should be getting. In these days television is not a luxury; it is essential to our way of life, and I suggest that immediate consideration should be given by the minister to the expansion of this television service. A large number of departments and members of parliament have been in receipt of briefs from rural constituencies all over Canada requesting the installation of television satellites to make it possible for people to receive programs without the necessity of installing expensive equipment such as wiring, and having the programs piped in.
I should like to call the attention of the minister to the fact that the installation of television facilities for the larger centres is paid for out of public funds and that the
I486	HOUSE OF
Request for Extended T.V. Coverage rural taxpayer contributes heavily to these funds. Therefore, I strongly recommend that before any more applications from the urban centres of Canada are approved, consideration should be given to the installation of television programming for the rural areas. My own area of East Kootenay, as I mentioned, is situated in the heart of the Rocky mountains where television and radio reception is unpredictable. Some of our towns are situated in the valleys and others on the sides of the mountains. A few areas are still without these services. Lake Windermere and the Golden area in the upper end of my constituency have been endeavouring for a number of years to obtain this type of service. In the Fernie area we are fortunate, in one or two cases, to be able to receive programs from the United States, but I think we should develop the distribution of Canadian programs of particular concern and interest to our people. The rural areas are suffering badly from their lack of ability to receive Canadian television.


Herbert Wilfred Herridge: I am
delighted to rise and support this resolution which has been moved by the handsome, capable and industrious member for Skeena (Mr. Howard). Before proceeding I want to compliment the hon. member for Kootenay East (Mr. McFarlane) for his completely non-partisan approach to this question and his willingness to support a resolution, moved by a member of this group, which has application all across Canada.
Before going further, I wish to bring to the attention of the house the excellent work that has been done by the hon. member for Port Arthur (Mr. Fisher) on the radio broadcasting committee with particular reference to this problem and its application across Canada. No one can accuse the hon. member for Port Arthur of being parochial in his approach. I say he has a universal approach to this question and, on occasions, almost a cosmic point of view.
This is a serious problem to numbers of small towns in my constituency. For a number of years I have been urging the government to give effect, through the C.B.C., to what is the spirit and purpose of this motion. Although our larger areas are now served by the C.B.C., including the city of Trail, Rossland and adjacent areas, besides Nelson and the surrounding areas, there are still a number of small communities which are denied the opportunity of receiving C.B.C. programs-the news, music, theatre, ballet and all the other interesting television fare provided by the C.B.C. Because the larger centres now have the opportunity to enjoy


these programs, there is naturally an increasing demand by these other communities for service. We have an area on the west arm of the Kootenay lake which includes Balfour, Procter, Ainsworth, Kaslo and intermediate points which is not served. We have Boswell, Gray Creek, Crawford Bay, Lardeau and Riondel. We have an area around Castiegar, Edgewood, and a considerable area around Slocan city. Residents of these communities and organizations in these centres have written to me consistently in the last two or three years urging consideration of their needs in this respect. To give the house an indication of the type of letters which have come to me, I should like to put on record a letter I have received from Mr. Cyril F. Fitchett who has been very active in travelling around the mountains with officials of the C.B.C., so that when the officials come in to make surveys there need be no unnecessary amount of travelling on their part. I will read what his letter has to say.
Under date of December 22, 1961 he writes as follows:
Dear Sir,
I wish to make a request regarding t.v. reception in this area.
I would appreciate anything you could do to bring C.B.C. television to this district. Unfortunately we are unable to receive any signal from C.B.C. or U.S.A. outlets. I feel we are missing an important part of Canadian life with regard to education, sports, world affairs and drama, in which my wife is particularly interested. She has had, on several occasions, notices mailed to her from C.B.C. t.v. announcing forthcoming drama events and in order to view them we have to drive 20 miles to Nelson, our nearest centre, and impose upon friends. I believe a repeater station is being installed in the Cranbrook area this coming year. Would it be possible to have something similar to serve the people of the Kootenays?
The newly installed radio repeater station at Procter is a great improvement to our reception and I wish to thank you for your help in this regard and for any help you may be able to give us with t.v. service.
Wishing you and your family a happy new year,-
-and so on.
I mention that because it indicates the interest in the C.B.C. and the desire to obtain service. What this gentleman says is repeated in dozens of letters from people who appreciate the low power relay transmitter station for radio which was recently installed and would now like to receive C.B.C. service.
I have taken up this matter with the minister and discussed it with him on a number of occasions. He has been very sympathetic to the problem. We understand from the present debate that it is not a local problem. There are numerous areas in Canada which wish to receive a similar service. I discussed it with the vice president of the C.B.C. and I have written him about it. I have also discussed it with regional officers of the corporation in

Vancouver, with engineers and technicians who have a thorough understanding of the district. All have expressed sympathy with the circumstances that exist and are anxious to do what they can. To that end surveys have been made as to the population, where the repeater stations could be installed, what the approximate cost would be, and so on.
In that connection I wish to quote from a letter I recently received from Captain W. E. S. Briggs dealing with the policy of the corporation which will facilitate the dissemination of the information. Under date of February 13, 1962 he writes:
Dear Mr. Herridge:
This is in reply to your letter of January 30th, 1962, concerning television service for the electoral district of Kootenay West. I believe that a statement of the policies and regulations governing the corporation's program of extending its television coverage would be of assistance to you.
And it has been.
In carrying out its program of extending television coverage, the corporation has made a survey of all unserved areas In Canada. The policy presently in effect dictates that service will be provided on a priority basis to areas where the greatest number of people can be served at the lowest possible cost. The corporation believes that this policy allows the most economical and equitable use of the public funds involved.
A continuing review of all unserved areas is maintained and the priority lists are adjusted from time to time as new information becomes available. As a result of new information provided by the 1961 d.b.s. census figures, a major review is under way of all the unserved areas in Canada.
In regard to the Kootenay West district, you are aware that the corporation presently owns and operates low power radio transmitters at five locations within the district, at Kaslo, Procter, New Denver, Castlegar and Slocan, which provide the C.B.C. national radio network service to these areas. As part of our continuing coverage expansion, an application for another L.P.R.T. in the Kootenay West electoral district, has been filed with the Department of Transport, to provide service for the community of Nakusp.
In case hon. members do not realize it let me say that is my home village. I notice that the Minister of Justice is listening with much interest. I continue:
The C.B.C. national television service is presently being provided for your district by means of C.B.C. owned and operated television stations at Traii and Nelson. Investigations into the possibility of extending this service to other areas in the district, such as Procter and Balfour, have been conducted by our engineers. At the present time, the area of Castlegar is receiving further detailed engineering investigation and preliminary reports appear encouraging for development of a C.B.C. television station for this community.
The corporation has carefully studied the question of monetary participation with private groups in the development of radio and television stations and has concluded that such a policy could not be successfully adopted.
I might say that the community of the Arrow lakes collected money through the
Request for Extended T.V. Coverage community television society, installed equipment on Saddle mountain and is able to receive C.B.C. television service from Kelowna. Several thousand dollars was collected. This was the result of local effort. Other communities cannot do that because the expenditure is larger and the equipment required more intricate and expensive.
As far as regulations are concerned, I am sure you are conversant with the procedure adhered to by the corporation in establishing broadcasting stations. After preliminary investigation of a particular project, the project must receive approval from the C.B.C. board of directors. Following this, detailed engineering studies are conducted and an application submitted to the Department of Transport. The application would then be forwarded to the board of broadcast governors and heard at a public meeting. If recommendation for approval was forthcoming from the B.B.G., it would go forward to the governor in council, who in turn, assuming approval, would issue an order in council to the Minister of Transport for authorization of the station. Only after receiving authority from the minister to establish a station, can the corporation make any commitments for the provision of network service or the purchase of land or equipment. If the equipment to be provided is in excess of $100,000, an additional order in council would be required.
Very frequently, delays of six to 18 months are encountered in the delivery of network service. Because of the corporation's policy to "buy Canadian" whenever possible, and because the specialized equipment required generally has to be especially fabricated, a delivery schedule of nine to 11 months is usually experienced.
In connection with the possibility of providing television service to the Arrow lakes region, the outlook at present does not appear encouraging. Because of the relatively small concentration of population within any one particular service area the very rugged terrain and the estimated high cost of network service, the corporation does not presently have any immediate plans to provide television service to this area.
However, as the national service expands and technical advances are made on equipment particularly suited for small coverage areas, the possibility of bringing service to areas such as the Arrow lakes region offer some promise for the future.
I trust that this somewhat detailed description of the policies and regulations governing the corporation s program of extending television coverage, will be of some assistance to you in clarifying inquiries which may arise.
I quoted that rather lengthy letter because I thought it would be of interest to many people including some hon. members who are taking part in this debate to have an understanding of the procedures of the C.B.C. and the difficulties and regulations with respect to "buy Canadian" and so on.
I am pleased to say that since receiving the letter I have heard that the situation is being reviewed in these areas to determine whether there is some way of providing service at a lower cost than was first estimated. I appreciate the attention of the officials to the problem that confronts the people I represent.

Request for Extended T.V. Coverage
I represent a large productive riding the chief industries of which are mining, lumbering and to a lesser extent agriculture. That means that this government or any government receives considerable revenues in the form of taxation. I believe these people are entitled to receive every consideration particularly since they live in isolated places and are producing the raw materials required to maintain our export markets. All these people are anxious to enjoy Canadian news and Canadian programs in general, including music and drama.
In concluding my brief remarks, therefore, I wish to support all other hon. members who have participated in this interesting debate and urge that every consideration be given by this government to the requirements of the persons who live in the outlying districts and small communities. They should be treated as fairly as those who live in the larger centres.
I know another hon. gentleman behind me is very restless and wishes to participate in the debate, so at this point I will conclude my remarks.


Edmund Davie Fulton: Mr. Speaker, I should like with the consent of the house, to intervene in the debate for just a few minutes. I do so because several hon. members who have spoken come from the province of British Columbia. I refer to the hon. member for Kootenay West (Mr. Her-ridge) who has just taken his seat, the hon. member for Kootenay East (Mr. McFarlane) and the hon. member for Skeena (Mr. Howard). I recognize the interest of members from the interior portion of British Columbia especially in a resolution such as this one which urges that the Canadian Broadcasting Corporation should provide greater television facilities to those areas and communities in Canada which are now denied the enjoyment of such services and facilities.
It was indeed in recognition of the fact that there is a lack of television and radio service in the less heavily settled areas of my province, just as is the case in Canada generally, that it was my pleasure shortly after this government took office and after the Broadcasting Act had been amended, to recommend that there be appointed to the board of directors of the Canadian Broadcasting Corporation, a person from the interior area of British Columbia.
I should like to pay tribute to Mrs. R. L. Carter of Salmon Arm for the work she has done as a director of the C.B.C. in successfully urging upon the corporation as a director a considerable number of extensions of services. Indeed, I was discussing with her here in Ottawa recently, on the occasion of the

last meeting of the C.B.C. board of directors, just what was the situation in British Columbia. She gave me some particulars which I regret I have not here with me. She assured me that in the matter of extension of C.B.C. facilities, our province of British Columbia is certainly on an equal footing with if not ahead of any other province in Canada.
I am speaking of the situation over the past four years. I observe my friend the hon. member for Kootenay West nodding agreement.
I know that other members from British Columbia would agree with me that we have been well served in recent years in connection with the extention of facilities. While saying that, however, I recognize the fact that there is still a need to be filled.
I assure my hon. friends and the house that the British Columbia representative on the board of directors of the C.B.C. also recognizes that fact. I can assure at least those members from British Columbia that, in addition to myself, our provincial representative on the board of directors will note with great interest what has been said here as the genuine need for extended services. I shall be glad to make sure that it comes to her attention. I am certain that in it she will find further support for her continuing efforts to persuade her fellow directors of the C.B.C. to meet the very real needs especially of those portions of our province outside of the lower mainland area.


Mr. J. A. Habel (Cochrane):: I do not wish to take much time of the house as I hope that a vote can be taken on this motion. Part of the riding which I have the honour to represent in this house is well served by the Timmins station. On the other hand, we have very little French programming. Owing to the fact that the microwave system covers the entire riding from east to west, it is felt-and I think it is only fair to do so- that it should be possible, at rather fair cost, to have installed at two different points satellites which would not only serve the communities along the first trans-Canada highway, namely No. 11-we like to boast about it because it was the first trans-Canada highway ever opened-but also the lumber camps which operate nearly the year around. It would also provide French programming through the C.B.C. French network which, after all, would serve a fairly sizeable part of the population of the riding I represent. I understand that the Ontario Northland Railway have in mind the installation of the microwave system from North Bay to Mooso-nee, or the extension of it right on to Moosonee. There also it would be an improvement for those people in that far distant area to be served by television as well.

I hope that this motion will be considered and voted on before six o'clock.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, this debate permits me to raise briefly a problem which has been touched on by other hon. members. It relates to satellite or translator stations in areas which are not properly served by any television station. The problem is pointed up by two areas in my riding, one of which is at Parry Sound town. There the situation was corrected because there was a sufficiently large population to permit a private operator to come in and set up a translator or satellite system economically, to the point where he could justify additional advertising charges by the additional number of homes he could reach. Therefore, in this particular case a private station operator was able to come in and economically instal at his own expense a satellite station for the benefit of the local people.
There is another area which is not quite so fortunate. I refer to Huntsville which is situated on the fringe of at least three stations, none of which gives proper service to a large portion of the area. The problem I wish to mention is this. The private stations can afford to set up a satellite only if they economically can raise their advertising rates to national and international advertisers. If they are trying to give service to a sparsely settled community with perhaps a large area, they hesitate to set up any kind of translator or satellite station because it is not worth their while to do so. If it were a C.B.C. station, the C.B.C. could set up such a satellite, as apparently economic operation is not a primary factor and certainly that is the situation in many locations-but where the primary factor is merely that of providing service to local residents. I believe that some assistance should be given to private television stations in setting up such a satellite. If the private station makes a survey and finds that it cannot do this economically, I think the people who are served by a private station should not suffer because they do not happen to be served by a C.B.C. station. In such a case I think that revenue should not be the prime factor. This is the case in Huntsville where there is no C.B.C. station from which a signal could be received and magnified. The people there have only private stations and none of those at the moment has indicated that it is prepared to go ahead with a satellite.
We are very hopeful that the Barrie station, which is looking into the matter, will eventually do so. However, this did point up one basic difficulty. If a private station has a particular area under its wing it must put in a satellite on an economic basis. On the
Request for Extended T.V. Coverage other hand, if the C.B.C. has an area under its wing it can set up a satellite station at the public expense. Therefore I believe that in such situations some assistance to the private stations should be considered.


Douglas Mason Fisher: Mr. Speaker, I know that the hon. member for Churchill (Mr. Simpson) wants to make a few remarks so I will put what I wish to say in brief form. I was very puzzled by the remarks of the Minister of Justice (Mr. Fulton) in this debate. The gist of them seemed to be that if the lady from Salmon Arm who is on the C.B.C. board of directors is made cognizant of the situation we may get some better development for the future. There is nothing wrong with this, but it would seem to me that it overlooks the part played by a number of members of parliament of all parties, not the least of whom are the hon. member for Churchill and the hon. member for Iles-de-la-Madeleine (Mr. Keays), in bringing personally to the Canadian Broadcasting Corporation and its senior executives what the problem is.
As I see it, Mr. Speaker, the plain fact of the matter is that we will get an extension of television into the areas about which all of us have been talking when and if funds are earmarked specifically for this purpose and when the whole concept of per capita and per household is put aside for a planned development over five years, let us say, that will attempt to bring television coverage to all those places that are without it. Frankly, the argument of per capita and per household makes very little sense to the people who do not have television. All they know is that they are taxpayers and that extensions are being made in other parts of the country.
This government took the initiative in allowing private television to develop, and in that regard I simply say that we know and recognize that private television will have no part in providing television to those sectors of the country that are asking for it because there is no money in it for them. The Canadian Broadcasting Corporation has to do the job, in the main, of bringing television to such areas except in the odd, very rare situation where a private station might be closer to an area that is not served. Given this kind of situation, the decision has to be made by the Canadian Broadcasting Corporation as to the amount of money that is going to be spent. Quite obviously the corporation will not extend their budget to the degree that hon. members are talking about and would like because the corporation feels that it is too expensive. I suggest that it is the government's role, and this is not interference for after all the treasury board

Request for Extended T.V. Coverage does go over the C.B.C.'s estimates-earmark specifically an increasing amount of funds to do the job that all of us here recognize needs to be done.
Finally, Mr. Speaker, I cannot help saying that I find it regrettable, and I think other members do also who have this problem of communities without television, that in most parts of Canada television is considered to be a much greater need and more desirable than even welfare legislation, government action with regard to unemployment or government action in developing an area in an economic way. It is rather sad that Canadians as a whole give television that high a rating. But these are the facts of the situation and they constitute one of the reasons why I, along with other members who have big hinterland areas to look after with populations scattered in small nodal points, very much wish and hope that the government will support this resolution and do so to the extent of providing more funds to the Canadian Broadcasting Corporation specifically earmarked to extend coverage without this formula business that can drag on and on for years, and under which those of us who are outside the corporation have no real understanding and comprehension when our areas are going to get television.


Mr. W. C. Henderson (Cariboo):: Mr. Speaker, I have a big town in a big district that needs television. There is television all around there but this town does not have it. There is television at the minister's town, Kamloops, and also at Williams Lake, Prince George, Barkerville, which is a suburb, and Wells. I had a letter yesterday from the mayor of Quesnel. These people have been beaten off in their efforts and there has been interference by different parties. The people there want television. They can get it for $12,000 by means of a satellite station but they do not think they should. I have an appointment with Dr. Stewart of the board of broadcast governors to put the claim of these people before him.
Quesnel is one of the oldest towns in British Columbia. It was in existence in the Cariboo in the gold days and it contributed piles of wealth to the government. Therefore I think the people there are entitled to television. There is no reason why they should not have it. They think there is something "screwy" when they cannot get television. This is one of the oldest places in British Columbia. There is no trouble in getting television elsewhere. The people of Kamloops and Prince George have it and I think Quesnel should have it. There is not much more I
can say. I cannot pound it out of the government, but Quesnel is one place that should get television.
I have a long letter here and as I have a couple of minutes left I might read some of it. It reads as follows:
Dear Gus:
You probably will not be surprised to hear from me on the subject of television for Quesnel. You are aware that Williams Lake has "live" television which they obtained by extension from the Kamloops television station. To the north, Prince George has television supplied by CKPG, Prince George, B.C.
About two weeks ago I phoned the manager of the Kamloops television station and asked him if he was interested in bringing television to Quesnel. He replied that he was and that it was entirely feasible from an engineering standpoint. The cost to our town would be approximately $12,000. This expenditure would be necessary because of added antenna, etc. to boost it from Williams Lake to Quesnel. I would like to make it clear at this point that Quesnel wants television quite badly, and "live" television such as Kamloops can supply.
However, since then I had occasion to call Kamloops again and between my phone calls CKPG television, Prince George, has contacted Kamloops and asked them if they were interested in bringing television here. Kamloops replied that they were and CKPG replied they were also interested in bringing television here. Prince George further advised Kamloops that the Department of National Defence or the Department of Transport were putting microwave in immediately between Kamloops and Prince George. Because this was under defence it was supposed to be highly secret. However, Gus, I would like you to find out from from either of these departments if this is correct, that is, are they bringing microwave from Kamloops to Prince George and if so when will it be in operation. Once microwave is in, I am told, C.B.C. can get on it and we can have "live" television without any $12,000 cost.


Mr. Speaker:: Order. The hon. member has only enough time left to say who wrote the letter.


Walter Clarence Henderson: This is from the mayor of Quesnel, Alex Fraser.


Mr. Speaker:: The house will now revert to the business which was interrupted at five o'clock.



SMALL BUSINESSES LOANS ACT


[Stage Direction]
The house resumed consideration in committee of Bill No. C-49, to amend the Small Businesses Loans Act-Mr. Fleming (Eglin-ton)-Mr. Martineau in the chair.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at 8 p.m.
Paul Joseph James Martin: Before the adjournment I had expressed the hope that the

minister was familiar with what they had been doing in the United States in their small business administration. I had suggested it would be worth while noting certain acts which the administration was empowered to do to assist small businesses.
It is empowered to provide financial counselling and to lend to small business concerns to finance plant construction, conversion or expansion, or to finance the acquisition of equipment, facilities, machinery, supplies, or materials, and to supply such concerns with working capital. It is empowered to lend to groups of small business concerns for the purpose of establishing facilities in and through such corporation to produce or secure raw materials or supplies.
It is empowered to make loans to assist small businesses which have sustained substantial economic injury resulting from drought or excessive rainfall. It is empowered to determine what business enterprises shall be designated "small business" concerns with respect to government procurement, lending, disposal of property, and allocation or distribution of materials, or supplies.
The administration is empowered to certify to government procurement officers as to the productive and financial ability of a small business concern to perform a specific government contract. It is empowered to enter into joint determinations with the procuring agencies to set aside for exclusive award to small business concerns the whole or part of government contracts. It is empowered to consult with other government agencies in connection with their issuance of orders or in the formulation of policies affecting small business concerns.
The administration is empowered to approve small business defence production pools to enter into government prime contracts and sublet their performance to small business concerns. They are further empowered to encourage letting of subcontracts by government prime contractors to small business concerns. They are empowered to provide technical and managerial aids to small business concerns, and to inventory productive facilities of small business concerns. They are empowered to consult with government agencies to ensure fair and reasonable treatment for small business concerns.
It is empowered to ascertain and co-ordinate the means whereby the productive capacity of small business concerns can be most effectively utilized.
It is empowered to make grants to state governments, state chartered development credit or finance corporations, colleges, universities, and schools of business, engineering, commerce, or agriculture for studies, research
Small Businesses Loans Act and counselling concerning the managing, financing and operation of small business enterprises.
It is empowered to assist small business concerns to obtain government contracts for research and development. It is empowered to charter and license small business investment companies in order to stimulate and supplement the flow of private equity capital and long term loan funds to small business concerns. It is empowered to make loans to small business investment companies through the purchase of their obligations.
Now, Mr. Chairman, these are some of the things which the small business administration is empowered to do in the United States to assist small businesses. It includes extensions of credit way beyond the terms provided for in this bill and in the act to which this bill is an amendment. It will be seen that what the Prime Minister said in 1957 and 1958 with regard to the plight of small businesses in Canada, and his proposed remedies, as shown in this measure before the house, fall far short of what was promised by the head of the government at that time.
There is no doubt that this is an area in our economy that demands the attention of government. This government has made a start. It has established a small business branch in the Department of Justice-


Donald Methuen Fleming: Justice?


Paul Joseph James Martin: Rather, in the Department of Trade and Commerce.


Mr. Hamilton (Noire Dame de Grace):: That shows how much you know about it.


Paul Joseph James Martin: There speaks the Solon from Notre Dame de Grace who wandered into my constituency on Friday last and thereby ensured my re-election, for which I thank him very sincerely.
This small business branch of the Department of Trade and Commerce certainly represents a structure that is far short of what the Prime Minister told us his party would do if it were given an opportunity to form a government. Certainly what the government is doing in this measure falls far short of the requests that were made of the government on September 4, 1958, when a delegation representing the distributive trades advisory committee of Canada, a body which represents the retail, wholesale and manufacturing section of small business, approached the government. It falls far short of what they asked the government to do, and what they asked the government to do is not represented by any substantial means in the amendment that is before the house.
1492	HOUSE OF
Small Businesses Loans Act
This delegation defined a small business as "one with a limited investment that is independently owned and/or employing few people with relatively small sales". The statistics that they produced are relevant to the bill now before us. Unfortunately the minister was not able to give us some of the answers to questions put to him by the hon. member for Peterborough. Those questions are not unrelated to some of the statistics produced in the 1951 census of distribution, which shows the nature of the problem that we face if we really are going to do something to assist small business.
This bill is a misnomer. It suggests that this is not only a measure to provide loans to small business, but by the very use of the phrase "small business" it suggests that the government is embarking upon a wide policy something like that which has been in vogue in the United States now for some time.
But I say the problem in Canada can be ascertained by an examination of the number of retail stores, the number of wholesalers and the number of manufacturers that come within the caption of a small business. We are told that there is one retail store for every 92 inhabitants, one service establishment for every 238 inhabitants, one wholesaler for every 535 inhabitants and one manufacturer for every 378 competitors. We are told that for each wholesaler there are 5.7 retail stores, 2.2 service establishments and 1.4 manufacturers. In all there are some 273,000 business concerns in our country that come under this definition of a small business.
When we recall that this government has provided 3,000 loans totalling some $25 million out of a possible $300 million, we see the inadequacy of the measure now before us. We are told, further, that based on 10 employees or less for retail stores and service establishments, 15 employees or less for wholesalers or manufacturers, 90 per cent in number qualify as small businesses, being approximately 250,000 concerns employing at the peak between 600,000 and 700,000 people, with an aggregate turnover in excess of 30 per cent of all dollar sales; that is $14,404,090,458.
It is partly on these figures that this delegation which called on the government on September 4, 1958 based its claim that small business in Canada was the backbone of our economy. We all recognize that the supermarkets, the discount stores, these corporate enterprises and others provide a challenge and a competition to the small businessman whether he be a wholesaler, a retailer or a manufacturer. If we are going to do something to assist this substantial body of Canadian business people and business institutions,
[Mr. Martin (Essex East) .1

then certainly we have to do more than this government proposes to do in this amendment or what this government has already done in the main bill of which this measure is an amendment.
I note with some interest that in the representations made by this group, known as the distributive trades advisory committee, they asked not only for credit represented by the maximum of $25,000 provided for under this measure, but they asked for other measures to provide needed guidance on many practical problems such as store arrangement, stock control, accounting, advertising and the like. These measures are certainly not provided by this bill or by this government.


Donald Methuen Fleming: Mr. Chairman, the hon. member has had 15 minutes of speaking now to establish some element of relevancy of his remarks-


Paul Joseph James Martin: I am now coming to that.


Donald Methuen Fleming: -to the clause under discussion.


Paul Joseph James Martin: I am coming to that.


Donald Methuen Fleming: I am speaking on a point of order.


Paul Joseph James Martin: Oh, you did not
say that.


Donald Methuen Fleming: Well, I think it was obvious to all except the hon. member for Essex East.


John Whitney Pickersgill: It is customary to be polite enough to say so.


Donald Methuen Fleming: Mr. Chairman, the bill before us has been given second reading and the principle has been approved. It has one clause, and the clause has for its purpose simply the enlargement of a definition in section 2 of the main bill to include within the permissible purposes of loans authorized by the act the relocation of premises.
The hon. member is speaking this evening as though he were debating the main bill; as though it had been introduced. I would respectfully urge, Mr. Chairman, that this wide digression on his part should now be brought to a conclusion and that he should be invited to address his remarks to the one clause now before the committee.


John Whitney Pickersgill: Mr. Chairman, before you make any ruling, since I believe this is the first time this particular point has arisen since Your Honour became chairman of committees of the whole house, perhaps I should remind Your Honour of what is generally known as the Howard Green principle as applied to the

first clause of a bill, which was insisted upon often and eloquently by the hon. member for Vancouver Quadra when he sat on this side of the chamber, when he received very frequently the vocal, and I might even say the noisy and sometimes even the rude support of the hon. member for Eglinton.
The principle that the hon. member for Vancouver Quadra enunciated was that in committee, in a rather more informal fashion it had been customary ever since the hon. member for Vancouver Quadra came to this house, which was at the same time as my hon. friend from Essex East, and 10 years before the Minister of Finance came here-


Donald Methuen Fleming: And long before you did-


John Whitney Pickersgill: -and long before I did-


Donald Methuen Fleming: -and graced this chamber with your great presence.


John Whitney Pickersgill: Though I had opportunities of observing the house while the minister was sitting in the city council. As I was saying, we had the minister's-


Donald Methuen Fleming: Your experience is remarkable.


John Whitney Pickersgill: -customary interruptions, which are still going on in a muttering fashion. The principle that was enunciated by the hon. member for Vancouver Quadra was that, in a rather more informal way the general purpose of the bill was discussed, particularly in bills which were not preceded by resolution, on the first clause. I am sure Your Honour would not wish to choke off a tradition which was enshrined by the hon. gentleman who is the senior member of the house on the treasury benches.


Mr. Deschaielets:: Hear, hear.


Donald Methuen Fleming: The only tradition that seems to be involved in the present discussion is the one by which the hon. member for Bonavista-Twillingate seeks to run interference for the hon. member for Essex East and delay the proceedings.


John Whitney Pickersgill: One must protect the weak.


Paul Raymond Martineau: On the point of order, I am sure that none of the hon. members who have spoken on the point would want the debate to be continued in an irrelevant fashion, and I am sure the purpose of all hon. members is to discuss clause 1 in a relevant manner. I was therefore particularly gratified to hear the hon. member for Essex East say he was just reaching the point of relevancy. I hope he has, and that the discussion will continue along that line.
Small Businesses Loans Act


Paul Joseph James Martin: Mr. Chairman, I am sure that you hear well, but I do not think you heard me make the precise point which Your Honour made a moment ago. I have not admitted for a moment that what I have said was irrelevant-


Donald Methuen Fleming: You were out of order.


Paul Joseph James Martin: -but what I sought to imply was that I was now going to deal with something that was more particularly relevant than what I have thus far dealt with. I am sure the Minister of Finance will agree that I have given useful background material to the particular relevancy I am now about to embark on.
The amendment deals, of course, with the conditions under which there will be an extension of further capital made available to small business, and the method of financing small businesses. The brief presented to the government urging the need for a comprehensive small business administration pointed out that an examination of Dun's Review and Modern Industry for October, 1957, showed that in the United States 12.4 per cent of manufacturers, 9 per cent of wholesalers, 9.6 per cent of retailers and 14.1 per cent of service establishments were being held back in their growth by lack of capital and financing. I propose to apply these percentages to Canadian figures, but before doing so I should like to make reference to what the minister said when he introduced this amendment on September 15 of this year.


Donald Methuen Fleming: We have not come to September of this year yet.


Paul Joseph James Martin: Of February, I said.


Donald Methuen Fleming: No.


Paul Joseph James Martin: The minister must not think that because I say "September" instead of "February" he has won a point. I expect the Minister of Finance to pay attention to the substance and not to details which are of no consequence.


An hon. Member:: What substance?


Paul Joseph James Martin: The minister said, if I may refer to his memorable words as recorded on page 915 of Hansard:
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 about one quarter, manufacturers for about one fifth and the remainder of the loans went to wholesalers.
Then he went on to say that the average size of individual loans was $8,000.

Small Businesses Loans Act


Donald Methuen Fleming: Eight thousand six hundred dollars.


Paul Joseph James Martin: Yes, $8,600. Then, the total amount lent under this act as of December 31 was $25.5 million. Let us see to what extent these 2,977 loans represent a confrontation of this problem in the context provided for specifically by the credit facilities set out in the main act, and the extent to which they will be expressed in the amendment now before the committee. We are able to do this from the figures given to the government by the delegation which came to see it in 1958. The delegation points out that in Canada there are 151,626 retailers, and that the number needing capital assistance-


Donald Methuen Fleming: On a point of order, Mr. Chairman, your ruling is being cynically defied by the hon. member for Essex East.


Paul Joseph James Martin: I am making my speech. Is the hon. gentleman rising on a point of order?


Donald Methuen Fleming: Yes.


Paul Joseph James Martin: I did not know that.


Donald Methuen Fleming: The hon. member says he is making his speech and, certainly, no one else would claim to be making his speech except the hon. member. But Mr. Chairman, your ruling is being cynically defied. The remarks of the hon. member have no relevance whatever to this enlargement of the purpose of the loans so as to include the relocation of premises. He is going ahead in defiance of your ruling and he is discussing the bill as he might have done when the main act was introduced.


Paul Joseph James Martin: On the point of order, may I say to the Minister of Finance that if I was thin-skinned and sensitive, which I am not, I would take exception to the word "cynical" which is one way of imputing a motive. But I am not going to ask the minister to withdraw that word, because he makes so many observations which are contrary to our rules that one would be engaged all day in asking him to withdraw. I do not intend to do that. Surely, what I am discussing now is relevant. I am indicating, on the question of expanding credit to small business for the particular purpose the minister has in mind in this amendment, that the hon. gentleman is not meeting the problem. I am addressing myself as relevantly as one can to the situation in this country in that regard, and the way I am doing it is by showing the number of retailers, the number of service stores, the number of wholesalers and


the number of manufacturers. The estimated number in these categories who need financial assistance to carry on their operation either in the sense contemplated in this amendment or otherwise is surely relevant. The minister obviously has something which he wants to hide, otherwise he would not continually interrupt me and try to prevent me from making this constructive statement.


Donald Methuen Fleming: What about imputing motives now?


Mr. Campbell (Stormont):: The only way in which this would be relevant would be if the hon. member was alleging that these merchants required assistance to relocate. A few minutes ago the hon. member for Essex East said he was about to embark on a sea of relevance. Well, he has not even laid the keel yet. He has not even started.


Paul Raymond Martineau: I think that at this juncture the hon. member for Essex East is getting fairly close to the item under consideration so I will ask him to continue.


Paul Joseph James Martin: I thank Your Honour for your generous understanding of the position in which I find myself.
I had indicated that according to the distributive trades advisory committee which came to see the government, there were 151,626 retailers in Canada of whom 14,566 needed financial assistance. These are not my figures; these are the figures of the persons engaged in these various categories of small business enterprise who came to see the government to suggest what should be done to help it meet the difficulties facing the proprietors of small businesses in Canada. The number of service stores is given as 58,748, and the delegation says that 8,283 in this group are in need of financial assistance to carry on their enterprises. The number of wholesalers is 26,167 and the number of wholesalers who need assistance is 2,355. The number of manufacturers is 37,021 and the number in need of financial or capital assistance is 4,590. To sum up, this means that there are 273,562 retailers, service store operators, wholesalers and manufacturers in Canada, and of this number 29,794 stand in need, in the judgment of this delegation, of the kind of assistance which in part is being provided in this amendment. When the minister tells us in the face of this actual situation-some 29,000, almost 30,000, needing assistance-that the government has to date been able to provide loans only numbering 2,977 and amounting to only $25.5 millions, I say that the government by these very figures presents the answer to our charge that this particular bill and the companion to which it is an amendment is not even meeting the limited

purpose that the measure has in mind of providing for credit to small businesses in certain conditions. This amendment, therefore, affords the opportunity of asking the government either to give to the staff of the small business administration greater assistance to extend the scope of its operations, instead of bringing forward these anaemic bits of amendments-


Paul Raymond Martineau: I regret to interrupt the hon. member but his time has expired.


Paul Joseph James Martin: I think I terminated at an appropriate moment and I hope I have impressed the Minister of Finance with the strong case I have made.


Donald Methuen Fleming: The hon. member has impressed me just about as much as he usually does.


John Whitney Pickersgill: That is a typically arrogant comment on the part of the minister.


Donald Methuen Fleming: The supreme exponent of arrogance, the hon. member for Bonavista-Twillingate, who is arrogance personified.


Mr. Fleming (Okanagan-Revelstoke):: Mr. Chairman, after listening to the statistical approach of the hon. member for Essex East I wish to participate in this debate. Rather than adopting a theoretical or statistical approach to the problem I wish to contribute a personal observation as one who since age 15 has participated in the operation of a small business. I do not have either a theoretical or statistical approach to this problem as has the hon. member for Essex East-


Paul Joseph James Martin: At least I have
an approach.


Stuart A. Fleming: -but
rather one based on personal experience, sometimes a painful experience, particularly during the period in which the hon. member for Essex East was a member of the government.
The amendment before us represents an expansion of the scope of the act, a very useful, helpful and desirable expansion. I assume that as this act continues to be used in small business in Canada other amendments may develop and further expansions of the operations of the act may be introduced as I hope they will be. Because of some of the comments made by the hon. member for Essex East during the last 20 minutes I should like to go back to the period during which the government of which he was a member presided over the business operations of this country.


Peter Francis Martin: That was a time of prosperity.
Small Businesses Loans Act


Stuart A. Fleming: The
hon. gentleman says that was in a time of prosperity, but I say it was in a time of restriction, restraint and failure.


Mr. Flynn:: You did nothing.


Stuart A. Fleming: During
that time I was a vice president of the British Columbia tobacco and candy jobbers association. The association sent resolutions and appeals, resolutions and appeals, year after year to the government then in office only to have them completely ignored. Nothing was done and no help was forthcoming. No assistance whatever was provided.


Some hon. Members:: Shame.


Stuart A. Fleming: And
yet the hon. member for Essex East blithely rises in this chamber and says that the present government should be doing more.


Paul Joseph James Martin: Because your party made promises.


Stuart A. Fleming: How
can he say this when during all the time the government of which he was a member was in office nothing was done by that administration. If he or the government of which he was a member had acted during that period a great many men and women in Canada who now work for large corporations might have been able to continue in their own business. They might have survived if they had received assistance at the time they really needed it. If there had been available benefits such as those available under this act in the years prior to 1957, many businesses not now in existence would still be in operation because they would have had available to them the required credit for capital expansion and equipment purchases that would have assisted them in competing on a more equitable basis with the large corporations against which they were competing.
This is not a figment of the imagination. This is a thing that is known to small businessmen across Canada. Perhaps there is more the government can do in this area. That may be, but at least more is being done now than was done over a period of many years. Certainly nothing was done by the government in office prior to the 1957 election. As I explained, I speak not in a theoretical way but as one who has participated in small business for most of his adult years.
I know there was nowhere to turn in the years prior to 1957. No act such as this was available. There was no directorate under the Department of Trade and Commerce to which small businessmen could have turned for expert advice and service.
1496	HOUSE OF
Small Businesses Loans Act


Mr. Montgomery:: There was no sympathy forthcoming from the government either.


Donald Methuen Fleming: No,
there was no sympathy forthcoming from the previous administration. It may be said there was not even a lack of sympathy on the part of the previous administration but merely a lack of awareness of the very existence of small business. We were too small to be bothered with. As a matter of fact, my family's business began in the year 1935. It was established at a time when certain measures existed introduced by a previous Conservative government, which measures even in those difficult days after 1935 provided an opportunity to small firms such as the wholesale firm my family operates to compete against chain merchants and chain wholesalers, against very large corporations.
Those protections existed for a few years and then gradually the erosion began. Lost were the opportunities to sell merchandise at what are now termed protected prices. This is something that is looked upon with scorn by many people in the country who have never been in business. Under the Conservative government the feeling is at least that a merchant, however large or small, is entitled to a fair return on the sale of his merchandise. It is felt that a merchant should have an opportunity to compete with those with access to immense capital, who can exist through a period of price decline with respect to certain articles or certain types of merchandise, who can ride out the difficulty caused by lack of profit, in the meantime swallowing up their small competitors. Prior to 1935 and for a short time afterwards these protections existed for the small merchant. Under the Liberal administration they were removed entirely. In my own field of business I watched my friends succumbing to the difficulties with which they were confronted-


Paul Raymond Martineau: Order. I must warn the hon. member that he seems to be wandering far afield from the clause under consideration. I trust the hon. gentleman will relate his remarks to this clause of the bill which is limited in its scope. Therefore the discussion must also be limited inasmuch as it must bear directly on clause 1.


Paul Joseph James Martin: The Minister of Finance did not object.


Stuart A. Fleming: I
apologize, Mr. Chairman. I allowed myself to stray down the path established by the hon. member of Essex East. I have no hope of overcoming him but I shall now return to the point.


This amendment provides a further useful expansion of the scope of the act. As I said, other amendments may come in time but meanwhile this will meet an essential need, and I believe during the months to come will provide many more small merchants and businessmen with the opportunity of taking advantage of the legislation, thus contributing even more to the stability and growth of the economy of the districts and towns in which they operate.


Walter George Pitman: Mr. Chairman, I do not intend to make additional extended remarks at this point but I wish to ask one or two questions of the minister. In view of the fact that we have no way of knowing the reasons for the rejection of many people who would appear to come within the legislation, I should like to know where the idea came from for the expansion of this measure which was foreshadowed in the speech from the throne. Who brought this forward? Was it the chambers of commerce or the bankers themselves? Who saw this as a large extension of opportunity under this legislation?
Would the minister also tell us to what extent this amendment will increase the amount which it is possible to borrow through the banks over the next year or so?


Donald Methuen Fleming: Mr. Chairman, the proposed amendment did not come about in the way indicated in the jaundiced approach of the hon. member. It came about through experience with certain persons who had applied for loans for this particular purpose of relocating premises which caused an examination of this question to be made in terms of the existing legislation. That is how the matter came about.
The first view of the act taken was that the terms were broad enough to permit loans to be guaranteed for the purpose of relocating premises. On taking legal opinion on the question, however, the advice was given that the terms of the act were not broad enough to cover that particular type of business outlay. As the desirability of extending the act to permit extension of credit in such cases was in the view of the government very clear, in aid of small business the government decided to place this amendment before the house.


Walter George Pitman: Mr. Chairman, any jaundice which was seen in that question was certainly placed there by the minister. I was just asking where the idea came from.
The second part of my question related to the extent to which the minister expects an increase in borrowing. Does he expect it will be 10, 15 or 20 per cent or more?


Donald Methuen Fleming: No one can make such an estimate, Mr. Chairman. We do know that there are such cases. How many cases there will be and how many loans will be made in such cases, no one can state precisely.


Erhart Regier: Mr. Chairman, I regret very much having to place on record the view that it is most obvious that the minister's memory is very short indeed.
At the time when he first introduced the bill it was our group which advocated that the bill ought to include the purchase of new premises or the relocation of existing premises; and the government went to great lengths, including the minister, to explain to the house why this was not possible. He now tells the house that at the time the bill was introduced into this House of Commons it was anticipated by the government that the bill would cover incidents of this kind. I find it hard to believe that the minister's memory would be that short.


Donald Methuen Fleming: If the hon. member has any occasion to cite anything that was said in the course of the debates on this measure a year ago, I suggest that he read extracts from Hansard in order to establish his point. The point that was raised at different times during the debate-and I do not know what relevance this may have to the present item-concerned loans for the purpose of acquiring premises and particularly to provide working capital. The purpose of the bill was not-and this was said repeatedly during the course of that discussion-to provide or to guarantee loans for the purpose of providing working capital. That is a different matter altogether from what is now before us.


Herbert Wilfred Herridge: I have a very few brief remarks to make and they are somewhat relevant to this amendment. I do not take the same gloomy approach as that taken by the hon. member for Essex East. I remember that for years the small business interests urged the government of the day to pass legislation of this kind. We must recognize the fact that we have an act. However, I think it is our responsibility to improve the legislation from experience. It is in that spirit that I wish to offer one or two suggestions. I have talked to small business people and to bank managers about the operation of the bill. Although I am normally a backwoodsman, I discuss these things with my constituents. I suggest that in some cases bank managers require some instruction as to the spirit and purpose of the act. I think some medium should be found for getting this information out to the bank managers, possibly through the head offices of the banks.
26207-1-95J
Small Businesses Loans Act I think that situation also needs investigation by the small business branch.


Donald Methuen Fleming: May I ask the hon. member whether he has not noticed a substantial improvement in this respect since the early days when the legislation was in effect? I agree with him that in the early days bank managers, or at least many of them, were not acquainted with the new instructions. It took time for that acquaintance to develop. However, according to my observation and the representations that have been made to me, that stage has been passed and the legislation is now operating relatively smoothly.
_ Mr. Herridge: The minister is quite correct. There has been an improvement. However, I think there is still room for improvement and I do not think that point should be overlooked. Then, in order for the department or the small business branch to be well informed as to the operation of the act, I think there should be something more than just a statistical report from the bank managers^ or from the banks to the department. I think the branch should ask for suggestions and some report that would cover their experience where the legislation fails here and there to meet certain situations. I think those reports should be under continuous scrutiny by the small business branch, and that matters of importance should be brought to the attention of the minister. Then I think the recommendation of the banks as a result of the reports of their managers and the recommendations of the small business branch should be considered by the minister, and that annually we should have a somewhat fuller report of the operations under the act, not just a statistical report giving the number of loans, the bare figures. I think we should have a report which gives us a fairly clear picture of how the act has functioned throughout the year and even recommendtaions as to how it may be improved.


William Hector McMillan: I was interested in the words of the speech from the throne where it states:
Other measures which will help to enlarge employment by stimulating economic activity will include a bill to increase the total amount of financing of exports which can be undertaken by the export credits insurance corporation and an amendment to broaden the scope of the Small Businesses Loans Act.
I think small businesses might be expected to get something more from this amendment. I suggest that this amendment is a broadening of the scope in a most restrictive degree. The amendment can of necessity help very few businesses. After all, there are very few businesses that would wish to move their
1498	HOUSE OF
Small Businesses Loans Act offices or some other part of their plant. I admit that in a few cases some businesses might get help. However, in the over-all picture, there will be no help or new enlargement of credit facilities to small businesses in general. The speech from the throne states that this amendment will help to enlarge employment. If this is so, I should like to ask the minister whether he has made any calculation in this respect. I think he should be able to do that. The Financial Post of January 27, 1962, had this to say:
Three basic changes in the Small Businesses Loans Act are planned by the government-
I think small business expected this. The Financial Post asserts that this was the meaning of the announcement in the speech from the throne that small business would be helped by these amendments. Then it goes on to state that the act was not nearly so effective as was announced here in the house when the government introduced it in November and December of 1960.
They suggested three measures that might be taken to help small businesses in connection with this act. For instance, they suggested that there should be an increase in the loan limit which at the present time stands at $25,000.


Donald Methuen Fleming: Mr. Chairman, we had these irrelevancies this afternoon. They have been repeated now for the third time. Can we not confine ourselves to the clause now under consideration?


William Hector McMillan: Mr. Chairman, I will become relevant. The minister should be able to tell us how much money he expects to put out under this amendment. Previously, when he put it at $300 million he said that within the immediate future $75 million would be taken up. We know that only one third of that amount was taken up in the first year. I think we have the right to have this information and I think I am relevant in asking the minister at this time how much this particular amendment to this act will increase the loan. I think there is every evidence that business needs help. I will close with this observation. We know that business failures increased by 6.6 per cent this last year. Just in the month of January last business failures among small businesses in Canada increased by 19 per cent over those in January of last year.


Donald Methuen Fleming: That fact must have made the hon. member very happy.


Paul Raymond Martineau: Shall clause 1 carry.


Paul Joseph James Martin: I should like to ask the minister this question. In his statement he said that the maximum amount

which may be borrowed by a small businessman is $25,000. Perhaps, that is a provision in the basic act. I forget its provisions. However, how does the minister arrive at the figure of $25,000?


Donald Methuen Fleming: What figure of $25,000?


Paul Joseph James Martin: In your statement on February 15 you said that the maximum amount which may be borrowed by a small businessman is $25,000 and the maximum period of repayment runs for 10 years. How was the figure of $25,000 arrived at?


Donald Methuen Fleming: If the hon. member will take the trouble to read the original act he will find that is the maximum loan provided by the act.


Paul Joseph James Martin: My question is, how did the minister arrive at that figure? Why is that figure set as the maximum amount that may be borrowed?


Mr. Benidickson:: Mr. Chairman, I think that the question raised by the hon. member for Essex East is particularly relevant because we know that the Prime Minister of this country went across Canada in 1957 and made a great number of promises. I am not going to get into the so-called numbers game with respect to how many have been kept, but certainly one of the promises he made was that he would provide for small businesses laws similar to those that were available to small businesses in the United States. I find that this is a very puny amendment to the act because the Prime Minister said at Camp-bellton, N.B. on May 4, 1957 that he would fashion his small business assistance act upon that of the United States. He said the same thing in Brockville, that action similar to that followed in the United States should be taken in Canada, and so on. I could give many other examples of what he put before the electorate in 1957.
All we got in 1958 was the setting up of the small business branch of the Department of Trade and Commerce, and it was not until December of 1960 that the Small Businesses Loans Act was introduced. That falls far short of what we know has been available for some years in the United States. In that country even in 1958 they increased the lending authority for a single loan under their small business administration act to $350,000 from $250,000.
There are many other items to which reference could be made. I think particularly of the fact that in the United States legislation there is a maximum rate of interest.

There is no maximum rate of interest in our legislation and it is not provided for in this amendment.


Paul Raymond Martineau: Order. I have been following the hon. member very closely in the hope he would get down to clause 1 of the bill, but he is straying off onto another subject and I would ask him-


William Moore Benidickson: I am saying that clause 1 falls short.


Paul Raymond Martineau: Order. I would ask him to discuss clause 1 of the bill.


William Moore Benidickson: I am discussing clause 1 and I am saying that, having regard to the promises made, it falls far short of what should be in clause 1 because there is no fixed rate of interest. After we conclude the debate on this subject we are going to deal with legislation amending another act, and I am sure the government is going to boast that lending under that act has increased quite impressively. I want to point out to the minister that under that act, which is similar to this one, farmers can go to commercial banks and get loans at a fixed rate of interest that is lower than the normal rate.


Paul Raymond Martineau: Order. I think the hon. member will admit that he is now embarking on the discussion of something else which appears on the order paper and is not discussing the matter that is before the committee. I am sure he will want to co-operate with the Chair so that clause 1 may be considered and nothing else.


William Moore Benidickson: Mr. Chairman, having regard to the wording of the speech from the throne that this measure has something to do with increasing employment and jobs, questions have been asked the minister time and again with regard to the extent to which he thinks this amendment will actually increase jobs. When the original legislation was introduced, with its definitions of entitlement, there was a great deal of fanfare that $300 million of new credit was being offered to the Canadian public. That was in 1960, three years after certain promises had been made; but even in December, 1960 the Minister of Trade and Commerce and the Minister of Finance said that under the legislation as presented to us-we now have an amendment to enlarge the opportunities of borrowing-$300 million of additional credit would be available over a period of three years.
We have had 14 months or so of experience under the act and the total amount lent has been $25 million. What liberality is provided under the amendment now before
Small Businesses Loans Act us? What acceleration is likely to follow if we pass this amendment? When the act was first introduced it was talked about as a $300 million credit measure, but after 14 months only $25 million of credit has been advanced under the restrictive principles of the act. What is likely to be the enlarged volume of credit under the amendment that we have before us?


Donald Methuen Fleming: I have already indicated that no one can make a precise estimate. We have had enough reason to think that there are a number of cases of this kind and we felt this amendment was important enough to be passed by the house.


Mr. Peters:: Mr. Chairman, I would be wholeheartedly in agreement with the proposed amendment if there was any assurance or indication from the minister that it would do anything for anyone. We know that the Small Businesses Loans Act has not provided for the business people of this country the opportunity they had hoped to have, and certainly I do not think that the organizations representing the small business people of this country have considered this to be a major amendment when making their annual presentations or one that would warrant the fuss that was raised when it was first introduced this session.
I think there are ways that we can do something. I do not really think that all businesses want to move from the south side of the street to the north side or from the downtown section to the suburbs. I do not think that is necessarily so at all.


An hon. Member:: Yes, it is.


William Arnold Peters: It may be so in some areas, but I find that development organizations will usually go into the suburbs and build new businesses and they do not particularly ask for government aid. Certainly the pittance that is involved in this amendment would not cover a major-sized suburban development in the hon. member's riding. No doubt he has some subdivisions and the money involved in the small businesses established in those subdivisions would probably be more than double the amount the government is prepared to make available to all small businesses in Canada.


Walter Clarence Henderson: What do you know about running a store?


William Arnold Peters: If I were in the business of running a store-


Walter Clarence Henderson: I was.


William Arnold Peters: -I would certainly look for more co-operation from governments, particularly this government, than is provided under this amendment. The original act had

15G0
Small Businesses Loans Act some merit. We supported it because we thought it was going to do something, but I should like the minister to stand up and tell us why only $25 million has been advanced under the act when a considerably larger amount was authorized. Why has it not been taken advantage of? Why is the whole $300 million not in circulation at the present time? I think I know the answer.


An hon. Member:: Nationalize it.


William Arnold Peters: It is a very simple answer, the same answer that has been used in every other case including loans made to farmers and loans made to fishermen, and it involves the interest rate. I believe I am in order and I want to move an amendment to the section as follows:
That clause 1 be amended by deleting the semicolon at the end thereof and by substituting therefor the following:
"and any such loan under this act shall bear an interest rate of not more than 5 per cent per annum simple interest:"
I believe this amendment will do a lot to enable businessmen, even under this section, to move from one side of the street to the other; or what is probably more in keeping with modern business practice, to move from downtown areas out into the suburbs. I believe this simple amendment will do more to help extend small business loans to the business community than will the first part of this particular clause.


Donald Methuen Fleming: Obviously this
amendment is out of order because it is not relevant to the subparagraph which purports to amend the paragraph relating to the definition of "business improvement loan". The amending bill simply proposes to add certain words regarding the possible construction or purchase of alternative premises. The amendment proposed by the hon. member is clearly out of order.


Frank Howard: If I may reply to the point raised by the minister, it is under section 2 where there is set out certain definitions of what is a "business improvement loan". That is in paragraph (d) which is sought to be amended by the bill now before the house. The amendment proposed by the hon. member for Timiskaming merely clarifies further what is a business loan by referring to the rate of interest which will be applicable to it. I contend it is completely in order and has happened on other occasions.


Paul Raymond Martineau: I think the rule of relevancy applies to any amendment which is proposed to clause 1, as it also applies to the discussion, and I see that in Beauchesne's fourth edition, page 281, the citation 394 reads:
The principle or relevancy in an amendment governs every proposed resolution-

I think it is quite clear from what I read in the amendment that the amendment must be ruled out of order because of irrelevancy.


William Arnold Peters: I appeal your ruling, Mr. Chairman.


Donald Methuen Fleming: Sheer obstruction.


An hon. Member:: Is that done?


Erhart Regier: It has been done before by a man who used a flag.
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:
Mr. Speaker, in committee of the whole when clause (1) of Bill C-49, an act to amend the Small Businesses Loans Act was being considered, the hon. member for Timiskaming (Mr. Peters) moved an amendment as follows:
That clause 1 be amended by deleting the semicolon at the end thereof and by substituting therefor the following:	"and any such loan under
this act shall bear an interest rate of not more than 5 per cent per annum simple interest."
X ruled the amendment out of order on the ground that, as the amendment went beyond the scope of the bill as approved by the house on second reading, it was irrelevant to the bill. Whereupon the hon. member for Timiskaming appealed to the house from this decision.
Mr. Speaker put the question as follows:
The question is an appeal to the house from a ruling of the chairman of the committee of the whole who has reported that in committee of the whole when clause 1 of Bill C-49, an act to amend the Small Businesses Loans Act was being considered, the hon. member for Timiskaming (Mr. Peters) moved an amendment as follows: "That clause 1 be amended by deleting the semi-colon at the end thereof and by substituting therefor the following: "and any such loan under this act shall bear an interest rate of not more than 5 per cent per anum simple interest."
The chairman ruled the amendment out of order on the ground that the amendment went beyond the scope of the bill as approved by the house on second reading and was irrelevant to the bill. Whereupon the hon. member for Timiskaming appealed to the house from this decision.


Lionel Chevrier: While we on this side of the house voted to uphold your ruling, Mr. Chairman, because we were of the opinion that your ruling was the correct one, none the less we were in favour of the principle of the amendment and we should have supported it had it been in order.


Donald Methuen Fleming: The hon. member for Laurier has been in the house long enough to know that those remarks of his were entirely out of order.


Lionel Chevrier: I do not want to discuss the point of order with the hon. and learned member who seems to know everything about the rules but who does not know them nearly as well as he thinks he does. I submit with deference that I was in order in making the statement I did at the time I did.


Erhart Regier: As you have graciously allowed the hon. member who has just resumed his seat to explain his vote, I also should be entitled to say that we voted1 as we did because we thought that a government guarantee ought to be worth something-
Small Businesses Loans Act


Some hon. Members:: Order.


Paul Raymond Martineau: I think this discussion as to why certain members voted in a certain way is irrelevant and I trust that if the hon. member wishes to continue he will discuss the first clause of the bill.


John Whitney Pickersgill: Before clause 1 carries, I am sure it will be in order-


An hon. Member:: No, it would not.


John Whitney Pickersgill: Some kind member over there behind the government front bench suggests that my question would not be in order before it has even been heard. He goes even further than the Minister of Finance, who usually listens to the first half of the sentence before saying it is wrong.


William Moore Benidickson: He usually says "rubbish".


John Whitney Pickersgill: I was rising to ask the Minister of Finance whether the government has in fact given any consideration to the point which has been made several times in this debate that these loans, which are made with a limited1 government guarantee, should bear a lower rate of interest than loans made without a government guarantee-a provision which exists in two similar pieces of legislation which we are to consider later this evening. I should like the minister, if he can, to tell us any reason why this is not being done.


Erhart Regier: On a point of order, I believe the house has just decided that matter and recorded its opinion as to whether there ought to be a limit imposed on the interest rates.


Some hon. Members:: No.


Erhart Regier: I believe that after an expression of opinion of that kind the hon. member's remarks are not in order. He is now attempting to apologize for the vote cast by the Liberal party.


John Whitney Pickersgill: I presume I may speak on that point of order.


Paul Raymond Martineau: As far as the point of order is concerned, the Chair is not disposed to consider it further. I do not think it was validly taken. At the same time, the rules of relevancy still apply and I trust the hon. member's remarks will be confined to the item under consideration.


John Whitney Pickersgill: As a matter of fact, I had concluded the question I was putting to the minister but the last few words were somewhat interrupted by the hon. member's point of order. It was whether in putting this amendment forward the government had given consideration to the advisability of making an express provision at the same time that the rate of interest on these guaranteed loans

Small Businesses Loans Act would be in fact lower than the rate of interest on commercial loans which bore no government guarantee.


Paul Raymond Martineau: Shall clause 1 carry?


John Whitney Pickersgill: I hope the minister will reply.


Paul Joseph James Martin: Mr. Chairman, the question asked by the hon. member for Bonavista-Twillingate is a perfectly legitimate question. We are not dealing with a decision that has already been taken. The hon. gentleman simply asked the Minister of Finance whether he has given any consideration to lowering the rate of interest which it is proposed to charge in this situation, providing in consequence consistency with the provisions of interest in legislation to be later introduced. Has the minister given consideration to that? That is the question. Surely this committee is entitled to an answer.


Paul Raymond Martineau: Shall clause 1 carry?


Paul Joseph James Martin: Mr. Chairman, we just cannot be called to order without some explanation. A question has been put to the Minister of Finance.


William Moore Benidickson: Closure.


Paul Raymond Martineau: I shall be glad to furnish the hon. member with an explanation. The amendment that was proposed previously was ruled out of order because it went beyond the scope of the bill and also was irrelevant to the clause under consideration. I would say the same reasons apply to the question that the hon. member is asking the minister.


William Moore Benidickson: Mr. Chairman-


Paul Joseph James Martin: If my hon. friend will permit me I would say this. Mr. Chairman, would you consider me out of order if I were to ask the Minister of Finance-


Some hon. Members:: Yes.


Paul Joseph James Martin: -if he would give consideration, having in mind this evening's discussion, to bringing in an amendment to the act to which this bill is an amendment, to provide for a rate of interest that would meet the principle of the amendment, a principle which we in the opposition support. That question is certainly in order and I thank Your Honour for saying it is in order. I ask the Minister of Finance if he will give an answer to that question.


Donald Methuen Fleming: Mr. Chairman, it will be a long time before I bring in an amendment to this legislation unless it is strictly necessary in the light of the sheer obstruction offered by the official opposition

tonight and their shilly-shallying over the stand they took a moment ago on the appeal from your ruling.


William Moore Benidickson: The retail merchants will be interested in that comment.


Paul Joseph James Martin: Mr. Chairman, I rise on a question of privilege. This is not the first time the Minister of Finance has made remarks to which we take strong exception. The remark the minister made earlier this evening to the hon. member for Welland-


Jacques Flynn: Mr. Chairman, on a point of order-


Paul Joseph James Martin: I am now speaking on a question of privilege.


John Whitney Pickersgill: There is a question of privilege. The minister used the word "obstruction".


Jacques Flynn: Mr. Chairman-


Paul Raymond Martineau: Order. I suggest to the hon. member for Essex East that if he has a question of privilege he should raise it, but I urge that in so doing he refrain from bringing up matters that have already been disposed of by the house and which should have been raised previously, not now.


Paul Joseph James Martin: Mr. Chairman, I made no remark that warranted that observation. I am simply saying that the Minister of Finance made an accusation against hon. members of this house which he should withdraw.


An hon. Member:: Hear, hear.


Paul Joseph James Martin: Mr. Chairman, the minister said that what we in the official opposition are doing tonight is obstructing this measure, because we have expressed views that the minister does not like. Because we have sought to improve this bill is no justification for the minister saying that we are engaging in a process of obstruction. We supported Your Honour in the ruling made a moment ago and I ask you now to request the Minister of Finance to withdraw that unseemly remark.


Some hon. Members:: Oh, oh.


Paul Raymond Martineau: I do not think that the expression used by the Minister of Finance can be termed unparliamentary. The charge of obstruction is one that is made constantly in this house on one side or the other. Now that the hon. gentleman has raised the point and expressed his viewpoint on it I believe the question should now be closed. I now ask whether clause 1 will carry?


Paul Joseph James Martin: Mr. Chairman-


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


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Of course hon. members opposite can howl us down if they want to. I was rising on a point of order. I understand Your Honour's ruling to be that it is perfectly proper for one hon. member to accuse another hon. member of obstruction and that that is quite parliamentary. It seems to me that this is such a departure from previous rulings in the house, sir, that it ought to be underlined and recorded as a new departure in this house.


Jacques Flynn: Mr. Chairman, on a point of order-


John Whitney Pickersgill: I am speaking to a point of order.


Jacques Flynn: -the hon. member is discussing your ruling and that is completely out of order.


Paul Raymond Martineau: I would say in answer to the hon. member for Bonavista-Twillingate that the Chair does not condone obstruction or anything like it. But this is an expression that is used from time to time. The circumstances in which the expression is used are not such as to justify my requesting the minister to withdraw that particular expression at this time.


Paul Joseph James Martin: I wish to say this, Mr. Chairman. You say you do not wish to condone obstruction. I simply wish to say to you with great respect, sir, that if there has been any obstruction tonight it has been on the part of the uncommunicative, pouty Minister of Finance who is obviously angered because we in the official opposition have taken issue with some features of this bill.


Donald Methuen Fleming: Pompous Paul.


Paul Joseph James Martin: Well, Mr. Chairman, the minister says I am pompous. Let me say to him that I would rather be pompous than a pouter.


Donald Methuen Fleming: You succeed in being both.


John Whitney Pickersgill: The minister is trying to impose closure.


Gordon Minto Churchill: Mr. Chairman, on the point of order, I think it is important to record in Hansard the following sentence to be found in May's sixteenth edition at page 459:
A charge that a member has obstructed the business of the house, or that a speech is an abuse of the rules of the house is not out of order.


Paul Joseph James Martin: We decided that a long time ago.
Small Businesses Loans Act


An hon. Member:: Two flag Jack.


Mr. Pigeon:: It is six now.


Paul Raymond Martineau: Now that we have disposed of various points of order it would be of advantage to hon. members to sit down and hear the hon. member for Skeena.


Frank Howard: I rise merely to say it is
obvious this evening that the Liberal party has extended its principle of two flags and two policies to everything that comes on the floor of this house. Obviously the Liberals desire to appear to be in favour of something and yet against it, depending on which way the wind blows.


Chesley William Carter: Mr. Chairman-


John Whitney Pickersgill: Mr. Chairman-


Paul Raymond Martineau: The hon. member for Burin-
Burgeo.


Jacques Flynn: Obstruction.


John Whitney Pickersgill: Mr. Chairman-


Jacques Flynn: You are not the hon. member for Burin-Burgeo. He was recognized by the Chair.


John Whitney Pickersgill: I beg your pardon. I yield to my hon. friend.


Some hon. Members:: Hurray.


Chesley William Carter: Mr. Chairman-


Mr. Campbell (Slormonl):: Who is obstructing now? The hon. member for Bonavista-Twillingate should apologize to the hon. member for Burin-Burgeo.


Chesley William Carter: Mr. Chairman, before the clause carries I wish to repeat a question which I put to the minister on second reading.


Paul Joseph James Martin: It is futile to do so. You will not get an answer.


Chesley William Carter: I would ask the minister whether he could give the committee a breakdown by provinces of the aggregate of loans of $25.5 million?


Donald Methuen Fleming: I will be glad to send the hon. member a breakdown.


John Whitney Pickersgill: Get up and answer like a man.


William Moore Benidickson: The minister should not nod. Hansard does not record a nod or any other unspoken gesture.


Paul Raymond Martineau: Shall clause 1 carry?


William Moore Benidickson: Is the hon. member going' to receive an answer?


Paul Joseph James Martin: Mr. Chairman, the hon. member for Burin-Burgeo asked a question of the minister. The minister in

Small Businesses Loans Act reply said he would send the information to the hon. gentleman. Surely the minister has the information now. I ask the minister to let us all have it.


John Whitney Pickersgill: The whole committee is entitled to the information.


Paul Joseph James Martin: Such reticence.


Donald Methuen Fleming: Mr. Chairman, the figures are as follows: British Columbia, $3,324,196.25; Alberta, $2,138,187.85-


Paul Joseph James Martin: Not so fast, now.


Donald Methuen Fleming: -Saskatchewan, $1,537,497.01; Manitoba, $1,230,264.35-


Some hon. Members:: Faster.


Donald Methuen Fleming: -Ontario, $8,056,142.15; Quebec, $7,372,527.45-


Mr. Bourget:: This is a farce.


Joseph-Alphonse-Anaclet Habel: The minister is laughing at parliament.


Donald Methuen Fleming: -New Brunswick, $686,000.55; Nova Scotia, $841,495.00; Prince Edward Island, $204,332.80; Newfoundland, $191,626.00. Total, $25,582,269.41.


Frank Howard: I have a question for the minister, Mr. Chairman. When the minister was speaking I did not quite catch the figure he used in relation to New Brunswick. Did the sum end with 45 cents or was it 55 cents?


Gage Workman Montgomery: Read Hansard tomorrow.
Clause 1 agreed to.
On the title.


William Moore Benidickson: I have a question that I think is relevant. We have here an amendment which henceforth will permit loans under the Small Businesses Loans Act to be made under circumstances that involve the construction or purchase of alternative premises where the premises in which the business enterprise is located will cease to be available or suitable for the purpose. Having regard to the fact that we have had this legislation for 13 months I ask the minister this question. At what rate of interest have the loans been made? We have been told that in volume $25 million of loans have been made. Have any loans been made at a rate of interest less than 6 per cent? My next question is this. What is the likely rate of interest that will be applicable for loans or to permit business improvement loans to be made for the construction or purchase of alternative premises?


Donald Methuen Fleming: The loan rate prescribed in the regulations. Practically all of those have been made at 5i per cent.


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


Some hon. Members:: Now.


Donald Methuen Fleming: Now, by leave.


John Whitney Pickersgill: By leave.


Donald Methuen Fleming: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



FARM IMPROVEMENT LOANS ACT


Donald Methuen Fleming: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Farm Improvement Loans Act to provide for the making of guaranteed loans during the period July 1st, 1962 to June 30th, 1965, and to establish four hundred million dollars as the limit of guaranteed loans that may be made during the new loan period.
Motion agreed to and the house went into committee, Mr. Martineau in the chair.


Donald Methuen Fleming: Mr. Chairman, the proposed amendments to the Farm Improvement Loans Act will serve to extend the operations under this legislation for a further period of three years. Briefly, it is proposed to provide for a new lending period beginning on July 1, 1962 and ending on June 30, 1965. It is also proposed to establish a limit of $400 million on the aggregate principal amount of guaranteed loans which may be made by the banks during the new lending period.
As hon. members are aware, this legislation is designed to make intermediate term credit more readily available to farmers for the purpose of financing a wide variety of capital improvements. To this end the act authorizes the government to extend a guarantee of 10 per cent of the farm improvement loans made by any one bank in a lending period. To limit the government's over-all contingent liability, the act establishes a maximum on the total amount of guaranteed farm improvement loans which may be made by all banks during the lending period.
The act came into force in 1945 and was given a life of three years. Subsequently it was extended through the addition of new lending periods. The first extension was made in 1948 and further extensions were made in 1951, 1953, 1956 and most recently in 1959. The current lending period, which is the sixth

since the inception of the act, began on April 1, 1959, and runs until June 30, 1962. The maximum on the total principal amount of loans eligible for the 10 per cent guarantee was originally set at $250 million and was increased to $300 million in 1953 and to $400 million in 1961. Originally, the maximum amount which might be borrowed by an individual farmer was set at $3,000; this amount was increased to $4,000 in 1953, to $5,000 in 1956 and to $7,500 in 1959. In reviewing the history of this legislation I might also point out that an amendment was introduced in 1959 to extend the act's coverage to include bee-keepers as eligible borrowers. The two amendments which are now proposed will enable the banks to continue their lending operations under the act for an additional three years.
During the post-war years, technological advance and the mechanization of farms have been dominant features of Canadian agriculture. In this process, farm improvement loans have played a major role by providing the farmer with loan funds, on reasonable terms and conditions, for the purchase of machinery and equipment. For example, in 1960 an amount of $58 million, or considerably more than one half of total farm improvement loans, was used for the acquisition of tractors, combines and hay balers. While the lending facilities under the act have been especially helpful to the farmer for purposes of mechanization, additional borrowing in substantial amounts took place in 1960, as in previous years, and covered a broad range of investment projects including the construction of farm buildings, the purchase of livestock as well as other works for the improvement and development of farms.
The annual report covering the operations under the act for the calendar year 1960 shows that the total amount of loans reached a record level of almost $102 million. There was a further increase in lending during 1961 and for this 12 month period more than 70,000 loans were made amounting to slightly over $108 million. No doubt, if it had not been for the drought in the west, the credit facilities under the Farm Improvement Loans Act would have been used to an even greater extent.
I might add for the purpose of providing a broader perspective on the growth of activities under the act, that during the current lending period from April, 1959 to the end of 1961, over 198,000 loans were made amounting to almost $294 million. This is approximately $55 million, or 23 per cent, higher than the amount borrowed during the whole of the preceding lending period from April, 1956 to March, 1959.
26207-1-96J
Farm Improvement Loans Act
I am sure hon. members will agree that this is a gratifying and enviable record. In this, the co-operation of the banks deserves much credit. Progress under the legislation has, of course, been encouraged by the guarantee on loans as well as the steps taken by the government in recent years to enlarge the scope of the act. I believe the soundness of the operations is attested by the fact that out of total lending of over $1.1 billion since the inception of the act, accumulated losses during this period amounted to roughly $1,356,000 of which some $134,000 has been recovered. Thus, the loss ratio is only slightly in excess of one tenth of one per cent of the total of loans made.
In conclusion, I should like to say that the provisions of the Farm Improvement Loans Act have been of great assistance to Canadian farmers in meeting their credit needs. The government's proposal for extending these operations for a further period of three years will I submit contribute to the wellbeing of our farm population and will help to ensure the development and improvement of Canadian agriculture.


William Moore Benidickson: We are only too happy to agree to the extension for a further three year period of a certain sum of total liability for which the Farm Improvement Loans Act will be available. The minister indicated that the last information in front of members of parliament refers to the calendar year 1960. However, I think some of his statistics embraced some activities in 1961. I hope the minister will indicate when we might have available the report for 1961. For the period of the next three years there will be a guarantee of $400 million rather than the $300 million which was the maximum for the previous three year period.
I have no information whatever as to what happened in 1961. If the minister gave us any statistics relating to 1961 I took it in listening to him that they were included in a three year statistical period. In 1960 the amount of lending was over $100 million. This indicates, of course, how worth while this measure is, which was introduced by a Liberal government as one of many to try to bolster the ordinary economy of the country after the cessation of hostilities that had taken so much of our attention prior to 1945. In 1960 there was a progression of lending to the extent that $101 million was lent under this splendid legislation. It is not intended by this amendment to change the purposes of the original act or to enlarge in any way the opportunities of farmers to borrow. The simple fact is that there has been a rising volume of loans under a stable set of terms. But if $101 million was lent-

Farm. Improvement Loans Act


Donald Methuen Fleming: May I ask the hon.
member a question? Has he overlooked the fact that the ceiling on individual loans was raised to $7,500 in 1959?


William Moore Benidickson: Yes, I am aware of that but I say that this amending legislation does not involve an increase in the ceiling on individual loans. In fact, on two occasions I had the honour of introducing amendments to the act which increased the ceiling.


Donald Methuen Fleming: You did not introduce the $7,500.


William Moore Benidickson: I should say that I did not introduce the bills. In 1953 and 1956 we increased the ceiling on the maximum loan that could be provided. As parliamentary assistant to the then minister of finance I had the honour of piloting the legislation through the house. One additional amendment of that nature was made by the present government in 1959. I acquiesce in that, but there is nothing of that kind in this amendment. I was about to say when I was interrupted that we have no information as to the volume of loans in 1961 unless the minister gives it to us before we pass the resolution, but if in 1960 loans amounted to $101 million is the minister prepared to assure the house that over a three year period $400 million will be adequate?
With the growth that has taken place in farm improvement loans it seems to me that perhaps we should not say that $100 million per year will be sufficient in 1962 or 1963. This legislation, of course, will be operative until June or July of 1965, and I question whether $400 million is adequate. If we have a rate of growth in loans such as we have fortunately experienced, it may become necessary to amend the act again. The amount of losses under this legislation, as the minister has said, has been amazingly low, one tenth of 1 per cent.


Paul Joseph James Martin: One half of one per cent.


William Moore Benidickson: One tenth of one per cent. It is just fantastic, and a great deal of good has been done by this legislation which was introduced originally by the government of the late Mr. Mackenzie King.
There is a stipulation in the act itself that, because all loans ultimately are guaranteed by the government, the farmer will not be charged a rate of interest higher than 5 per cent per annum simple interest. Despite the fact that we all appreciate and sympathize with the hazards of farming, I say that when the losses have been one tenth of one per cent

on over $1 billion lent since 1945 this indicates that with a government guarantee and with the good judgment exercised by the large number of branches of the commercial banks of Canada something of this kind can be done in other fields.
We have not got a fixed maximum rate of interest in connection with housing loans nor in connection with small business loans which we were discussing a short time ago. With this record under this legislation I say that there is something wrong with the fact that we have not got ceilings on interest rates on loans in connection with other segments of the economy such as small businesses.


Herbert Wilfred Herridge: Mr. Chairman, the members of this group wholeheartedly support this resolution to extend this very sound legislation which provides for medium and short term agricultural credit. I want to bring to the attention of the house the fact that the success of this legislation since it was first introduced in 1944 is clear evidence of the value of representations to governments from farm organizations. The farm organizations both on a national and a provincial scale have made representations to my knowledge with respect to legislation that would provide this type of credit, and for years those representations were made to no avail. With the very orthodox attitude that prevailed at that time there were certain queries as to the soundness of this type of legislation. I think that its success to date indicates two things, first, the soundness, integrity and industry of the farmers who have applied for loans in view of the very small rate of loss and, second, the soundness of the legislation.
Before taking my seat, Mr. Chairman, I want to draw attention to the interesting changing pattern of these loans. The report I have is for the year 1960. This is March, 1962, and I would comment that it seems to take a long time to get these annual reports before the house. However, this is the last one that we have at hand. In 1960 farm implement loans numbered 52,811 and the amount lent was $79,942,352, a very large total which clearly indicates that the larger percentage of these loans was made for the purchase of machinery in the prairie provinces particularly, where they use high cost machines such as combines and so on. Then we come to farm building loans. They numbered 5,196 and the total amount lent was $10,064,490, a considerably smaller sum. We anticipate that in the years ahead the percentage of loans for building purposes will increase in relation to those for farm machinery.
Livestock loans numbered 7,744 in the amount of $9,624,919. That clearly indicates

that the act has been of great value to the producers of livestock. Then we come to an interesting one which I particularly want to draw to the attention of the house. For clearing and breaking lands the number of loans was 608 in the amount of $462,773. In my opinion this is one field in which the act is not being taken advantage of by many farmers to the extent that it could be, because this is relatively a very small amount of loans for a whole year for the purpose of clearing and breaking land. Then we come to improvement and development and miscellaneous purposes. The total since 1945 is $13,360,728.


Paul Raymond Martineau: I regret to interrupt the hon. member but it is ten o'clock.


Herbert Wilfred Herridge: I have just a sentence or two, if the house will permit me.


Paul Raymond Martineau: Is the house agreeable?


Some hon. Members:: Agreed.


Herbert Wilfred Herridge: I would ask the minister if, in view of the changing patterns, it will be possible to have this act amended so that farmers will be able to borrow under its provisions for forest farm purposes and things of that kind. That is a direction in which there is a demand for at least medium credit and I believe consideration should be given to that demand in relation to other legislation adopted by the house. With those few words I again express our complete
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support for this measure and our satisfaction that the voice of the farmers was so sound in years past.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what we shall be doing tomorrow and Wednesday?


Gordon Minto Churchill: Tomorrow we shall take the four resolutions in the name of the Minister of Finance.


Paul Joseph James Martin: Will he be here?


Gordon Minto Churchill: We shall take the resolutions relating to the Farm Improvement Loans Act, the Fisheries Improvement Loans Act, the Crown Corporations and the Currency, Mint and Exchange Fund Act, in that order. No. 5 will be the resolution in the name of the Secretary of State for External Affairs dealing with the universal copyright convention. No. 6 will be Bill C-67 relating to a proposed railway line in the Gaspe peninsula, and No. 7 will be Bill C-38 dealing with statistical and other information relating to the affairs of corporations and unions.


Lionel Chevrier: Would the minister indicate what we shall be doing on Wednesday?


Gordon Minto Churchill: I shall indicate that tomorrow.


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


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The Canada-United States interparliamentary group concluded two days of discussion in Ottawa today. Twenty three members of the parliament of Canada and 16 members of the congress of the United States, representing all political parties, participated in the discussions. The Canadian delegation was led by the Speakers of the Senate and House of Commons, the Honourable Mark Drouin and the Honourable Roland Michener. The co-chairmen of the United States delegation were the Honourable George Aiken, senator from Vermont and the Honourable Cornelius Gallagher, member of the House of Representatives for New Jersey, assisted by the Honourable Laurence Curtis, member of the house for Massachusetts.
This was the sixth meeting of the group which held its first and organizational meeting in Washington in January 1959. Since that time, meetings have been held alternately in Canada and the United States. The fifth session was held in Washington in June 1961.
The United States delegates were welcomed at the opening plenary session on Thursday, March 1, by the Prime Minister of Canada, Right Hon. John G. Diefenbaker.
Committee meetings were held on both days. One committee discussed defence and foreign policy matters of mutual interest and the other discussed economic and boundary matters of concern to both countries. The agreed summary reports of the two committees which were approved at the final plenary session today are attached.
Members of both delegations and their wives were scheduled to leave Ottawa on Saturday morning for Montreal where they will visit the R.C.A.F. air defence command headquarters and attend a reception given in their honour by his Worship the Mayor and Mrs. Drapeau. While in Montreal the cochairmen will visit the city hall to sign the golden book. In the evening the members and their wives will attend a national league hockey game. Both delegations will return to their respective capitals on Sunday.

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Berlin and European Security
The committee opened its discussion with a consideration of the status of Berlin and the problem of European security. The discussion reflected no differences of opinion as to the Canadian and the United States approach to the Berlin situation and the basic position
from which any negotiations with the Soviet union should proceed. Major attention, therefore, centred around how the present difficulties arising over Berlin should be approached to reduce tensions with the Soviet union.
The rights accorded the west under the quadripartite arrangements must be maintained. Any search for an accommodation with the Soviet union must take into account three points upon which the west must stand firm-(1) the rights of the people of West Berlin; (2) the rights of the occupying powers to be in the city; and (3) the right of the western powers to have access to the city. Any negotiations with the Soviet union must seek to clarify the latter point so that there will be firm guarantees given the west to have access to the city not only by means of the present four air corridors but also of specific land, rail and water corridors.
The Berlin problem is symptomatic of the many large issues that must be carefully and thoroughly explored, first among the western powers and then with the Soviet union at the diplomatic level before the convocation of a summit conference.
China Policy
The committee noted that since the group's last meeting the question of the admission of a communist Chinese delegation to the United Nations had been considered and had been rejected but that the matter would again confront the next meeting of the general assembly. While neither Canada nor the United States has recognized the Peoples' Republic of China it was reported that there is a body of opinion in Canada which favours Canada granting recognition. There was no disagreement on the need to maintain the integrity of Taiwan but there was some difference of opinion as to the validity of a "two China" policy. The United States members stressed that Taiwan is important to the security of the United States and that the United States administration must always consider the effect of United States recognition on its allies in Southeast Asia, and for these and other reasons the United States opposes such recognition.
There was an extensive discussion of the question of trade with communist China. While there was complete agreement that there should be no trade in strategic goods, the two delegations were not unanimous in

their views as to trade in non-strategic commodities. The Canadian members were generally of the opinion that by such trade it was possible to keep open certain avenues of contact and further questioned the effectiveness of a trade blockade in weakening the position of the Peking regime.
The United States members were of the view that trade with communist China in any form serves to bolster the regime and facilitates its expansionist policies. The United States members, therefore, hope that the free world would be able to co-operate with the United States to the end that nothing be done which would strengthen or hasten the development of communist Chinese military capacities.
Defence Production Sharing
The committee noted the mutual military responsibilities of both countries for the common defence of North America and the endeavours under the Canada-United States defence production sharing program to achieve integration of their defence industries development and production capabilities. The continuing Canadian reliance on United States industry for a substantial part of major items of Canadian defence requirements is economically more acceptable in view of the improving trend of United States defence procurement in Canada.
It was recognized that it would probably never be feasible for the United States to obtain from Canada as large a proportion of United States defence equipment needs as the proportion of Canadian requirements which is purchased from United States industry. The increased participation of Canadian industry in United States defence requirements is achieving an improved pattern of cross-border defence procurement and desirable standardization of equipment. However, this increased activity is revealing difficulties preventing Canadian industry from contributing fully and it was agreed that efforts must continue to ensure that defence industries in both countries have equal opportunity to participate in western defence requirements.
The achievements of the defence production sharing program were commended as an outstanding example of the close cooperation which exists between the two countries and which should continue to receive the active support of both governments. It is important that public opinion in both countries recognize that this program is aimed at more efficient utilization of the industrial capacity in both countries to the benefit of mutual defence and economic interests.
Disarmament
The committee, noting that renewed disarmament negotiations are to begin in Geneva on March 14, expressed the hope that these would result in some progress. It also considered that there were some grounds for restrained optimism in this regard. The committee agreed that initially a good basis for the conference's work exists in the agreed statement of principles and that the participation of foreign ministers would be appropriate to lend additional guidance to the opening phase of the negotiations.
The question of United States resumption of nuclear testing was also discussed. The United States members pointed out any resumption would be undertaken reluctantly and in full awareness of the impact that this would have on public opinion even though devices tested would be held to the minimum in point of number and size. On the other hand the progress which the Soviet union has made in the field of nuclear armaments as evidenced by their series of tests last fall might leave the United States no alternative but to resume testing.
Canada and the OAS
The Canadian delegation expressed its appreciation for President Kennedy's pledge of support to Canada should it desire to become a member of the organization of the American states (OAS). The Canadian members explained the various considerations that have made Canada reluctant to assume the obligations of membership at this time.
It was noted by both the Canadian and United States delegates that Canada has displayed an increased interest in Latin American matters. This has been evidenced by the creation of a Latin American division in the Department of External Affairs, the establishment of diplomatic relations with all the Latin American nations, Canadian membership in the United Nations' economic commission on Latin America, and the assignment of observers at important meetings of the OAS.
There was support for Canadian presence at meetings of the OAS and other interAmerican organizations. It was also suggested that consideration be given to the appointment of a permanent Canadian observer at the OAS.
Cuba
The committee agreed that a communist Cuba is a serious menace in the western hemisphere which requires careful control and counteraction. It was noted that, as a result of recent policy review, the United States had now terminated all imports from
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and exports to Cuba with the exception of certain medical supplies. The United States members believed that a similar review and common policy of economic sanctions against Cuba by Canada and all western countries would serve to counter the communist threat. The Canadian delegation recalled that Canada has long since terminated any exports to Cuba of arms, and is rigidly controlling other exports to Cuba and is preventing any re-export of United States goods through Canada. This is a similar policy to that which was recently approved by OAS at Punta del Este.
The committee agreed that the policies of both Canada and the United States must be developed in the light of each country's long-range plans to counter the communist threat.
United Nations Bond Issue.
The committee was unanimous in its support of the United Nations at this difficult juncture in its history. In this connection the committee discussed the method and extent of meeting the United Nations financial obligations arising principally from its efforts to establish peace and security in the Congo. The committee discussed and explored the United Nations proposal to help meet these obligations through the sale of bonds. The failure of many members to meet their assessments has created a financial crisis.
The committee was of the opinion that the United Nations fiscal machinery should be made more efficient and more stringent control should be exercised over financial matters.

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Relations with the Common Market
The committee discussed the broad implications and the effects on Canada and the United States of European developments with particular reference to the United Kingdom's application for membership in the common market. The committee recognized that both Canada and the United States face special problems of trade arising from European regional arrangements. At the request of the Canadian delegation the United States delegation outlined the purpose and scope of new trade legislation now before the United States congress. The Canadian delegation expressed support for expansion of multilateral world trade by such measures as may be agreed upon and Canada's willingness to take a constructive part in this expansion.
Both delegations expressed the view that the commercial and agricultural policies of the common market following negotiation for their application to Canada and the United States should result in a fair and adequate access
for the industrial materials, agricultural products and manufactured goods of both countries.
The committee noted the contribution made by the commonwealth and the U.S.A. to world peace and stability.
The Canadian delegation emphasized the significance of traditional commonwealth trade links, including especially free entry into the United Kingdom market and the exchange of preferences. The committee clearly recognized throughout the discussions that it was for the United Kingdom alone to make a decision whether to join the European common market.
It was agreed that Canada and the United States have many common points of view and of interest and that, consequently, in any negotiations and measures undertaken or contemplated by either, this community of interest should be borne in mind.
Columbia River
The Canadian delegation outlined the present situation in Canada with regard to the treaty and1 pointed out that delay of Canadian ratification was related to differences between the federal government and the government of British Columbia. The Canadian delegation noted that it still remains the policy of the Canadian government to ratify the treaty as soon as possible.
The United States delegation observed that the United States had ratified the treaty and expressed the hope for early ratification by Canada. The United States delegation made reference to the urgent needs of the Pacific northwest for power which would require early decisions to be taken on alternative sources of power.
The Richelieu-Champlain Waterway
The committee took up the question of the Richelieu river-lake Champlain waterway. Such a waterway would cover a route of about 400 miles. It would reduce the water distance between Montreal and New York city by 1,200 miles, and between New York city and great lakes ports by a comparable distance.
The United States delegation outlined the history of this proposal, observing that this has been a water route since the earliest days of North America. The United States delegation also noted significant increases in cargo in past years on lake Champlain, and pointed out that development of the waterway would provide considerably greater access to the St. Lawrence seaway.
It was noted that both governments have proposed a joint submission of the question to the international joint commission.
The committee welcomed the report that this matter will be referred to the international joint commission and expressed the

view that the international joint commission should begin a study and submit its recommendations as quickly as possible.
Lumber Trade
The United States delegation noted that recent United States housing legislation has had the effect of increasing the market for lumber in the United States and resulted in the increasing importation of Canadian lumber. As a result the domestic market for United States lumber has been affected. United States shipping legislation (the Jones act) also has had the effect of raising the cost of shipping United States lumber from the Pacific northwest to the eastern seaboard.
There was a frank discussion of the problems outlined by the United States delegation and of the measures which might be taken to alleviate them.
It was apparent that the Canadian lumber industry was not free from problems of competition as well.
Point Roberts
The Canadian delegation outlined the situation that exists at Point Roberts, Whatcom county, Washington, a peninsula crossed by the international boundary (the 49th parallel) isolating the point from the state of Washington. The region is accessible only through Canadian territory or by sea and both countries maintain border crossing points. The area comprises some 5 or 6 square miles
and has a permanent population of some 200 people. Point Roberts is a popular residence for Canadians but difficulties are experienced because of the United States immigration regulations.
United States residents of Whatcom county recently urged the relaxation of United States immigration regulations so as to allow of easier entry by Canadian citizens, particularly those seeking to make the area their permanent residence by obviating the necessity of their becoming United States citizens.
The United States delegation pointed out that the highway between Haines and Whitehorse passes through a section of the Yukon territory making it necessary for people using the road to pass through two separate customs and immigration points.
The committee expressed sympathy for any arrangements which would provide for a satisfactory solution of such problems on the border.
Canada-United States Bilateral Air Agreement
The Canadian delegation drew the committee's attention to delays experienced in continuing discussions with the United States on Canadian-United States air transport relations and pointed out that as a result the Canadian authorities were unable to proceed with current studies of regional air traffic requirements in Canada.
The committee agreed that it would welcome an early resumption of negotiations on the bilateral air agreement.

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Sixth Session-Ottawa and Montreal February 28-March 4, 1962

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Names
Political	Committee
Affiliation State	No.
Senate
Hon. George D. Aiken (Chairman)	
Hon. Roman L. Hruska	
Hon. Pat McNamara	
Hon. Mrs. Maurine B. Neuberger	
Hon. Claiborne Pell	
House of Representatives
Hon. Cornelius E. Gallagher (Chairman)
Hon. Laurence Curtis	
Hon. William S. Broomfield	
Hon. William T. Murphy	
Hon. Robert N. Giaimo	
Hon. John M. Slack, Jr	
Hon. Harold T. Johnson	
Hon. Daniel K. Inouye	
Hon. Stanley R. Tupper	
Hon. Howard W. Robison	
Hon. James Harvey	
R	Vermont	1R	Nebraska	2D	Michigan	2D	Oregon	2D	Rhode Island	1D	N.J.	1R	Mass.	2R	Mich.	1D	111.	1D	Conn.	1D	W. Va.	1D	Calif.	2D	Hawaii	1R	Maine	2R	N.Y.	2R	Mich.	2
CANADA-UNITED STATES INTERPARLIAMENTARY GROUP Sixth Session-Ottawa and Montbeal February 28-March 4, 1962

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Senate
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Hon. Mark Drouin (Chairman)
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Mr. Frank McGee
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Mr. Maurice Johnson
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Mr. Terry Nugent
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Mr. R6mi Paul
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Tuesday, March 6, 1962