1962-10-25

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Ottawa, October 25, 1962.
Sir:
I have the honour to inform you that the Honourable Patrick Kerwin, P.C., Chief Justice of the Supreme Court of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate chamber today, the 25th October, at 5.45 p.m. for the purpose of giving royal assent to certain bills.
X have the honour to be, sir,
Your obedient servant,
A. G. Cherrier,
Assistant Secretary to the Governor General.



PRIVILEGE


Mr. Frank Howard (Skeena):: Mr. Speaker, I rise on a question of privilege concerning this house and all hon. members in it. My question of privilege involves an answer given yesterday to a question of mine, and may I preface it by pointing out that in Hansard for June 7, 1961, at page 5965, certain information was given in reply to a question by the hon. member for St. Denis indicating travelling expenses of the Postmaster General for the month of May to the extent of $317.33, and indicating that certain other transportation was provided for the Postmaster General free of charge by government services.
Yesterday the question I asked, and which was answered, was as follows:
Did any members of the cabinet incur any travelling expenses between April 1, 1962, and June 30, 1962, inclusive?
To this the answer was yes. The second part of my question read:
If so, for each member of cabinet, what was, for each day, the amount of expenses incurred, the point or place travelled to, and the purpose of the visit?
The answer to this was:
The information available does not permit an answer to be given to this part of the question.
I submit, by virtue of the fact that a somewhat similar question was answered in 1961, this information is available, and my question of privilege is that the government is withholding information from parliament relating to travelling expenses of cabinet ministers and accordingly should be censured for it.


Mr. Speaker:: The hon. member, having raised a question of privilege and I having looked at the matter, I feel that there is not here a true question of privilege. It perhaps might be a grievance and it may have been treated as a question of grievance on a previous occasion. I think I would leave it at that so far as the hon. member's raising of it as a point of privilege is concerned.


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I should like to make a short statement in regard to the Cuban situation. I do not intend to recapitulate the events of the last few days, all of which are known to hon. members. However, I think I should refer to President Kennedy's statement on Monday night that Russian action in placing missiles and bombers in Cuba threatens this continent and Central and South America. Indeed, the Soviet union by its action has reached out across the Atlantic to challenge the right of free men to live in peace in this hemisphere.
I think Canadians are in general agreement that these offensive weapons, located so contiguously to our continent are a direct and immediate menace to Canada. Furthermore, they are a serious menace to the deterrent strategic strength of the whole western alliance on which our security is founded. The result is that a threat is posed not only to this continent but to the NATO alliance as a whole, and indeed to all the free world, whose security depends to such an extent upon the strategic strength of the United States.
The United States government, as I have said on an earlier occasion, informed us of the facts of the situation and of the course of action proposed to be taken some few hours before President Kennedy made his announcement.

Crisis in Cuba
The government commenced immediately to consider the measures that the Canadian government and Canadian forces should take in order to be ready to deal with whatever eventualities would arise from this action. So that the attitude of the government will be clearly understood-and again I am asking for the support of the house as a whole in this connection-we intend to support the United States and our other allies in this situation.
It is a serious one. It has been necessary and will always remain necessary to weigh the risks both of action and inaction in such circumstances. I need not refer to the record of Canada in two world wars, in the NATO alliance and in Korea as demonstrating the fact that Canadians stand by their allies and their undertakings, and we intend in the present crisis to do the same. On the other hand, we shall not fail to do everything possible to seek solutions to these problems without war. We shall seek to avoid provocative action. Our purpose will be to do everything to reduce tension.
I think I should summarize some of the principal actions which have been taken by the government to date to deal with the question. The first, which was referred to by the Secretary of State for External Affairs, was to exercise a control over Soviet bloc aircraft bound for Cuba. He has explained these measures to the house in some detail; I would add simply that commencing even before the president's speech we had acted to ensure that Canadian air space and Canadian air transport facilities were not being used to carry arms to the Soviet bases in Cuba.
Second, all Canadian military forces have taken necessary precautionary measures to improve their readiness to meet any serious developments. The Canadian component of the NORAD forces has been placed upon the same level of readiness as the United States forces under NORAD operational control. Furthermore, as was stated by the Minister of National Defence, we have deferred any further movement of dependants of armed services personnel overseas. We have held up the authorization of any long leave for armed services personnel. The government today approved the measures which the forces would have to take in the event that the present crisis led to a more serious situation. Our civilian departments have been instructed as a matter of urgency to bring up to date the measures which they would need to take in any emergency. They are doing so. The ministers and key civilian officials have been asked to remain available during this period of crisis.

On other occasions I have informed the house of preparations for carrying on government should the worst occur. These preparations cover not only the public service but also provincial governments and municipalities which we have been financing and assisting with information and advice. I do not think I should go any further into detail in dealing with the measures which we have taken or would be prepared to take should circumstances require us to do so.
I wish the house and the Canadian people to know that the government has taken such precautions as are necessary at this stage to co-operate with our allies, and to be prepared for contingencies that might arise. As I said a moment ago, the government is seeking to find means by which the dangerous, threatening situation can be settled without recourse to arms. On the other hand, we recognize the fact that the free world as a whole cannot afford to permit its essential security to be endangered by offensive weapons mounted on bases adjacent to North America. As the Secretary of State for External Affairs said last evening during the course of his interview on the television facilities of the nation, we shall continue to do everything we can to avert the dangers to which we are exposed.
As far as the last twenty four hours are concerned, the main facts are well known to members of the house. Some Soviet ships have altered course away from Cuba. One Soviet tanker, after having been intercepted by a United States naval ship, was allowed to proceed on its way since it had been satisfactorily established that the cargo was petroleum.
I think we may take encouragement from the restraint being exercised at the moment. However, it would be dangerously premature to assume that the critical phase of the current situation has passed. There are two pressing needs to be met, namely not only to avoid conflict but to find a peaceful solution to this new Soviet challenge.
I think members of the house are in agreement that the greatest hope of finding such a solution lies in the United Nations. The acting secretary general is to be commended for the speed with which he has acted to discharge the heavy responsibility he bears as the executive head of the U.N. His proposal for a standstill is designed to gain the time that is so urgently needed while the search goes forward for some formula which will provide an acceptable solution. His offer of his personal good offices is in the best tradition of his predecessors in that office.

Meanwhile the security council is to meet again at four o'clock. There the formal discussions will be resumed. Perhaps by that time the replies of President Kennedy and Chairman Khrushchev will have been received.
There is a debate going on throughout the world regarding the legality of the quarantine measures which the United States has imposed. To my mind such arguments are largely sterile and irrelevant. We have a situation to face. Legalistic arguments, whatever they may be, cannot erase the fact that the Soviet union has posed a new and immediate threat to the security not only of the United States but of Canada as well.
Chairman Khrushchev's apologists say "What is the difference between Soviet missile bases in Cuba and United States bases on the periphery of the Soviet union?" The United States bases abroad have been installed only in response to the threatening pressures from the Soviet union, and have never been concealed from the public. The west, moreover, has refrained in recent years from any move to upset the world balance. There are countries in all parts of the world in which nuclear weapons could have been installed by the west. A deliberate decision was made not to do so. We in Canada have shown responsibility in this connection in order to avoid the proliferation of these dangerous weapons throughout the world. Sir, to compare the western activities with the provocative, clandestine arming of Cuba is to ignore the calculated restraint which has characterized western policy. In this light the call for the dismantling of these new, threatening facilities in Cuba is not unreasonable. It is the Soviet union itself which has disturbed the balance, and it is for it and Cuba to restore that balance.
The fact that we find ourselves in this dire situation may well have some salutary effect. Surely it is not too much to hope that some good will come out of the present dangerous situation. If these facilities were dismantled this would represent a first practical step on the road to disarmament, and if some such suggestion as I made a few days ago were coupled with international inspection of the process then we might well find ourselves taking the first steps away from the dangerous abyss that we have faced for so long in the world.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, I think all members of the house will have welcomed the statement made by the Prime Minister in informing the house of developments in this very serious situation. It is not an exaggeration to say that it is more than serious, it is grave. While
Crisis in Cuba
the gravity of the situation has certainly not increased in the last 24 hours, nevertheless the threat to peace remains and will remain until we can be satisfied that steps have been taken to remove the threat with which we are now confronted.
That threat, as the Prime Minister has pointed out, is in the extension of nuclear bases from those countries which now, unfortunately, have them to a country which has not had such a base, a country which this time happens to be in the western hemisphere. This constitutes an immediate threat to the peace and security of the hemisphere, especially in view of the circumstances under which these bases in Cuba are being constructed.
This extension, Mr. Speaker, has important implications going beyond this immediate emergency, implications which are important in the formulation of our own policy for defence, and implications which underline the importance of all countries, which do not now possess nuclear weapons doing what they can to prevent their extension. Perhaps this can be done by these countries at the United Nations agreeing on a self denying ordinance to prevent such extension. However, there is no chance as I see it, of lessening tension generally in respect of this and related matters, easing tensions in the cold war itself, until we can remove this immediate threat to peace which has been provided by the extension of nuclear bases to Cuba.
The vital question, therefore, as has been pointed out by the Prime Minister is, are these bases being constructed? Are they a threat to security and peace? Are they under Soviet control? I think the evidence shows, without any possibility of doubt, that the answer to all these questions must be in the affirmative.
This is a new development and it is a new danger. It is a danger of which the President of the United States warned us on September 4 and again on September 13, when he said, on September 4, that there was no evidence of Soviet military bases in Cuba or the presence of offensive ground to ground missiles. Then, and perhaps we did not attach as much importance to these words at the time as we should have, he went on to say "were it otherwise the gravest issues would arise". Well, Mr. Speaker, they have arisen. So the President of the United States felt compelled to act in the interests of the security of his own country, and indeed the security of the hemisphere.
As I have already ventured to say we who are the closest neighbour and in some ways the closest friend of the United States, at this time of grave emergency and threat to peace

Crisis in Cuba
must support that action. But as I have already stated outside the house, we can, while supporting that action which is considered necessary in the interests of security in the face of this threat, be very grateful indeed that the United Nations has been called into session at this time and that the security council is already meeting. We can be grateful that at the United Nations, our world organization, they are working, talking and negotiating to solve this problem in a way which will remove it as a threat to peace.
I think we can be grateful, as we have had cause to be grateful in the past, that with all its weaknesses, with all its frustrations, with all its failures, the United Nations, the world organization, is in existence today, and stands between humanity and destruction. I think we can also be grateful that the United States, which is the world's most powerful state, has not hesitated to bring this matter before the United Nations so that its action and its conduct can be considered by the representatives of 109 nations and a decision can be reached in the world forum as to that action.
Mr. Speaker, it has been said that what is sauce for the goose is sauce for the gander. When we hear statements like that it is perhaps just as well to remember that in 1956, when the Soviet union attacked Hungary with fire, sword and terror, the Soviet union did not bring its action to the attention of the United Nations. As many hon. members of this house know, it rejected the right of the United Nations even to look into that action. So, Mr. Speaker, while we can be grateful indeed for the United Nations intervention in this matter, I think we can also be grateful for the action taken by the United States in bringing its action to the United Nations. I think we can support, as the United Kingdom has supported and in every appropriate way, the position of the United States at the United Nations.
As I have already said, that does not mean, in the minds of many people, that all the details of that action are to be approved without qualification. Many people, friends of the United States and anxious to support the United States, may question some of the arguments used and indeed some of the action taken. But while that may be true, that is not so important as the necessity of rallying round our neighbour and our friend as members of the North Atlantic alliance around a friend which is a free and democratic nation; where there is an open society, where people can make up their minds and public opinion can express itself; which has a society that is not imperialistic in design and is not imperialistic in action.

Mr. Speaker, I think it must be an encouragement to all of us that the position I suggest should be taken, to which the Prime Minister has already referred, is a position taken by every member of the organization of American states, a good many of whom have been critical of many aspects of United States policy in Latin America and indeed in Cuba. It is a comforting fact and it makes, I think, for peace and security, that the western hemisphere is united in the broad issue before the United Nations in this present threat to peace and security.
There is one other aspect of the question which the Prime Minister has mentioned. The United Nations has intervened. The secretary general, in a way which reminds us of the attitude adopted by his great predecessor, has intervened with wisdom and restraint and has put forward to the security council on behalf of, I think, 44 Asian and African members-a great number of Asian and African members-a proposal which may prevent the situation from deteriorating while a solution for the broad problems can be found.
Very often-and the history of the past world war has shown this-it takes this kind of crisis in order to find solutions which go beyond the crisis itself. So perhaps out of this danger and out of this threat we can find solutions to problems which it would have been impossible to find in other atmospheres. The secretary general has perhaps shown us how this can be done. He has indicated that the United Nations could intervene at this time through a resolution which is a kind of stand-still resolution, under which the United States would abandon its blockade and the U.S.S.R. would abandon the shipment of military supplies to Cuba for a period of time. During that period of time perhaps a solution can be found, not only to the immediate problem but to related and perhaps even more important problems.
This seems to me to be a very constructive and encouraging development. But I suggest that it would have far more chance of success if it could be supplemented by some proposal which would ensure that any obligation undertaken by those concerned would be carried out. The particular proposal indicates that there would be an obligation on the United States to abandon the blockade, which obligation could not be broken without it being known at once. It is almost a self-enforcing obligation. But the obligation on the other side, not to send military supplies to Cuba, is one that could be evaded unless there were facilities for control and inspection.
There is something therefore that the Canadian delegation, if the opportunity arises

at the United Nations, could do. There could be a supplementary proposal to set up immediately a United Nations naval inspection force to make sure that any obligation of this kind, undertaken with a view to giving time and opportunity for finding a solution to the basic problem, was carried out. While that is being done a United Nations naval inspection force could be brought into action to reassure people who might question whether the word of a Soviet government should be accepted, even in respect of an obligation of this kind. This would give the kind of reassurance which United Nations inspection and control has given in the past and which I think could be given in the future.
This is one possibility that might improve the situation, and I have no doubt there are others. It is good to know that the Canadian government in this situation is working, as it is working, to bring about a strengthening of peace and security, to remove the awful threat of war. It is good to know that the Canadian government is right behind our friend and neighbour, the United States, in this issue.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, it is indeed reassuring to us in this house, as I believe it is also to all Canadian people and as it will be to the friends of peace across the world, to hear the Prime Minister speak in the terms he has just used. I think one of the basic prerequisites of peace in our time is that we realize and understand the obligation we have to our friends and neighbours. It is only as we stand together with those who hold the same ideals and cherish the same way of freedom that we have in this country that we can have any hope of standing against the onslaught of communism in our time.
There can be no compromise between right and wrong; let us understand that. Coexistence with communism, in the end, means submission. But the objective of submission held by the ideological forces which oppose us at this time is not to be gained through the use of force, even as a bully in a school yard attempts to gain his way by force over his school mates. It is to be gained through a neutralizing of resistance, through passiveness. I believe there is no intolerance so vicious and so strong in reaching its objective as the intolerance of neutrality. I am pleased to hear the leader of the government, the Prime Minister, speak as he has spoken in this regard. The brain washing technique reaches its objective through the neutralizing of resistance so far as the mental attitudes of its victims are concerned.
Crisis in Cuba
Let us remember that we are a nation. We are a sovereign nation, a nation that has every right to be proud of its heritage. We are a nation that today has its responsibility, a responsibility which will increase with every passing day in all the tomorrows. This does not mean hostility or an attitude of contentiousness toward those who are on the other side of the fence.
I believe we as Canadians have a great potential to take a quiet, determined stand on what we know is right, and for which the world today looks in its quest for peace.
I am also sure we all agree that the efforts being put forward at present by the United Nations are most important. It is again reassuring to know that our delegation at the United Nations is doing everything within its power to further the action taken by the United Nations and the influence which the United Nations can have at this time.
In addition to the direct approach of the United Nations, which is now taking place, there is also a real opportunity for us to use our influence among those nations which may not be committed in the same way we are. Many of us individually probably have the opportunity to do this in what may seem to be little ways, but as a nation we have a great opportunity. Let us remember that the cost of friendship is friendliness, and friendliness is a force we must use at every opportunity.
It is also gratifying to note the unanimity that has been expressed through the organization of American states, and I suggest to the government that this is an ideal time for us to take our stand with our neighbours in this hemisphere and become a participating member in that organization. Certainly the first step could be taken in that regard by very determinedly making our own influence felt and moving in that direction now.
Let us just not say we are backing the United States and then sit down, pat ourselves on the back and think we have done something. We as Canadians have respect for our own sovereignty, and we support the United States as our friends and best neighbours. We do not do so as a vassal state or as a weak neighbour. We do it because we are Canadians, citizens of the sovereign state of Canada. Let us stand together in this house as Canadians. Let us stand together on our policy as Canadians, remembering that we do not have to bend ourselves to all the whims of those who are much more powerful than we are. Let us remember that we have an opportunity to give leadership at this time and, as the leader of the official opposition stated, perhaps it takes a crisis like this to bring out that leadership. Today the world is looking for leadership, leadership other than that

Crisis in Cuba
which is being given by the two great opposing forces in this world conflict. As Canadians we have an opportunity to give hope and leadership to many of the smaller nations that are not able to stand as we do today. Let us make sure we fulfill our obligation in that regard.
Let us also remember that in this chess game of international politics, where one nation is lined up against another on either side of the wall that divides us into two camps, we are not dealing just with nations that are represented by governments. We are dealing with governments that in themselves are representative of millions and millions of people, people like you and I, people who need to live and who want to live, people who look for peace as we do, and among them are the people on the other side of the fence. As we try to solve our problems and speak about these things, let us remember we are doing so on behalf of millions of people whose lives mean as much to them as do ours to us.
I was reminded of a statement the other day, which perhaps it is fitting to use here, and which says "It is better to be fed than red." In this context we have a chance to give leadership in our own hemisphere, a chance to reach out at this time to those nations that are not so fortunate as we are, and through our tremendous potential for good will and material wealth, provide those things which are necessary for people to live. Also it is to see what more we can do for our neighbours to draw them into that neighbourhood of nations which can do so much in the western hemisphere. Let us move on to assist many of the countries in Latin America which need assistance and which are looking for leadership.
In this crisis every red blooded Canadian understands that the issues are grave. Actually we are at war. We have not wanted to admit that down through the years, but the cold war we have been fighting during the last 12 years-indeed, since the end of world war I if we care to go back that far-is just as much a war and is just as grave as any war in which we have been involved. It is a war not necessarily fought with armed military might, but the forces used are just as decisive in the end.
Therefore in our struggle and our quest for peace we come back again to the issue which has been exemplified in the statement given us today by the Prime Minister. We must stand with our friends for what is right, and we must do everything possible to develop and further cultivate the peace which this world must have if it is to survive at all.
[Mr. Thompson.!


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, since my statement on Monday evening last, which I made on behalf of this party, in which I briefly outlined our general approach to the Cuban crisis and emphasized our hopes, the members of this party have had an opportunity to obtain the facts, to obtain information, and to assess that information and those facts. Let me emphasize that members of this group come to their decisions with the knowledge of their responsibility to the Canadian people and their responsibility to the many millions of people referred to by the leader of the party opposite.
We had hoped to present our views to the house before now, particularly yesterday which we thought would have been a most appropriate opportunity, being United Nations day, to give a detailed exposition of our views with respect to this most unfortunate crisis. Nevertheless, Mr. Speaker, we welcome this opportunity to make a statement on the Cuban crisis in line with our long time over-all policy on external affairs.
Members of the house know the policy of this group with respect to disarmament, with respect to nuclear weapons, with respect to nuclear testing, and they know the confidence and faith which this group has expressed in the United Nations as the body to which all these problems should be directed.
I wish to emphasize that we seek no partisan advantage from this unfortunate crisis, but present our views and our proposals in the firm conviction that they are in the best interests of the Canadian people and will make a contribution toward the promotion of world peace.
Some people still cling to the fetish that Canadians must never rock the boat of United States foreign policy. With that point of view the members of this party differ sharply, and we consider it our duty and responsibility to suggest another course when we believe that the present one is likely to land us on the rocks of international suicide.
In our opinion, Mr. Speaker, the present course being pursued by the United States may result in a propaganda victory for Mr. Khrushchev and mark him as a peacemaker in the eyes of many nations in the world. I might direct your attention, Mr. Speaker, to the fact that even today's editorial in the Globe and Mail suggests this. If I may quote briefly from that editorial it says:
He can pose as the peacemaker turning the other cheek to United States aggression.
Let me say, Mr. Speaker, that we agree with the remarks of the leader of the official opposition with respect to the tragic situation that occurred in Hungary. But also

let me say that two wrongs do not make a right. Let me emphasize, Mr. Speaker, that our party has always been opposed to unilateral action by any power. Therefore on that account we regret Soviet action in installing missile bases in Cuba, and we are very critical and unhappy about the fact that the United States government has decided upon a course of action which could easily lead to the most serious consequences without first bringing the whole matter of these missile bases to the attention of the United Nations.
Indeed, Mr. Speaker, it would seem to me from answers given by the Prime Minister to questions asked in this house that the government of our friendly and powerful neighbour decided on its course of action without consulting its nearest neighbour, Canada, or its NATO allies, but merely informed them of the action decided upon. I emphasize-and no one can properly contradict me-that this is a flagrant violation of the terms of the north Atlantic treaty. The President of the United States has ignored the consultative machinery of the North Atlantic Treaty Organization. Its members were not asked for their opinion or advice; they were simply and baldly told what the United States intended to do, and to that course of action in the present world situation we take the strongest exception.
The Cuban situation has, of course, highlighted two or three present international problems. It has served to underline the correctness of our policy in opposing the spread of nuclear weapons, and therefore opposing nuclear weapons on our soil or in the hands of Canadians elsewhere. It is abundantly clear that the security of Cuba has been seriously harmed by the installation of nuclear bases, and that the threat to peace has been immensely increased. This is precisely the result which the New Democratic party has foreseen would inevitably follow the spread of nuclear weapons, and this is why we have consistently and strongly opposed any further dispersal of nuclear arms on the part of anyone. The installation of Soviet bases on Cuban soil has also focused attention on the fact that there are United States bases, and those of other nations, in many lands across the world, bases which are considered an ever present threat by others-and we can understand that-as the bases in Cuba are considered to be on this continent.
Now, Mr. Speaker, in all seriousness we urge that the crisis which has been created in recent days should be used by all nations, including the U.S.S.R. and the United States, to grapple with the whole problem of military bases, and particularly nuclear ones, and to
Crisis in Cuba
seek a policy of gradual dismantling of such bases everywhere as another step toward disarmament. The crisis in the Caribbean has served to take off the front pages of our newspapers the reports of fighting on the Indian-Chinese border, but we must recognize that that conflict is a part of the general unrest in the world today. It is another example of unilateral action by a nation, this time communist China, against a friendly neighbour. Unfortunately, however, Mr. Speaker, it is not possible to take the usual steps in the United Nations to condemn China's action in the Himalayas and demand a cessation of hostilities there, because the People's Republic of China has not been admitted to, and is not a member of, the United Nations. This is a matter which I think we have cause to regret at this time and will continue to regret under the developing circumstances of the world.
However, it is not enough merely to regret what has happened, from the point of view of the members of this party. We must find a way out; and my major purpose, Mr. Speaker, in rising on behalf of this group today is to make some positive proposals. There are some who say that the United Nations is helpless when conflicts occur between large powers. This party is not prepared to accept that, because there is no other road to peaceful settlement of international disputes except that provided by the machinery of the United Nations.
Therefore, Mr. Speaker, we propose that Canada should immediately seek support for a resolution to be presented at the security council and, if necessary, later to the assembly of the United Nations, under the terms of the special resolution respecting uniting for peace, that would look for the removal of the immediate threat to peace in the Caribbean so that time might be bought for necessary negotiations-and time is the essence of this very dangerous situation.
We claim, Mr. Speaker, that such a resolution should propose that the U.S.S.R. and the U.S.A. act immediately and simultaneously to turn Soviet ships away from the direction of Cuba and to remove the United States blockade from the Caribbean. If that is accepted it might be necessary to have some ships from other countries police the shipping lanes to make certain that the two big powers carried out their undertakings.
Mr. Speaker, the members of this group, and I may say many members in this house, were very pleased to see in the Gazette this morning the request by U Thant asking the U.S. and the U.S.S.R. hold up on Cuba, making a proposal somewhat similar to the one we are making today to which we gave consideration some days ago. Such a United

Crisis in Cuba
Nations resolution should also include a section which recognizes in the strongest terms the integrity of Cuba and seeks to remove any fears which Cubans have, and which we can understand, as a result of past actions.
In our party's view, some such concrete and positive step must be taken by the United Nations. The world organization has succeeded in limiting and in stopping local conflicts. It has done excellent work in that respect throughout the years when smaller nations were involved. It is now facing the supreme test as to whether it can be effective also when the two great powers are concerned. No one can believe, Mr. Speaker, that either the United States or the Soviet union would wilfully risk the destruction which would occur from a thermonuclear war. In this, in our opinion, lies the hope that energetic, prompt and constructive action by the smaller powers, such as Canada, through our government, and through the United Nations may not only save the world from the horrors which threaten it, but may also begin to lay the basis for a stronger world organization and for a lasting peace.
In conclusion, Mr. Speaker, let me say that if the Cuban crisis has done nothing else it has underlined in such a terrifying way the frightful peril in which mankind has stood ever since the invention of nuclear weapons, and that at long last the whole world, including the two great nuclear powers, must be convinced that war is an impossibility unless the human race is prepared to commit suicide. This grim and frightening occasion must be seized on now, while the terror is fresh in people's minds, as an opportunity to press forward with the dismantling of all missile bases throughout the world, which will mark the beginning of a permanent retreat from the awful abyss which opened up this week when the United States gambled with the lives of all of us in its struggle with the U.S.S.R.



HEALTH AND WELFARE


Hon. Michael Starr (Minister of Labour) moved: for leave to introduce Bill No. C-70, to provide for the safety of persons employed in federal works, undertakings and businesses.


Mr. Knowles:: Explain.


Michael Starr: Mr. Speaker, the purpose of this bill is to promote the safety and well being of persons employed in works, undertakings and businesses within the federal jurisdiction.
[Mr. Herridge.l
It is aimed at reducing manpower loss, personal suffering and the substantial costs resulting from work accidents.
Motion agreed to and bill read the first time.



FORT RAE, N.W.T.-CONTAMINATION OF DRINKING WATER

[Stage Direction]
On the orders of the day:
Mrs. Isabel J. Hardie (Northwest Territories):: Mr. Speaker, I wish to direct a question to the Minister of Northern Affairs and National Resources, of which I have given him notice. My question is based on an editorial in the News of the North which deplores the tragic death of seven people of Fort Rae since June due to drinking contaminated water. Can the minister inform the house what steps the government is taking to provide sanitary protection to the people of this northern area?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, I want to thank the hon. lady for giving me notice of her intention to ask this question. This has made it possible for me to get the necessary background information. The reports I have received indicate that an outbreak of dysentery occurred at Fort Rae this summer as a result of the drinking of contaminated water. As the hon. member knows, the provision of pure drinking water has been a serious problem in northern communities over the years. This is largely due to the presence of permafrost which brings about epidemic problems from time to time.
In the case of Fort Rae the outbreak was tackled immediately by the Department of National Health and Welfare and the territorial government. In addition to the medical measures, an educational program has been undertaken to impress upon residents of the settlement the danger of using local ground water supplies for drinking and cooking purposes, and also to instruct them in boiling and chlorinating-


Mr. Speaker:: Order. With all due respect to the hon. member who asked the question and to the minister, having regard to the question that was raised and the length of the answer forthcoming I think it would have been better to put the question on the order paper.



LABOUR CONDITIONS


Michael Starr: that the house go into committee at the next sitting to consider the following

resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure respecting industrial change and manpower adjustment: to provide for the organization and maintenance of a manpower consultation service: to provide also for the payment of assessment incentives for carrying out manpower adjustment programs; to provide further for the entering into agreements providing for the payment by Canada respecting a labour mobility incentive; and to establish a council called the "Advisory council on industrial change and manpower adjustment" and to provide for the chairman's remuneration and for certain expenses of the members of the council.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Hon. Paul Marlin (Essex East):: Mr. Speaker, may I ask the Secretary of State for External Affairs a question which arises out of the television interview to which he subjected himself last night over the Canadian Broadcasting Corporation television facilities. My question is this. Will the minister explain what he meant when he said that NORAD is not involved in this Cuban matter?


Hon. Howard C. Green (Secretary of Stale for External Affairs):: I would hate to be obliged to explain to the hon. member for Essex East all the things I said last night. It would take more than 40 minutes to do so, and I do not intend to undertake that job today.


Mr. Chevrier:: That is not the way in which to answer the question, certainly not under these circumstances.


Paul Joseph James Martin: In view of the importance of this matter, Canada being the other member in NORAD, and having in mind what the Prime Minister said today about preparations being taken by NORAD, does the minister not think that he should explain to the house precisely what he meant by last night's statement?


Howard Charles Green: If the hon. member would read the rest of the part of the statement dealing with the subject he would find it explained that NORAD is part of the North Atlantic Treaty Organization itself and that NATO was not directly involved in this trouble in the Caribbean.


Paul Joseph James Martin: In view of the importance of this matter may I ask the minister what he meant by saying that NATO was not directly involved and that NORAD was not at the moment involved. I ask this in view of the statement made today by the
Inquiries of the Ministry Prime Minister and by the President of the United States wherein a contrary view was expressed.


Howard Charles Green: NORAD is a defence set up against air attack.


Paul Joseph James Martin: NORAD carries on other activities.


Howard Charles Green: I suggest that the statement I made last night was in accordance with the facts.


Hon. Paul Hellyer (Trinity):: I should like to direct a question to the Minister of National Defence in order to clarify the statement of the Prime Minister to the effect that Canadian elements of NORAD are now at the same stage of readiness as the United States elements. Does this mean that the Bomarc squadrons have been armed, or was the Prime Minister's statement just an exercise in words?


Hon. D. S. Harkness (Minister of National Defence):: Mr. Speaker, I think the hon. member on reflection will feel that perhaps he should not have phrased his question in that way. The two Bomarc squadrons, one of which at La Macaza is not yet completed, have not been armed with nuclear weapons, if that is the answer he is looking for.


[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: I should like to address a question to the Prime Minister. In doing so may I say it is possible that I missed a point mentioned in his statement to the house this afternoon. My question is this. Has the government instructed the Canadian delegation to the United Nations to communicate to the acting secretary general its support of his urgent appeal for a 14 day freeze during which all Soviet ships bound for Cuba would be halted by Premier Khrushchev, and President Kennedy would suspend the United States blockade of Cuba?


John George Diefenbaker: Mr. Speaker, I suggest that the question be directed to the Secretary of State for External Affairs.


Francis Andrew Brewin: I should be glad to redirect the question, Mr. Speaker.


Michael Starr: Read it again.


Francis Andrew Brewin: Has the government instructed the Canadian delegation to the United Nations to communicate to the acting secretary general its support of his urgent appeal for a 14 day freeze during which all Soviet ships

Inquiries of the Ministry bound for Cuba would be halted by Premier Khrushchev, and President Kennedy would suspend the United States blockade of Cuba?


Howard Charles Green: No, Mr. Speaker. This proposal by the acting secretary general is still under consideration by the government.


Francis Andrew Brewin: I have a supplementary question. Will the Secretary of State for External Affairs assure the house that consideration will be given to this matter?


Mr. Speaker:: Order. I think the minister answered that the matter is receiving consideration.


Francis Andrew Brewin: Thank you, Mr. Speaker. (Translation):



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Real Caouette (Villeneuve):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Could the minister tell us whether it is true that, in several provinces, especially in the province of Quebec, the taxation system concerning private power companies and publicly-owned corporations is such that some consumers have to pay more taxes than others?


An hon. Member:: Some calves have lost their mother.


Mr. Speaker:: I am afraid the question is improper since the hon. member is expressing an opinion. After giving the matter some consideration, he might want to correct it or have it inserted on the order paper.
(Text):
I recognize the hon. member for Greenwood.
(Translation):


David Réal Caouette: A supplementary question,
please.


Mr. Speaker:: I regret to inform the hon. member that since his question was out of order, no supplementary question is admissible.


David Réal Caouette: Mr. Speaker, I rise on a point of order.


An hon. Member:: There are no standing orders for him.


David Réal Caouette: I rise on a point of order. The minister knows full well what I am talking about.
(Text):


Mr. Lewis:: I rise on a point of order, Mr. Speaker. You recognized the hon. member for Greenwood.


Mr. Speaker:: At the moment three persons are on their feet, and the Speaker has the floor.
(Translation):
I point out to the hon. member that he cannot ask a supplementary question when the first one has not been answered. As his first question was out of order, he is not allowed a supplementary question.
I have recognized the hon. member for Greenwood. If the hon. member has a question to ask later on, he shall be able to do so if it is in order.


David Réal Caouette: Then I shall put my question differently. Can the Minister of Finance tell us whether the government intends to abolish, once and for all, this ridiculous tax which is a burden for power companies in the province of Quebec?
(Text):


Hon. George C. Nowlan (Minister of Finance):: Mr. Speaker, this is obviously a taxation matter, and one for a budget. I am very happy that I do not have to bring in a budget at the moment because I might be accused of intervening in a provincial election in a certain province of Canada. When the time comes to bring in the budget this matter will be given careful attention.
(Translation):


Mr. Gregoire:: A supplementary question, Mr. Speaker. Does the Minister of Finance not think that it will be too late to consider this matter when power companies are nationalized?


Mr. Speaker:: Order. I think that the hon. member is asking the minister for an opinion, which is out of order.
(Text):



FREE ENTRY OF AUTOMOBILE AUTOMATIC TRANSMISSIONS

[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, may I ask the Minister of Finance if the questions I asked the other day on the order paper regarding automatic transmissions can be answered today or at the latest by the end of the week because, as he knows, the order in council providing for the free entry of these automatic transmissions terminates at the end of this month.


George Clyde Nowlan: Mr. Speaker, long experience in this house has indicated that no one has any control over the hon. member for Essex East with respect to the questions he may ask, and far be it from me to suggest that I could. In any event, as he says, on October 31 either action will be taken with respect to renewing
[Mr. Brewin.1

the order in council or it will not be taken, and the house will then know what the situation is.



CIVIL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. S. P. Ryan (Spadina):: Mr. Speaker, I should like to direct a question to the Prime Minister. Having regard to the present international crisis, is the government planning the building of public fall-out shelters in this country?


John George Diefenbaker: Mr. Speaker, the government's stand in connection with fall-out shelters and the like was fully set out during the discussion last session. There has been no change in viewpoint in the meantime.


Paul Theodore Hellyer: Mr. Speaker, I should like to direct a question to the Minister of National Defence or to the Prime Minister. Has a communication been received from the chairman of the metropolitan Toronto emergency measures organization regarding confusion as to what to do about civil defence? Can the emergency measures organization here supply a set of clear instructions for the benefit of the many callers who are simply told "Keep calm"?


Douglas Scott Harkness: Mr. Speaker, I have no knowledge of any such communication and I do not think there is any basis for the allegations that have been made as to a state of confusion.



TELEVISION


[Stage Direction]
On the orders of the day:
Mr. Jack Davis (Coasi-Capilano):: Mr. Speaker, I should like to direct a question to the Minister of Transport of which I have already given him notice. As all the equipment and personnel are available, can the minister please tell the house why it is still impossible for 15,000 residents in the Powell River area to receive television programs broadcast over channel 8 in Vancouver, B.C.?


Mr. Speaker:: Order. This is a question that should be on the order paper.
Inquiries of the Ministry CANADIAN NATIONAL RAILWAYS



REPORTED REDUCTION IN TRANSCONTINENTAL SERVICE

[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to ask the Minister of Transport a question. It relates to a number of questions that have been asked over the past month with regard to the cancellation of certain C.N.R. trains when the time card changes take place this week end. Because of the time card changes being so close I should like to ask the minister whether he has had any indication at all that the C.N.R. has reconsidered these major changes, particularly with regard to trains Nos. 3 and 4, with a view to cancelling or postponing the changes?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, from time to time I have received representations from different associations and different persons on the matter of various changes all across Canada in the timetable of the crown company. All these requests have been passed along to the management of the C.N.R., which I am assured has considered all these matters very carefully. I have had an opportunity to discuss the matter with the president of the C.N.R., and I can assure the house that whenever a decision has been taken in this direction it has always been taken after very complete consideration of the particular case. With respect to abandonment of service and abandonment of stations, this matter is under the authority of the board of transport commissioners.


Douglas Mason Fisher: A supplementary question. Can the minister tell whether the C.N.R. is going to go ahead with the cancellation of trains Nos. 3 and 4, particularly between Saskatchewan and Winnipeg?


Léon Balcer: I will have to find out exactly. (Translation):



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
"commentaries"
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I wish to put a question to the Secretary of State. Would he tell the house if he intends to investigate the program called "Commentaires", that the C.B.C. French network broadcast in relation to the events that took place in Cuba recently, in which opinions expressed were often at variance with opinions heard in this house?
Income Tax Act

(Text):



CUBA-INQUIRY AS TO CHANGE OF POLICY

[Stage Direction]
On the orders of the day:
Mr. E. T. Asselin (Notre Dame de Grace):: Mr. Speaker, I should like to address a question to the Minister of Trade and Commerce. In the light of the Prime Minister's statement today can the minister say whether his department has taken any special measures with regard to the shipment of materials to Cuba?


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, I feel sure that the hon. member and other members of the house know that shipments to Cuba are made in strict conformity with the strategic list as decided upon by the NATO nations, and no strategic materials of any kind are permitted to be shipped to Cuba.



WAYS AND MEANS

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

[Stage Direction]
Resolved,

that it is expedient to introduce a measure to amend the Income Tax Act to provide among other things:
1.	That for the 1962 and subsequent taxation years the amount deductible in computing taxable income in respect of a child qualified for family allowance be increased to $300 and the amount deductible in respect of other dependants be increased to $550 each.
2.	That with respect to income earned after March 31, 1962 a corporation whose principal business is manufacturing or processing (not including a corporation whose principal business is shipbuilding, mining, logging or the operation of oil or gas wells) be allowed to deduct from its tax otherwise payable an amount equal to 50 per cent of the tax on the first $50,000, of its taxable income attributable to increased sales and an amount equal to 25 per cent of the tax on the remainder of its taxable income so attributable.
3.	That with respect to its first taxation year ending after April 10, 1962 and the next succeeding four taxation years a corporation be permitted to deduct in computing income 150 per cent of the amount by which expenditures of a current and capital nature on scientific research in Canada incurred by it in the year exceed expenditures of a current and capital nature on scientific research in Canada incurred by it in its last taxation year ending on or before April 10, 1962.
4.	That for the 1962 to 1966 taxation years both inclusive the deduction from tax allowed to corporations in respect of taxable income earned in a province be increased from 9 per cent to 10 per cent in a prescribed province in which arrangements exist for the replacement of federal grants to universities by additional provincial grants in accordance with the proposed amendments to the Federal-Provincial Fiscal Arrangements Act.
5.	That with respect to taxation years commencing in 1962 a taxpayer be allowed a deduction from tax of an amount equal to the lesser of two-thirds of the amount payable for the year to a province as a tax on income from logging operations or § of 10 per cent of the taxpayer's income from logging operations in the province, and the right
[Mr. Gregoire.l
to deduct in computing income amounts paid to a province as tax on income from logging operations be repealed.
6.	That with respect to expenses incurred after April 10, 1962 any corporation be allowed to deduct in computing income the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by it on or in respect of exploring or drilling for petroleum or natural gas in Canada and the prospecting, exploration and development expenses incurred by it in searching for minerals in Canada not exceeding its income for the year from oil or gas wells in Canada.
7.	That with respect to expenses incurred after April 10, 1962 an individual be allowed to deduct in computing income the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by him on or in respect of exploring or drilling for petroleum or natural gas in Canada not exceeding his income for the year from oil or gas wells in Canada.
8.	That with respect to acquisitions after April 10, 1962 amounts paid by
(a)	a corporation whose principal business is production, refining or marketing of petroleum, petroleum products or natural gas, or exploring or drilling for petroleum or natural gas, or mining or exploring for minerals,
(b)	an association, partnership or syndicate formed for the purpose of exploring or drilling for petroleum or natural gas,
(c)	a corporation (other than a corporation that qualifies under (a)), or
(d)	an individual for a right, licence or privilege to explore for, drill, or take petroleum or natural gas in Canada shall be classed as drilling or exploration expenses for purposes of computing deductions from income.
9.	That with respect to sales of property acquired after April 10, 1962 there shall be included in the income of a taxpayer any amount received as consideration for the disposition of a right, licence or privilege to explore for, drill for or take petroleum or natural gas except where the right, licence or privilege was acquired by inheritance or bequest.
10.	That the right of a successor corporation to deduct drilling, exploration, prospecting and development expenses incurred by a predecessor corporation from the income of the successor corporation attributable to the production of petroleum or natural gas from wells, or the production of minerals from mines, situated on property acquired from the predecessor corporation shall not be lost by reason of the fact that the successor corporation assumed liabilities of the predecessor corporation.
11.	That a joint exploration corporation may renounce an appropriate share of the drilling, exploration, prospecting and development expenses incurred by it after 1956 in searching for oil, gas or minerals in Canada in favour of a shareholder corporation whose principal business is
(a)	production, refining or marketing of petroleum, petroleum products or natural gas, or exploring or drilling for pretroleum or natural gas,
(b)	mining or exploring for minerals,
(c)	processing mineral ores for the purpose of recovering metals therefrom,
(d)	a combination of
(i)	processing mineral ores for the purpose of recovering metals therefrom, and
(ii)	processing metals recovered from the ores so processed, or
(e)	fabricating metals,
and in such case the expenses renounced shall be deductible by the shareholder corporation and not by the joint exploration corporation.
12.	That the right of a successor corporation to deduct drilling, exploration, prospecting and development expenses incurred by a predecessor corporation from the income of the successor corporation attributable to the production of petroleum or

natural gas from wells, or the production of minerals from mines, situated on property acquired from the predecessor corporation be extended to a second successor corporation which has acquired the property from a predecessor corporation which was itself a successor corporation.
13.	That for the 1962 and subsequent taxation years income earned in Canada by a non-resident corporation whose principal business is mining iron ore in Canada, be exempt from the additional 15 per cent tax imposed by Part IIIA on profits earned in Canada by non-resident corporations.
14.	That where an employee who is a member of one deferred profit sharing plan becomes a member of another deferred profit sharing plan the amount to his credit in the first mentioned plan may be transferred to his credit in the second mentioned plan without attracting tax on the amount so transferred.
15.	That the amount to the credit of an annuitant under a registered retirement savings plan may be transferred at any time before the maturity of the plan to another registered retirement savings plan or to a registered pension fund or plan without attracting tax on the amount so transferred.
(Translation):
Mr. Ouellel:: Mr. Chairman, when the house rose last evening, I was saying that the economic and financial position of Canada was alarming. I have no intention of repeating here what I said yesterday.
However, there is one thing 1 have noted, and it is the fact that we have spent so much for others that, unfortunately, we have even forgotten to keep a little change to buy a flag, a symbol we cannot even claim for our country.
I also referred very briefly yesterday to a matter which concerns the eastern townships, and more particularly my constituency, that is the textile industry.
I have here a report issued by the Canadian Apparel and Textile Manufacturers' Association, and there is every reason to believe that the figures given in this report are accurate. This report indicates that we are suffering from too many and too massive imports from Japan. In fact, Canadian imports of Japanese textile products amount to $1.83 per capita, while they amount to only $1.18 and 25 cents per capita respectively in the United States and in the United Kingdom. Our Japanese imports are undoubtedly creating an alarming situation.
In fact, here is what the Canadian Apparel and Textile Manufacturers' Association stated in its October, 1962 bulletin:
Exports of Japanese clothing to Canada are unfairly concentrated on a few articles. In 1961, Japanese exports were so numerous that they amounted to one imported shirt against four shirts made in Canada, one blouse against five made here, and one bedcover against two Canadian made. It would not be realistic for the Japanese to hope to increase their exports to Canada when their hold on those markets is already too strong.
If this question of imports was considered more thoroughly and rationally, we could
Income Tax Act
create 10,000 additional jobs, thus enabling
10,000	Canadians to work in the textile industry.
That leads me to repeat what I said yesterday in this house: in the last ten years, the Canadian Celanese and the Dominion Textile companies have laid off from 5,000 to 6,000 employees in the city of Drummondville alone. It must be recognized that this cannot go on and that the government must take steps to provide this industry with a more adequate protection in the interest of Canadian citizens generally, and especially those in my riding.
I trust that the government will give serious consideration to my remarks and that it will protect our textile production, so that the Canadian citizens working in this industry, including the manufacturers, can be in a really good economical situation in Canada, and especially in my own riding of Drummond-Arthabaska and in the eastern townships.
Mr. Chairman, somebody said yesterday that the government could not borrow from the Bank of Canada. Yet last April, while waiting for the revenue from the personal and corporation income tax, the government borrowed more than $25 million from the Bank of Canada. Consequently, if it has been able to borrow $25 million at a certain point, it should have borrowed $1,050 million from the Bank of Canada instead of getting it from the international monetary fund, at a rate of 6 per cent. This loan could have been made through the Bank of Canada. Thus we would have been able at least to pay interest to Canadians besides availing ourselves of a much lower interest rate.
I think that system will have to be adopted in order to restore the financial situation of Canada.


An hon. Member:: Upset the government.


André Ouellet: Upset the government? My hon. friend is not serious and those who were there before him were not much better. But those I disapprove are the hon. members opposite because we have problems today-


An hon. Member:: Keep both.
Another hon. Member: Not much hope.


André Ouellet: Not much hope? Leave it to us and when the time comes, you will not have to worry. I shall tell them myself and I do not want to be your spokesman.

Income Tax Act


An hon. Member:: Tell them what an actor you are.


André Ouellet: Gentlemen, you can tell the members opposite what you have to say about the government. The charges I made yesterday against the government as well as against the official opposition should be enough to prevent anybody from calling me a Conservative or a Liberal. I hope that answers your question.


Mr. Denis:: We have a bad government, so we keep it.


André Ouellet: Our economic conditions are ridiculous. In this house, I heard some hon. members saying we have to promote education, train engineers or, to sum up, have experts in all possible fields.
If my information is correct, last year, 5,500 Canadian graduates had to leave the country to earn a living. I find this to be a very sad exodus considering the wealth of our country, a country where there is so much to develop and which would need the skills of those young people whose education cost their parents a fortune and who must now go and offer their services to countries against which we have to compete in the field of trade and industry. Those countries are not to blame. Each one looks after its own interest. That is why, yesterday, I told the house that Canada was not protecting the interest of Canadians.
Willingly or not-I am not casting reflections on any one in particular-all together, we will have to put our shoulders to the wheel, regardless of parties, races, languages or creeds.
I repeat, we will all have to think as Canadians, to be Canadians once and for all, across the country, and to put all Canadians on an equal footing.
Mr. Chairman, a while ago, the Cuban crisis was touched upon lightly. The Prime Minister (Mr. Diefenbaker) referred to it in his speech. I am not qualified to deal with it-
(Text):


The Chairman:: Order; I am sorry to interrupt the hon. member but his time has expired.
(Translation):


André Ouellet: Thank you.
(Text):


Mr. Smith (Calgary South):: Mr. Chairman, this being the first opportunity I have had of speaking in the house this session, my first and most pleasant duty of course is to congratulate you, sir, on your very senior position, and of course to extend similar congratulations to the Speaker of the house. I note with some pride that in this august

body the two senior officers of the house are western Canadians. Also, I think we might also observe that three of the four party leaders are western Canadians. We take some pride in this fact. I also congratulate an old friend, the Minister of Finance, on assuming his new portfolio. I realize that for some years now he has had more than a casual association with this post as the gentleman responsible for enacting the legislation of his predecessor. I know, too, that when the announcement of his position was made throughout Canada it was universally accepted as one of the best appointments made in a great many years.
I want to talk, basically, about the resolutions which we are shortly going to consider. Perhaps I will be excused if I make special reference to those dealing with the oil and gas industry, because I think, of the 15 resolutions, seven concern themselves with problems related to the development of our petroleum resources. Before doing this, however, I should like to draw the attention of the committee to the nature of these resolutions. They are basically designed to provide incentive to our development industries, to create new jobs, new production, new opportunities for Canadians. It seems to me that this is particularly significant and, I suggest, important, because in a day and age when a great many of us-in my view, too many of us-are looking to the state for a handout or for a particular support program, without return to the state, or for the establishment of some new social legislation, Canadians are bound to ask us how or when do we intend to repay the debt that is involved in each of these measures.
I know it is said, as a rule of thumb, I think, that for every 1 per cent increase in gross national production there is a return of revenue to the extent of $100 million. The figure is not important. The fact is that if we build into our legislative system a series of grants or a series of social measures to the extent that they call upon the treasury to produce vast amounts of money, unless there is some check in the future it is my belief that we will end up as a nation whose people do little more than collect taxes from one another as an occupation.
Therefore I am happy to see this series of resolutions is designed to do two things. First of all, it is designed to provide encouragement for the development of one of our major industries; in fact, Canada's major mineral industry; second, to encourage Canadians to participate in its development. This house knows, of course, that this is not the first occasion we have turned our attention to the problems of the oil and gas industry. The history in five years is almost unbelievable.

First of all we established the Borden commission to make a review of the problems so that we could direct policy in recent years. Following the commission there was the establishment of the national energy board. This was the first time the industry could come before the government in a public forum to discuss its problems.
We then established the territories regulations, known as the Canadian oil and gas regulations, encouraging Canadians as never before to participate in their national resources. Following this was the highly successful national oil policy, a policy which has increased production for this year alone by more than 16 per cent. The processing of some 11 gas applications followed, and even the Department of Trade and Commerce, which one would not normally think would be in the field of research publications, has developed and assisted the industry, in providing a survey of its requirements in terms under which Canadians could determine the extent of oil field equipment that could be made in Canada.
I repeat this history because we are inclined to forget the extent to which this government has gone to assist one industry, and by so doing, recognizes the importance of this industry to the economy of Canada.
I have said, Mr. Chairman, that we have been successful over these four years. Perhaps I might put on the record certain references or statistics, as much as I dislike them, which justify this enthusiasm. As an example, in the field of gas export; in fact, in almost every field from gas export to petroleum production the percentages and volumes have surpassed even the enthusiasm of many of the people who developed the policy. Starting with gas, we have from the 293 billion cubic feet produced in 1957 increased this year to something over 735 billion cubic feet. Expressed another way, though-and this is what I suggest is relevant-crude oil and natural gas minerals in 1961 showed a 20 per cent increase; natural gas alone, something like 23 per cent. It will be considerably higher this year, of course.
The advent of new pipe line construction brought revenue up about 20 per cent; dollar value of oil exports, 62 per cent and gas exports, about 92 per cent. I think these figures clearly illustrate the nature of the policy of trying to encourage the development of this industry. The result, of course, has been exhibited in those figures. They show the success of the policy, one which certainly has merited this success.
Mr. Chairman, I want to talk about the resolutions themselves and to say a word to the minister, because I think he will agree with me that we must not be satisfied that we have in any way settled the long term 27507-3-59
Income Tax Act
problem which will continue to confront the petroleum industry. First of all, the resolutions are designed in the first part to broaden the activity of Canadians by permitting those whose primary business is not concerned with the petroleum industry to write off certain costs against income; second, to permit people to write off acquisition costs and production costs. In other words, these are incentives to encourage people to come into the industry in a substantial way.
I know a great many people will think these are indeed generous terms, but it must be remembered that when you calculate generosity it has to be measured in terms of the risk involved. Anyone who has been associated with petroleum development knows that a single well may cost $1 million or more to drill, and that if unsuccessful, the return is purely the bits and pieces of equipment you can pick up. One can then understand the necessity for providing incentives. Yet we have found this industry, in the last few years, suffering hardships even in face of the prosperity I have mentioned. We have even seen a great many small, independent companies being absorbed by major companies. In fact, in the last 18 months ten of these smaller companies, Canadian operations well known in the foothills of Alberta, have been absorbed by foreign corporations.
Mr. Chairman, I want to examine briefly why this has happened and suggest to the minister the sort of action that should be taken to preserve the opportunities still further for Canadians. Second, I wish to conclude on a note as to future policy, an extension of the present oil policy. I do not think we need be alarmed by the fact that we have lost some ten independent companies, so long as we recognize how this occurred. I do not think we should ask any government or any company to maintain a purely Canadian identity of any corporation based on pure sentimentality. It just does not make sense. It is a very nice thing for the Canadian ego to say we have "x" number of Canadian companies competing in the Canadian oil industry, but unless we are prepared to support them by some measures such as these resolutions, such a statement is meaningless.
We have lost some ten Canadian companies by the very nature of the fact that oil in the ground today has a greater value than it has had at any other time. While we are producing more oil, and the figures have indicated this as a result of the national oil policy, it is equally true that the rate of discovery of oilfields is alarmingly lower, for in the last two years no major oilfields have been found.

Income Tax Act
These resolutions introduced by the minister are designed to encourage and speed up exploration so that we can return to a more proper ratio between reserves and production.
When we look at the Canadian companies which have gone, and which we hope will be replaced by others, we must ask ourselves if there is any other reason why they have disappeared. The second reason is that, with the success of new cash from the sale of gas and increased oil production, it is quite apparent that they become more attractive investments to major companies. This too has been a major factor in major companies buying out small independents. In addition it has been just good business. When a shareholder of a Canadian company can be offered double or triple the value for his shares or equity, then naturally he is prepared to sell them.
What then can we do to correct this trend? First of all, I think we should not be concerned about those companies which have been absorbed. A great many of them have been integrated into foreign companies, and, for the first time, Canadians are being offered an opportunity to participate in their world wide, international operations, through share purchases on Canadian exchanges. This too, I suggest, has been at the persuasion and with the enthusiastic support of the present government. Second, many of these companies have completely integrated their Canadian counterparts into their own operations so that there has been no loss to Canadian employment in this respect.
I believe that if we are to encourage further opportunities for Canadian companies to compete, we must judge the present resolutions to see that we have actually broadened the basis upon which Canadians can participate in the development of Canadian oil, and upon which new Canadian companies will be formed. I believe this is the key resolution. The only suggestion I make to the minister is that after the operation of the resolution for a year he might consider whether or not it would be beneficial to extend that right of write-off against all the operation of their principle business and not merely provide for a write-off for those oil companies in which they are participating. I would suggest that if this were done it would encourage more Canadians, with their investment capital, to go further into the development of the petroleum industry.
All of us recognize that in losing some of our independent companies we have also lost identity with a great many of those pioneers who, for so long, were responsible for the development of the gas and oil industries in Canada. It is true that while they may not

have developed the majority of the fields that have been in existence for some time, they have nevertheless been responsible for more than their share in the discovery of oil fields, because an independent company cannot sit on oil reserves. It must have continuing reserves and therefore must go out and wildcat and make new discoveries.
It is an advantage to this government, and to the Canadian people as a whole, to encourage Canadian independence under any circumstances. It not only has the advantage of employing more Canadian people but it provides Canadian investment capital to underwrite industry, and as has been their job in past years, to find what is so urgently required today, and that is the discovery of a major oil field.
I believe the resolutions are designed with this object in mind, to provide incentive and encouragement, because they are providing risk capital with the opportunity of writing off that risk against income. I say to the minister that this is one of the first positive steps made in many years designed to assist where assistance is required most, in the making available of new capital.
Now, may I say a word or two about the national oil policy? I read with interest the comments of one of the distinguished hon. members opposite who spoke on this subject. He discussed the importance and the necessity of taking some action either in finding new markets for Canadian oil in Canada, or in increasing our exports abroad. I cannot disagree with his sentiment but I wish to say one or two things about it.
The hon. member for Davenport had this to say:
Steps should be taken to bring our imports and exports of oil and petroleum products into balance.
This is a good, safe statement and no one can argue with it. He also said:
I know that some progress has been made in this direction, but a great deal more should be done, and it should be done quickly.
I would also agree with him that a great deal more can be done, but it is interesting to note one of the comparisons he made. He said:
In 1961, last year, our imports of crude oil and petroleum products exceeded our exports by some $137 million and if natural gas Is included in the calculations, and I do not believe it should, our adverse balance still exceeded $100 million.
These figures, of course, are correct, but it is interesting to note that this is still less than a third of the figure of two years ago, so that we have made considerable progress and are continuing to make more.

Let us look and examine his statement still further. He suggests:
Either we should Increase our exports very considerably or we should take another serious, hard look at the case for an all-Canadian oil pipe line from Alberta to Ontario and Quebec.
May I reiterate the steps which we have taken by way of legislation, and remind the committee that this was the same problem which confronted the Borden commission, and which was discussed at some length on the introduction of the National Energy Board Act?
At that time it was decided that the best way to increase Canadian production, with the least interference by government, was to try to encourage the oil industry to work out its own problems. The companies were called together with a view to discussing which course we should take, and how certain minimum production figures could be reached.
I complimented the government earlier in that their target for 1961 was easily accomplished. They will exceed their 1962 target by a considerable degree and there is no question but that the oil target for next year, 1963, will also be surpassed. However, it is also fair to say that this target in the latter two years will be reached with a considerable part of it, approximately a third of it, entering the United States market both in the midwest and in district 5 of the Pacific northwest.
Therefore we can agree the policy has been successful, but the hon. member for Davenport suggests, as one alternative, that we further increase our exports into the United States. I know he is aware of the concern expressed by the secretary of the interior of the United States regarding any substantial increases in the import of oil into that country. I know he has read, as I have, the repeated statements by major independent organizations, principally the independent petroleum association of the United States, encouraging congress and the president of the United States to put Canada in terms of quota, as are other countries which export oil into the United States. Therefore it seems to me that if we adopt this suggestion and rapidly increase our exports to the United States, we may find the United States taking that action which it took some two years ago against many other countries, and cutting off our oil exports entirely.
What of his other suggestion of having a pipe line to Montreal? This has a certain odd advantage which he points out, in terms of Canada's exchange with the United States; and in terms of the construction of a line it would employ many Canadians and would also add to Canadian security by making it free from dependency on crude oil from the Middle East or Venezuela. Yes, there is much 27507-3-59J
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to be said for a Montreal pipe line. In fact, the first speech I made in this house in 1957 advocated that such a line would and should be built as a matter of course. I believe I said on that occasion that it was only a question of time. The government, however, decided not to build the Montreal pipe line but made provision in a section of the energy board act to construct the line if the national oil policy was not a success. The national oil policy can be a success-but it must be dependant entirely upon the development of new Canadian markets, not on exports-only if the industry continues as it has in the past two years, and I emphasize that it has cooperated in developing new markets in the Montreal area and in the extension of the present Ontario area. If this is accomplished, it is my belief that it is not for some time that we will need either to increase exports to the United States or to construct the Montreal pipe line.
But having said that, and having believed that the extension of the present national oil policy should be made in the near future so that oil companies, the industry, and all those associated can make their plans and projections for the years ahead, I still have one concern about the present oil policy. I said that it was dependant upon Canadian oil companies, particularly the integrated refiners, taking the greater part of Canadian oil production, refining it and distributing it in the large Montreal markets. It was not dependant on the United States accepting increased volume of Canadian crude. But it is quite obvious that this year and in subsequent years the export market into the midwest and the Pacific northwest is to a very large degree going to play an important role in our oil policy. My one concern is that if any of the pressures which have currently been brought to bear in Washington on the President of the United States are successful, and further, if there is any attempt to create embargoes against Canadian products, then it becomes automatic that we have to invoke the assistance of the national oil policy and construct this Montreal pipe line.
Mr. Chairman, in the history of our relationship with the United States in the exchange of goods, we have seen a series of situations which shows that when the United States reaches a stage of oversupply of any particular product or resource from Canada, pressures within that country-and this is understandable-are brought to bear on the president suggesting to him that they should block a particular Canadian product. We have seen it happen with uranium, with lead and zinc, and now with lumber. It is conceivable that such pressures could build up against oil

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going into the two areas of the United States, and if that is the case I would have real concern about the success of the national oil policy. Because it would mean we would have to find a new home for over 200,000 barrels a day of Canadian oil. So I say to you, Mr. Chairman, and to hon. gentlemen in this committee, that I believe we should attempt to reach some understanding with the chief executive of the United States as to what is the attitude of their government with respect to all Canadian resources.
I said previously that I had hoped we could get either an understanding in a contractual agreement-a letter of intent-or something in the form of a treaty. Perhaps I am being a little na'ive and such an agreement might prove to be too inflexible; but I see the need for at least some understanding between our two heads of state or a discussion of the whole question of the exchange of resource products, so that we do not find ourselves in a year or six months time in the position where they will say to us: "I am sorry, but the lobby of the independent petroleum oil operators of the United States has become extreme and we find it necessary to restrict or to cut out entirely the quota of oil entering the United States". It seems unlikely that such a course would be adopted, especially in view of President Kennedy's recent trade bill; but nevertheless it is significant to note that two committees have been studying just this subject in the United States. One of these committees completed its study recently and reported, indicating that the United States, of course, requires the continued supply of natural gas from Canada; but they are not this anxious about accepting our oil.
I can understand the attitude of the American oil industry. Quite obviously, with oil going into areas which their producers could normally supply, this in turn slows up their desire to find new fields and incentive is reduced. But let us look also at the Canadian industry. We are taking into eastern Canada about one third of our total capacity. We have increased production in several areas, and while there is a shortage of oil today and a shortage of reserves, there is surely no desire by the Canadian oil industry to look for new reserves unless they realize that they are going to be able to market this oil. So I repeat that we cannot leave the Canadian oil industry in a state of indecision, not knowing from day to day whether or not they are going to have the door closed on a large part of their present market.
I believe that it is essential that the Prime Minister and President Kennedy discuss this as but one related matter in the exchange of all our resource products. I emphasize "all"

of them, because I think it is important to note that while we are in a position to bargain and to say to our friends that we are anxious to provide them with many of these products, we should remind ourselves of the fact that if the U.S. runs into another deficient position of oversupply their desire to bargain becomes somewhat more apparent. I believe we can serve the purpose both of United States oil marketers and the Canadian industry, as well as the Canadian government, by having a clear and frank understanding as to the direction in which we are going.
Now, sir, I want to close on just about the note I began. We have come a long way in the development of our resources. We have provided encouragement and incentive in these resolutions. It is absolutely essential that these resolutions pass this committee at an early date in order to make certain that Canadians can go into this area of resource development with a clear understanding of the risk which is involved with their capital investment, and realizing that they will have every encouragement from this government to carry out their undertakings. I believe it is equally important that the government should keep a very close watch to determine whether or not they have in these resolutions gone far enough to achieve this objective. Third, I would hope the government would at an early date clearly indicate in which direction a national oil policy will go, and what the industry may expect in new targets after 1963. These targets should be projected soon so that the industry may plan to meet them. May I, as one who for so long has been interested in this particular subject, pay my respects to the members of the cabinet concerned, and particularly to those members of the civil service, especially Mr. McKinnon, the chairman of the national energy board, who has for so long and so diligently negotiated, and successfully negotiated, Canada's present inter-relationship with the United States on all of these problems. In closing, I would say only that I have talked about the need for incentives to encourage industry. This is the keynote, I suggest, of the present session-to increase production, to increase opportunities for Canadians to participate, and thus to create a better Canada, with more employment, and more encouragement to take part in their own natural resources.


Mr. Wahn:: Mr. Chairman, as this is the first time I have spoken in the house, perhaps I could take this opportunity to congratulate Mr. Speaker and Mr. Deputy Speaker upon their appointments and to thank them and the other officials of the house for the kindness and consideration they have shown to me and to other new members.

I have the honour to live in and represent the riding of St. Paul's, which is in the centre of Toronto, and which was previously represented in the house by the former Speaker, the Hon. Roland Michener. I was particularly pleased to hear at the beginning of this session the tributes which were paid to Mr. Michener by members of all parties in this house. I refer particularly to the statement made by the Prime Minister when he implied that had Mr. Michener been re-elected an opportunity would have been given to this House of Commons to consider the question of a permanent Speaker. As many hon. members will know, Mr. Michener announced last week that he would not be running for reelection in St. Paul's as he felt it would be inappropriate for one who had been a nonpartisan Speaker to run again as a private member. I hope the opportunity will be found to secure for his country the services of this gifted man in some other capacity.
Perhaps I might say just this with regard to the question of a permanent Speaker, which was debated quite vigorously in St. Paul's immediately prior to the election. Quite clearly I would think it would be desirable to have a more permanent Speaker, provided due provision is made for alternation between a Speaker who is primarily French speaking and one who is primarily English speaking. If this House of Commons has the will to do it, it can very easily be done by a very simple amendment to the provision in the British North America Act which now requires that the Speaker be a sitting member of the house. I speak subject to correction but, as I understand it, such an amendment could be made by this parliament without the concurrence of the provinces. I would suggest to hon. members that it is too much to expect that a Speaker, with the onerous duties that he has, and they are quite obvious to all of us, should be called upon also to represent a riding as a partisan.
In speaking at this time I have this advantage, Mr. Chairman, it is neither necessary nor desirable for me to waste the time of the house in criticizing the actions of the government. Let me therefore merely summarize by saying that we on this side of the chamber have moved several motions of no confidence. We did so because we sincerely believe that the ministry has failed the country in certain vital matters. Very briefly and without being provocative may I say that it has failed the country first in that it has failed to recognize that emergency problems of a very serious nature are facing the country. In the second place it has failed the country in that it has not accepted the responsibility as a federal government of
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dealing with those problems. In the third place it has failed the country because it has refused to accept the necessity of developing plans which would adequately cope with those problems. That is all I will say on that score.
Having said that I would go on to say that we must recognize the fact that the government has done many things which are of value to Canada. As one who was born in Saskatchewan and grew up there I was happy to learn that the government had decided to proceed and was proceeding vigorously with the South Saskatchewan dam. Whatever the economics of that project may be, I am convinced that it will be of tremendous value to the people of Saskatchewan where water in ample supply is both a necessity and a luxury too frequently lacking.
Then again we are happy that western grain sales have been quite high in recent years. I commend the Minister of Agriculture for his enthusiasm and initiative in that respect, although we do not see how he can possibly expect complete approval of the house for his policies until such time as he has divulged to the house the terms upon which the sales of western grain have been made to communist countries and the extent to which the people of Canada are financing the purchase of such grain. Surely this is something the house is entitled to know.
Again, the concept of northern development, many of us believe, is an extremely important and valuable one. However, we feel that it is not being carried out adequately. The vision-and I say this seriously-must be translated into actuality. After all, Canada's north is our last frontier. It is a great Canadian heritage. I am sure all of us will agree that those thousands of square miles of Canada's northland cannot be held for this country merely by declarations in this House of Commons or by extending lines on a map from our southern boundary. All history shows that the only way in which that country can be held for future generations of Canadians is by populating it or putting people there. It is my understanding that the government has indicated that $100 million may be appropriated for the centennial celebration. I would seriously suggest that this money, instead of being spent on monuments or pomp and ceremony, be spent to a great extent in establishing and maintaining a circle of outposts in the north and in keeping Canadians there in order to ensure that this part of the country will always remain Canadian.
No doubt there are other valuable policies which the government has carried out. At this point 1 should just like to emphasize two

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things. The first is that the four points I picked out and mentioned all involve governmental planning. The second point I should like to make is that while everyone in the house recognizes the importance of Saskatchewan, Manitoba and Alberta, I should like to remind the minister that there are other provinces in Canada, notably the great province of British Columbia to the west and the great provinces of Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland to the east. These provinces also should be given the benefits of governmental economic planning.
In reviewing the record of Hansard to date many of us are a bit concerned by the fact that many of the statements made by the ministers exhibit a certain feeling of complacency and lack of a sense of urgency. For example, I find in Hansard quotations taken from every and any source, whether expert or not, in order to prove that everything is fine and that we have no very serious or basic problems. We find, for example, statements such as these: the forecast is fine for Canada; the economy is rolling along; Canada has a clean and glowing bill of economic health; the economy is on the up and up.
As I read that I could not help thinking of that old slogan which Dr. Coue made so famous years ago: Every day in every way we are getting better and better. So I looked at the Encyclopaedia Britannica to find out what it had to say about Dr. Coue and I should like to read this extract into the record:
Emile Coue (1857-1926), French psychotherapist whose formula "every day, and in every way, X am becoming better and better" became proverbial. Based on the power of imagination rather than that of the will, his na'ive and empiric system utilized formulas, repeated again and again in a confident voice, especially at a time when the mind was most receptive, to sink into the subconscious and to eliminate ideas tending to cause distress and disease.
But then I realized that these statements were made in the debate on the speech from the throne and I did not really become concerned until the Minister of Finance delivered his budget speech last Monday evening. As I listened to him then, I really began to wonder whether I was completely sane or whether something had gone completely wrong and I was in some sort of wonderland. For the benefit of the new members and also for the benefit of those who will come after us I should like to put on the record something I found in browsing through the library that gave me a great deal of comfort. I think I have come upon the explanation and it is that the ministers of the government have been engaging in what is called "doublethink".

All hon. members will remember that "doublethink", as defined by that great philosopher, Emmanuel Goldstein, in his work on "The Theory and Practice of Oligarchical Collectivism", was quoted by George Orwell in his work, "Nineteen Eighty four" on pages 214 and 215. I should like to quote a lot of it because it is most helpful but I must refrain and only quote a little. I recommend the work to all hon. members. It reads:
"Doublethink" means the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them. The party intellectual knows in which direction his memories must be altered; he therefore knows that he is playing tricks with reality; but by the exercise of "doublethink" he also satisfies himself that reality is not violated. The process has to be conscious, or it would not be carried out with sufficient precision, but it also has to be unconscious, or it would bring with it a feeling of falsity and hence of guilt. ...to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while take account of the reality which one denies-all this is indispensably necessary. Even in using the word "doublethink" it is necessary to exercise "doublethink". For by using the word one admits that one is tampering with reality; by a fresh act of "doublethink" one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.
I have read this into the record merely to assist all those who, like myself, are new members and also those who may follow us in the years to come. It was a great consolation to me. As I say, I became deeply concerned only when I listened to the speech of the Minister of Finance, particularly when he came to this point and said, as found on page 808 of Hansard:
-we Canadians are living in the most prosperous year in Canada's history.


George Clyde Nowlan: I am sure that would register with you.


Paul Joseph James Martin: A fantastic
statement.


Ian Grant Wahn: More important, the minister went on to admit that there were certain problems, particularly balance of payments problems. This created, I think, a general feeling, certainly in my mind and in the minds of those in the financial and business community in many quarters, that the minister really believed this and that he felt that all we had was a balance of payments problem. So I thought I would take this opportunity to invite the minister to correct what is surely an erroneous impression, no doubt arising from the fact that he was speaking from a prepared text rather than from notes on the back of an envelope to which he has become accustomed. I would be quite happy to defer to the minister and

allow him to correct this impression, which I am sure is erroneous, if he would like to take this opportunity to do so.


George Clyde Nowlan: I will amplify it later.


Ian Grant Wahn: Then we can only take it that this was not inadvertent and that the minister was really aware that this statement was in fact in the prepared text. That is very serious because it is of tremendous importance that Canada's Minister of Finance should recognize that this country has basic problems and not just a balance of payments problem, because if he does not recognize that he will be unable to find appropriate solutions.
What are these basic problems? In human terms let me tell all hon. members that within five minutes walk of the corner of Bay and King streets which is the heart of the financial district in Toronto, you will find forced unemployment on a massive scale, disease, poverty, hunger and despair. If anyone here thinks that is not true I will be happy to take him to my riding of St. Paul's and show him some of the areas in the southern portion of it.
Those are real human problems. If human problems have no effect upon the ministers, let me translate these human problems into other terms which may have some effect upon them. What are some of these problems? First, at this moment hundreds of thousands of Canadians, our fellow citizens, are suffering from forced unemployment. Second, business failures and bankruptcies are at an all-time high. Third, more people are leaving Canada this year than are entering, and the ones who are leaving are our most highly skilled and valuable citizens. Fourth, the cost of living continues to rise. Fifth, the value of our dollar has gone down. Sixth, production per capita in Canada has actually declined in recent years. Seventh, in five years our federal government has spent about $4 billion more than it has taken in, according to my arithmetic, made up of $3 billion in deficits and approximately $1 billion in diminution of the unemployment insurance fund. Those are the problems translated from the human to less human terms. Perhaps they will make the ministers think, and not "doublethink".
What should we do about this problem? The government has told us that they hope to provide, over the next four years, about
200,000	additional jobs per year, and that they will introduce shortly a program to bring this about. We hope that this program will be successful, but we would like to be of some small assistance to the ministers in achieving what we know is their goal. The Prime Minister, and I think the Minister
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of Labour, said that they had been happy to adopt a number of our policies and ideas. Perhaps they will adopt another one which I sincerely commend to them and which I think will provide a solution to many of our problems. It is simply this: While we must encourage the agricultural industry and indeed all private enterprise in Canada, we should concentrate upon a massive emergency expansion of our secondary manufacturing industries and the service industries associated with them.
I will tell you why I believe this. This is the only way in which the necessary number of jobs can be provided for those who are now unemployed and those who are coming into the work force. These ideas are found in many places and we hope the ministry will adopt them.


George Clyde Nowlan: I have said this myself, many times.


Ian Grant Wahn: Perhaps I was asleep at the time and did not hear that. I see that I have only five minutes left, so I would like to get these ideas across, though they may not be new to hon. members on the other side, and I should like to get them on the record.
The idea is simply this, that the government should look at one industry after the other in Canada and develop a plan specifically tailored to each industry so that, over a period of time, approximately 50 per cent of Canada's present imports of manufactured goods will be replaced by a like amount of products manufactured in Canada. We on this side assert that this cannot be done and should not be done by surcharges or increased tariffs. We assert that this should be done by encouraging, and indeed requiring, every industry to adopt a plan similar to a plan adopted by Northern Electric to which reference was made by the Minister of Trade and Commerce earlier in the session.
My time is limited, but I should like to tell hon. members who have not seen this plan that a copy can be obtained from the minister's office. I may say the Minister of Trade and Commerce was sporting enough to say that this plan was conceived about six years ago which was, of course, when the Liberals were in power. However, this is irrelevant because the same thing can be done by the present ministry if they will follow this particular program.
Let me tell you what happened. Over a period of years Northern Electric found that they had built up what they called their import inventory. They developed the habit of importing items from other countries which were highly specialized. In 1956, the total number of items had grown to 8,000 or

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9,000. They set up a committee first to consider these items to ascertain if they could not be produced in Canada. Then, they set up a committee of the higher brass to review the findings of the first committee. Then, a really top ranking man reviewed the findings of the second committee. Let me read to you what the results of that plan were by 1962:
The end result of our program was that we transferred to Canadian manufacture over this six year period, components which were costing us $11 million per year to import. This activity has resulted in the employment of about 1,600 Canadians.
This is one company we are talking about, and I assume they mean annual employment.
We made this $11 million worth at a substantial saving and tooling costs were recovered in about twelve months of production. A number of the parts were made in our own factory, but several thousand were subcontracted to other Canadian manufacturers.
I hope I am not being presumptuous when I suggest that the minister could go through this volume which is put out by the bureau of statistics and which shows what we are importing by industries, classify those industries and develop for each industry a plan along the lines of the Northern Electric plan. You have done it already in your national oil policy. This is exactly the type of thing I have in mind. If we had not had a national oil policy, Canadian oil production would not be as high as it is now. All I am suggesting is that you do the same thing for all these other industries, but do it on a collective basis and try to avoid the creation of governmental boards. The national oil policy, for a number of reasons, required the creation of boards, but many of these other industries would not. We should put the prime responsibility upon private business itself to develop a plan, and have a definite objective, namely an over-all replacement of 50 per cent.
Let me put it this way: The objective should be the replacement by Canadian products to the extent of 50 per cent of the value of the items we are now importing. I see I am running out of time, but I should like to say this, that statistics published by the Canadian Manufacturers' Association prove that each Canadian imports ten times as much in the way of manufactured goods as each citizen of the United States and six times as much as each Englishman. Now, this is almost incredible but it is true. If we reduce that amount by half, we would provide full employment for all Canadians.


The Deputy Chairman:: It being 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.


FINANCE
[Stage Direction]
On the order: Notices of Motions (Papers):
That an humble address be presented to His Excellency praying that he will cause to be laid before this house copies of correspondence or any documents exchanged between the Prime Minister or the Minister of Finance or any other minister of the crown and officers of the Department of Justice or the privy council or any other government department or agency on the subject of surcharge and imports order, P.C. 1962-902, dated June 24, 1962, and the amendment to the surcharge and imports order, P.C. 1962-987, dated July 11, 1962, and the import control list as amended by P.C. 1962-903, dated June 24, 1962, with particular reference to the legality of such orders.
Paul Joseph James Martin: Mr. Speaker, this motion, I am sure, is one, the significance of which-


Mr. Speaker:: I am sorry; I cannot recognize the hon. member until the motion is put.


Mr. Fleming (Eglinlon):: May I ask that it stand?


Mr. Speaker:: For the same reason, I cannot recognize the minister. Is the hon. member prepared to proceed with the motion?


Paul Joseph James Martin: Well, Mr. Speaker, you had better read it since you thought that is what you should do.


Mr. Speaker:: The motion is not put to the house as yet, and there is no seconder.
The hon. member for Essex East (Mr. Martin), seconded by the hon. member for Hoche-laga (Mr. Eudes) moves:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house copies of correspondence or any documents exchanged between the Prime Minister or the Minister of Finance or any other minister of the crown and officers of the Department of Justice or the privy council or any other government department or agency on the subject of surcharge and imports order, P.C. 1962-902, dated June 24, 1962, and the amendment to the surcharge and imports order, P.C. 1962-987, dated July 11, 1962, and the import control list as amended by P.C. 1962-903, dated June 24, 1962, with particular reference to the legality of such orders.


Donald Methuen Fleming: I wonder if I might ask the hon. member if he thinks the motion might stand. I think that he is not unwilling, with a reasonable condition, namely that when it comes up two weeks from today it should retain its place on the list. It is in the first place on today's list and I think it might be a matter of agreement that when it comes up two weeks from today it might retain that place on the list for that date.


Paul Joseph James Martin: Mr. Speaker, as the minister mentions, he had spoken to me about this matter and I told him I was ready

to go on. It must be apparent from the documents before me that this is the case. I had hoped it would not be necessary to make any serious argument and that the minister would readily accede. However, since he is displaying his usual affable indecision and reluctance, I readily understand the situation and I will be glad, under the circumstances, to accept the suggestion that this matter be delayed, it being understood-and this can only be provided for by unanimous agreement-that the motion will not lose its place and that it will be proceeded with as the first item at this hour two weeks from today.


Mr. Speaker:: Just in case there might be any confusion as to when this matter will come up, if one reads standing order 15, paragraph 3(a), he notices that this motion would come up next week and not a fortnight hence, and it has absolute precedence next week. A fortnight hence it would stand behind private bills, but next week it would have absolute precedence. Since the motion is stood at the request of the government under standing order 19(1), it automatically retains its place of precedence.


Paul Joseph James Martin: May I just say, Mr. Speaker, what I neglected to say. I had intimated to the minister that I could not be here myself next Thursday because of another prior engagement that I cannot possibly avoid. That being the case, I would agree to not going on today if it were understood that, with the unanimous consent of this house, I would be allowed to proceed with this motion, without losing my present position of priority, two weeks from today. The minister acceded to this. As the house is the master of its own rules, I should think there could be no difficulty.


Donald Methuen Fleming: Agreed.


Mr. Pickersgill:: If I may just say a word, I think Your Honour perhaps was in error-


Mr. Speaker:: Order. Everything is all right. In order to carry this out, if there are no private bills on the order paper next week it will have to be stood again at the request of the government, otherwise it would fall, by the operation of the rule.


John Whitney Pickersgill: Not if there is unanimous consent and the order is made now.


Paul Joseph James Martin: Mr. Speaker, we are all agreed now, and the Minister of Justice is going to represent me next week.


Donald Methuen Fleming: Mr. Speaker, I would suggest that this course be followed. I believe the house could agree now, and I
Trans-Canada Highway Act believe it is agreeable to this course, that this motion should stand until one fortnight hence and it should then have the place of precedence it has on today's list, which is first.
Motion stands.


TRANS-CANADA HIGHWAY ACT AMENDMENT TO PERMIT ADDITIONAL AGREEMENTS
[Stage Direction]
On the order:
Second reading of Bill No. C-ll, to amend the Trans-Canada Highway Act (Canada highways) - Mr. Howard.
Mr. R. J. McCleave (Halifax):: Mr. Speaker, I rise on a point of order concerning the right of the introducer of this bill to move second reading at this time. I question, and I will present this-


Mr. Speaker:: Order. Before a point of order can be raised by the hon. member I think the question should be put: That Mr. Howard, seconded by Mr. Prittie, moves that Bill No. C-ll, to amend the Trans-Canada Highway Act (Canada highways) be now read a second time. The hon. member rises on a point of order.


Robert Jardine McCleave: Mr. Speaker, I rise on a point of order, whether it is proper or even allowable for a private member of this house to introduce such a bill. When these bills were introduced-and I turn back to the opening days of this session-at page 30 of Hansard Your Honour is reported to have said:
I should like to draw the attention of the house to the fact that all the subsequent bills are nongovernment bills. As they will be appearing before me for the first time I am not sure of either their bulk or their content, and I do not know whether or not they meet the requirements of the rules of the house in so far as their essentials are concerned. I must therefore enter a caveat by pointing out that between now and the time they come up for second reading such bills will be scrutinized, and if there is any essential defect the house will be acquainted with that fact when the particular measure appears before us for second reading.
I realize that at the present time the house itself is not in a position to judge whether a bill is acceptable or not, because it is seeing it for the first time. An order for first reading is merely a direction that a bill be printed so that hon. members may see it. This motion will be by unanimous consent of the house. Are hon. members agreed?


Some hon. Members:: Agreed.
I take if from that, Mr. Speaker, that I am not estopped from raising the point of order at this particular time. Then later that same day, October 1, at page 33 of Hansard Your Honour is reported as having said:
I have indicated with respect to all the bills now before us for consideration, they will be studied

Trans-Canada Highway Act
and prior to their introduction for second reading a ruling will be given by the Chair in respect of the said bills.
Again, to this the house agreed. Mr. Speaker, the point I am making is that the bill in question introduced by the hon. member for Skeena, Bill No. C-ll, to amend the Trans-Canada Highway Act (Canada highways) is what is known by long and honourable usage as a money bill. So that my argument will be complete I would refer to the explanatory note of the bill, which says that the purpose of the bill is:
-to allow for the government of Canada financially to participate in the construction or improvement of any highway within a province, including a so-called second trans-Canada highway.
Mr. Speaker, I think by long usage it has been agreed that it is not possible for a private member, except in very rare cases where government itself may indicate its approval, to introduce such a bill as the hon. member for Skeena has brought before the house this afternoon. In support of this general proposition I refer you, Mr. Speaker to the fourth edition of Beauchesne's "Parliamentary Rules and Forms", page 204, citation 243:
All bills providing for the payment of salaries, or for any expenditure whatever out of the public funds of the dominion must be first considered as resolutions in committee of the whole. And all such resolutions necessary to the introduction of a bill must first obtain the recommendation of the governor general.
I think the records of the house will clearly show that up to this date, at least, we have had no recommendation from His Excellency read to the house, nor has a resolution which would precede the bill introduced by the hon. member been considered and passed by the committee of the whole.
Then, Mr. Speaker, I refer to a further citation in Beauchesne, page 214, citation 249. Here Dr. Beauchesne is quoting from a ruling of a previous clerk of the house, Mr. Bourinot:
No cases can be found of any private member in the Canadian commons receiving the authority of the crown, through a minister, to propose a motion involving the expenditure of public money. No principle is better understood than the constitutional obligation that rests upon the executive government, of alone initiating measures imposing charges upon the public exchequer. On one occasion, in the English commons, the consent of the crown was given to certain formal resolutions proposed by a private member with reference to charges in courts of law to be defrayed out of the consolidated fund-
That certainly has not happened in this case.
It was thought, however, that any resolution placing a charge on the consolidated fund should be moved by a minister of the crown, and the more regular procedure was thereupon carried out.
Therefore, even with the agreement of the House of Commons in Westminster, it was

decided to follow the safer course, the one which in effect has become constitutional usage.
It was distinctly affirmed, however, that the member who proposed the motion involving the charge was within his right when he had the sanction of the crown, but it was generally admitted at the same time that it was better, as a matter of policy, that the proposition should emanate from a responsible adviser of the sovereign.
The responsibility of recommending applications for pecuniary redress or relief-
This is from the same citation and deals with another matter, but none the less I feel it comes within the spirit of what one does when one is dealing with money.
-to the consideration of parliament should rest solely upon the executive government, who are strictly accountable for every item of public expenditure, whose especial duty it is, in the interest of the taxpayer, to oppose all unnecessary outlay, and who possess peculiar facilities for investigating into the merits of all pecuniary claims.
It is my submission, Mr. Speaker, that the case I bring before you now falls four square within that general principle. Then, on the next page of Beauchesne's there is citation 250 (1) which reads:
It seems that under section 11 of the British North America Act the Governor General cannot officially take advice in regard to public affairs from other persons than his sworn privy councillors. The section says:
"There shall be a council to aid and advise in the government of Canada, to be styled the Queen's privy council of Canada; and the persons who are to be members of that council shall be from time to time chosen and summoned by the Governor General and sworn in as privy councillors, and members thereof may be from time to time removed by the Governor General."
Dr. Beauchesne's comment on that is this:
The wording of this section makes it compulsory for the Governor General to consult his ministers, or at any rate privy councillors, before recommending to the house an expenditure sought by a private member.
That is exactly what has not happened here although an expenditure is sought by a private member. Then further on Dr. Beauchesne turned back to the English authorities, and in particular May:
If any motion, or bill, or proceeding is offered to be moved, whether in the house or in a committee, which requires, but fails to receive, the recommendation of the crown, it is the duty of the Chair to announce that no question can be proposed upon the motion, or to direct the withdrawal of the bill.
Again, sir, at page 216, citation 250(3) reads:
The object of the resolution recommended by the crown is to give the house a first opportunity to discuss the advisability of making a certain expenditure.
I suggest that the hon. member has bypassed this giving of the house such a first opportunity.


Mr. Speaker:: I think it is quite accepted in this house that a bill which will provide for the expenditure of public money can only be introduced by a minister of the crown, after being preceded by a resolution. I think the parliamentary secretary has quite clearly set that out, but I wonder has he any other points of order which might be directly applicable as to why this particular bill might offend against that well accepted principle?


Robert Jardine McCleave: Mr. Speaker, I could labour the point, but I think that would be labouring it ad nauseam, by going to some of the other authorities.


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


Frank Howard: No, Mr. Speaker. I wish to comment on the point raised by the parliamentary secretary.


Mr. Speaker:: The discussion is on the point of order raised by the parliamentary secretary.


Frank Howard: First, Mr. Speaker, I think the recitation of your remarks-I believe they were at page 30-made by the hon. member for Halifax was unnecessary as a prelude to raising his point of order, because it is an established practice that points of order are raised on second reading against bills being proceeded with if they contravene the rules.
Whether this is a money bill or not is a pertinent question, and I submit that it is not a money bill in that the act already contains limitations upon the amount of money which may be expended on highways, and contains a limitation as to the formula under which money will be expended within any province. All this bill seeks to do, within the limits parliament has already expressed- the limit on the total amount of money and the limit on the percentage formula-is to say that this money, which parliament has already authorized, may be expended on other kinds of highways.
I was looking through Beauchesne to find some precedents on this matter. Unfortunately I could not find them in the few moments at my disposal since the point of order was raised, but my memory tells me this matter has been dealt with on other occasions and that there are precedents which rule in favour of a bill of this nature because it does not involve the expenditure of any money not authorized by parliament.
The bill merely provides that with the approval of the governor in council the minister may enter into an agreement with any province to spend money in additional directions.
27507-3-601
Trans-Canada Highway Act


Robert Jardine McCleave: If I may deal with the point raised by the hon. member as to whether it is a question of moneys being used in one direction or another that have been voted by parliament, under section 3 of the Trans-Canada Highway Act there is a provision:
With the approval of the governor in council the minister may enter into an agreement with any province providing for the payment by Canada to the province of contributions in respect of the cost to the province of the construction of a highway within the province as part of a trans-Canada highway.
I submit that only one thing can happen under that section, and that is that the minister charged with this responsibility enters into an agreement with a province, an agreement under which certain rights are defined and under which the province has to carry out certain contracts to allow it to receive a contribution from the federal treasury, and this contribution is put before us in the committee for our approval.
The hon. member has added "and other highways" to the section I have just read. That means to me, for example, that should my own province be building a highway in a part other than the part designated for a trans-Canada highway, there could be a charge upon the public purse here for the costs of that highway. Therefore I submit that the hon. member is not correct when he says that only a ceiling amount of money is involved which may go in one direction or another. I suggest, with deference, this is a matter of adding an extra expenditure on top of an already existing set-up.


Mr. Speaker:: A point of order has been raised as to whether this bill is within the power of the hon. member who introduced it as a private member, and whether it is contrary to the well accepted principle that a money bill can only be introduced by a minister of the crown after a proper resolution.
Now, having studied the matter, the fact is that the hon. member, by importing into this bill provisions in reliance on the Canada Highways Act, which was a 1919 statute, is trying to introduce an entirely new principle into the Trans-Canada Highway Act. He is trying to bring that measure within the scope of a bill which might be introduced by a private member by relying on the Canada Highways Act, which is chapter 54 of the statutes for 1919.
I do not think he can be successful in his endeavour for the following reasons. Briefly, section 3 of the old act of 1919 provided for an amount of $20 million during a period of five years from the first of April, 1919, so that the original act would have been valid only until 1924. However, in 1923-and I refer to chapter 4 of the statutes for that

Trans-Canada Highway Act year-there was an extension of the measure for another two years; and finally chapter 4 of the statutes of 1925 gave an extension for two more years. So on calculation, this bill was spent after those years, and the powers given to the government had lapsed unless there was to be a further extension, which did not take place.
It is well known that a minister of the government can introduce a measure to extend further the powers granted by the Canada Highways Act, 1919, and the amending acts of 1923 and 1925. I do not think it is sufficient to say, as does the hon. member, that the proposed amendment retains the present overall financial ceiling set by parliament, and the discretionary approval within that ceiling by the governor in council. All those bills of the government in 1919, 1923 and 1925 were introduced by resolutions. For instance, the act of 1923 was preceded by a resolution in committee of the whole which read as follows:
Resolved, that it is expedient to bring in a measure to provide that the time within which the various provinces of Canada may earn and be paid the sums allotted to the said provinces under the provisions of "The Canada Highways Act", chapter 54 of the statutes of 1919, be extended for a further period of two years.
The resolution of 1925 was in similar form. Now, any attempt to extend the Canada Highways Act of 1919 and its amendments would require the same procedure-that is, a recommendation of the crown and a resolution. So with the Trans-Canada Highway Act. For these reasons, I find that the bill which is proffered by the hon. member is one which cannot be introduced by a private member.


Frank Howard: With great respect, Mr. Speaker, we cannot allow the reneged promises of the Prime Minister to be protected in that way, and I appeal your decision and your ruling.


Mr. Churchill:: Mr. Speaker, on a question of privilege, the hon. member used a phrase just now with regard to the Prime Minister which I think should be withdrawn. He talked about the "reneged promises of the Prime Minister". This is an affront to the rights and privileges of parliament, using a phrase of that nature, and I ask that it be withdrawn.


Some hon. Members:: Withdraw.


Mr. Speaker:: I would indicate to the hon. member that the decision of the Chair is on the technical question and has no reference at all to any promise, alleged or otherwise, by any member of the ministry. Therefore, I think the remarks are quite improper at this time. If the hon. member desires to

appeal my decision on a technical ground, he is quite within his rights to do so, but not to say as he did prior to that.


Frank Howard: I had no intention of casting reflections on your decision, Mr. Speaker; I merely want to appeal it.


Mr. Speaker:: I am still of the opinion that the hon. member should withdraw the words with which he preceded his appeal of the ruling of the Chair.


Frank Howard: I did not mean them to apply to Your Honour, and if that is the thought, I certainly withdraw them without hesitation.


Mr. Speaker:: They do not apply to the Chair at all, but I still think they are wrong and that the hon. member should withdraw them.


Frank Howard: As far as they apply to the Prime Minister?


Some hon. Members:: Yes.


Frank Howard: I did not understand that that was what you expressed, and I certainly do withdraw them. May I appeal your ruling?


Mr. Speaker:: The house has heard the decision of the Chair, from which the hon. member for Skeena (Mr. Howard) appeals to the house. Those in favour of sustaining the Speaker's ruling will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Speaker:: Call in the members.
Mr. Speaker put the question as follows:
The question is an appeal to the house from the ruling of the Chair which is as follows:
On motion for the second reading of Bill C-ll, an act to amend the Trans-Canada Highway Act (Canada highways), the parliamentary secretary to the Minister of Public Works, Mr. McCleave, raised a point of order to the effect that as the bill contained money provisions it was not open to any private member to present such a bill. The Chair ruled that the point of order was well taken and as the bill could only be introduced upon recommendation of the crown and after a resolution had been adopted in committee of the whole the bill was therefore not in order. Whereupon the hon. member for Skeena appealed to the house from the decision of the Chair.


Mr. Speaker:: I declare the decision confirmed.
Perhaps rather than call the various items listed under public bills which, if they were not proceeded with might go to the bottom of the list, and since we know we are awaiting a messenger from the other place, the house would be indulgent for a few moments.


THE ROYAL ASSENT
[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bill:
An Act for granting to Her Majesty certain sums of money for the public service for the financial year ending the 31st March, 1963.
He said: The hour appointed for the consideration of private members' business having expired the house will revert to the business which was interrupted at five o'clock.
[Stage Direction]
Ways and Means WAYS AND MEANS
The house in committee of ways and means, Mr. Paul in the chair.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at 8 p.m.
Mr. Baldwin:: Mr. Chairman, I wish to take some small part in this debate at this particular time. I may say that I have been waiting for some time and have been listening to the hon. members who have made their contributions from the ranks of the official opposition. I must say that I have been bitterly disappointed. The hon. gentlemen were apparently champing at the bit to get on with this debate on the economic affairs of the nation. One would have thought that they would unleash destructive critical power with regard to the ways in which this country has been governed and with respect to economics during the past several months. However, this has not been the case. Outside of a variety of pompous political platitudes and whining and whimpering about such things as getting the nation going again, imaginative thinking, dynamic growth and so on, there has not been anything of substance. Moreover, Mr. Chairman, I fail to see how there could be.
The Prime Minister, the Minister of Justice, the Minister of Finance, the Minister of Trade and Commerce, the Minister of Labour and others from time to time since this session started have placed on Hansard statistical information with regard to all the various indices and records which I think constitute the best possible indication of the fact that this country has made, is making and will continue to make substantial progress in such things as the gross national product, employment, sales, savings, and foreign trade. It is not necessary for me to gild the lily and to put this information before the committee again. It is there on record and is available for those who are interested and will seek it out. What I propose to do is this, and I think I do it for the reason that there are times when we who come to Ottawa become institutionalized. Sometimes, from this point of view, looking back at the rest of the country is like looking through a telescope from the wrong end. It is necessary to go back to our people and to the areas from which we come. The legislation we pass here and the measures we adopt are to be considered from the viewpoint of the impact they make on these people who include farmers, small businessmen, workers and professional people. How have these people fared as a result of the measures

which this government has taken? I am naturally far more familiar with the area from which I come than I am with any other area. This is one of the 265 cross sections of this country. This is why I propose to deal briefly and simply with the impact which has been made on the people of the country from which I come by the proposals and the legislation of this government.
One of the things I was primarily concerned in for some years and in which the people in my area were tremendously interested was the construction of a great national project in the form of a railway through the Peace river area into the Northwest Territories terminating at Pine Point and at Great Slave lake. Last fall this measure was passed. I should like briefly to recount to the members of the committee what has been the effect of the action taken as a result of this legislation. I should like to read and to put on the record a news item appearing in the Edmonton Journal. I am sure hon. members opposite will not be prepared to question articles appearing in the Edmonton Journal. Under date of August 22, 1962, the following article appeared in that paper under the byline of Rod Hayter, an experienced journalist with a knowledge of northern affairs who had made a careful on the spot survey of this railway and the extent to which it had progressed. The headline is "Great Slave Lake Railway Will Spur Exciting Northern Development" and the article reads in part as follows:
The Great Slave lake railway will be one of the most important small railways ever built.
The line will be another phase of Canadian history ranking in importance with such projects as the all Canadian natural gas pipe line and the opening of the ore fields in Quebec and Labrador.
Since that time what has happened? Since last fall 180 miles of right of way have been cut out. Contracts have been let for another 180 miles. On the first 180 miles contracts have been let and a large part of the actual grading has been completed. Track laying commenced last August. I have not the most up to date report but at this time I believe the track will have progressed to a point approximately 45 miles from railhead. The C.N.R. authorities have indicated that this line will have been pushed to a distance of approximately 73 miles by later this fall. This will mean, Mr. Chairman, that 8,000 to 10,000 farmers living in an area extending for 50 miles around the line, who have waited for many years for an opportunity to market their commodities, will have a chance to haul their grain to communities and towns much closer to where their farms are.
All this has meant the expenditure of millions of dollars. Thousands of jobs have been created and given to people not only

from our part of the country but from all sections of Canada, from other parts of Alberta, from British Columbia, Saskatchewan, Manitoba and eastern Canada. All during the course of this winter hundreds of men will continue to be employed in cutting out the right of way and building bridges.
But there are collateral benefits. Naturally the construction of a great national project of this kind must necessarily involve the expenditure of large sums of money; but our point has always been, and this was the attitude taken by the government in promoting this project, that this would result in generating far more than the actual work involved in the building of the railroad. This has proven to be the case. I refer to another news item which appeared in the Edmonton Journal of the same date. It is a brief item which states that Mr. Jewett, the president of Pine Point Mines Limited, was reported as having said that Pine Point construction would start next summer. That is the summer of 1963. This construction is being carried on pursuant to the agreement worked out and placed on record at the time the legislation was passed last fall. What is involved in the beginning of the construction of the Pine Point mine? This was put on record by the Minister of Transport when, in speaking on second reading of the bill to provide for the construction of a line of railway to Great Slave lake, he said, as found on page 8503 of Hansard for September 18, 1961:
Construction of the railway line will bring about major new construction projects, namely, a $21 million mining camp at Pine Point; $16 million expansion of the plant of Consolidated Mining and Smelting Company, at Trail, B.C.; a $2 million community development at Pine Point-
That is a total of approximately $40 million. But there are other things, Mr. Chairman. In our part of the country we have benefited from many aspects of the programs and legislation of the government but in particular from three major policies which, like three streams, have met and merged and flowed over the country like a great river at flood in the spring, bringing tremendous benefits, enriching the land and conferring great and substantial benefits upon the people. I refer to the programs with relation to agriculture, northern development and transportation.
I have talked about the railway and have said that it is proposed to reach a point some 70 miles from railhead this year. Now, if I may, I should like to deal with agriculture. I have a news item here taken from the Peace River Record-Gazette of August 2 last. This is a local newspaper published in my constituency. These newspapers are factual, non-partisan, independent and report things as they see them, a practice which might well
Ways and Means
commend itself to other journalists. The news item is headed, "Plan Four Elevators at Manning", and reads in part as follows:
A representative of the United Grain Growers Limited in Peace River said Tuesday that four elevator firms including U.G.G. will be placing elevators in the town of Manning starting this summer and expecting to be finished in October. The three other firms will be building new elevators; U.G.G. is moving one from Grimshaw.
The article goes on to say that the elevators will have a total capacity of half a million bushels and will cost approximately a third of a million dollars to build. In the Grande Prairie Herald-Tribune of August 7 last, another newspaper published in my constituency, there is an article headed, "North Land Rush Biggest Since War", and reading in part as follows:
In the biggest homestead rush since pioneer days, the Peace River country has caught the fancy of land seekers from across western Canada. Reviewing the cascade of inquiries about holdings in the north, district lands supervisor Tom Gorman said Tuesday morning in Grande Prairie the activity has topped even the busy post-war period of 1946 and 1947 .. .
Officials said an average of 60 to 70 persons daily had been calling at the office.
The office in Grande Prairie is one of two land offices, the other one being in the town of Peace River. These articles bear out the observations I have made personally, which indicate that from all over Canada and the United States 150 to 200 people a day have been coming into our region seeking to take up land and discover for themselves the benefits which this government has been conferring on the farmers, something which did not exist for a long time. I did some farming myself before I came to Ottawa but I found that under the previous administration it took a fairly good law practice to keep up a farm in those days.
I should also like to refer to an editorial in the Herald-Tribune of October 16 and I do so because I have heard from hon. members opposite a lot of doom and gloom about agriculture and farming and I think there should be an answer. The editorial is headed, "The Real Key To The Future", and reads as follows:
As the last of the harvest comes in and autumn winds riffle through the tinted bush, vast areas of "the Peace" are stretching to wakefulness after generations of slumber. A new symphony of sound is echoing in huge tracts of bush-covered land stitched to long settled parts of the Peace river country . .. The rush which began picking up steam early this year shows no sign of tapering off. By the end of the year, up to half a million acres of new potential farmland may have been taken up.
It is not only the settlement of the land, Mr. Chairman. For many years we found it difficult to secure any form of assistance for the farmers of that area by way of farm

Ways and Means
loans. My best estimate would be that in all the 22 years during which hon. gentlemen opposite held control of the reins of government less than $100,000 was lent to farmers for the purpose of generating and building up their productive capacity. I have a news item here from the Herald-Tribune of October 12 which is headed, "$2.6 Million Loan Tally Bolsters Farms In North". So we have $2,600,000 by the middle of September this year, $2,500,000 last year and about $1,500,000 for the year before, or almost $7 million in less than three years compared with $100,000 in the preceding 22 years. This has had additional benefits, Mr. Chairman. As the result of the inflow of people to our area, as a result of the fact farmers have been able to improve their holdings to increase their productive capacity, it has been estimated by those who know that holdings of approximately 2 million acres now under cultivation in the Peace River area have been increased in value by no less than $10 an acre for the entire acreage. This would mean to the farmers of the Peace River area about $20 million.
Now, I leave agriculture to deal with lumber. We have a diversified economy in that area. Under date of September 28, 1962, I notice an article in the Herald-Tribune headed, "Lumbermen Plan Big Winter Cut". The article reads, in part:
Plans for a bigger-than-ever timber cut in the Grande Prairie area were unveiled this week by the city's major lumber and plywood producers.
One company alone is planning to cut about 50 million board feet for lumber and plywood purposes. This will be duplicated in all three forestry districts of the entire area. As an aside, Mr. Chairman, it may be of interest for hon. members to know that in discussing this matter with those who are engaged in the lumbering business, I found they were most pleased with the devaluation of the dollar by the government, and suggested this would mean $5 or $6 extra per thousand board feet in their pockets.
Then, I should like to deal with gas and oil. I have here a news report from the Record-Gazette which has the following headline, "Shell Plans to Build Gas Plant at Worsley". This refers to the construction of a pipe line and gas processing plant in the Worsley district which will involve the expenditure of millions of dollars.
It is not necessary to stop there. All this activity and increase in population in the urban communities and farming areas has had a marked effect. The Herald-Tribune of October 5 carries a heading, "Building Strides Near $4 Million". This one community, according to the article, will have a building

construction program involving an expenditure of $400,000. The same situation prevails in other communities. It has been estimated, Mr. Chairman, that there will be no less than $12 million to $15 million spent in new housing, new plants and other construction in the urban communities of this constituency of less than 80,000 people.
The Herald-Tribune of October 5 carries an article to the effect that the area will have its first television programs within two weeks. This means that 75,000 or 80,000 people will, by the first week in November, enjoy the same opportunities and facilities as other Canadians, and will be able to tune in for the first time to television. This has involved an expenditure of several millions of dollars, not only in the construction of the television facilities but in the sale of new television sets and the construction of the microwave lines for carrying programs.
I go on from there, Mr. Chairman. This is something which will be of interest to hon. members opposite. The Grande Prairie Herald-Tribune has this headline, "Jobless Total Tumbles". The article reads in part:
Spurred on by a healthy construction pace during September, unemployment has dropped to the lowest ebb in two years in the Peace River district, it was noted this week.
"The job-seeker list we have is the lowest since the office opened," said national employment service manager ..
This comment applies to every part of the country. Now, Mr. Chairman, I put all this on the record because I have heard hon. gentlemen opposite talking about spurring on the economy, getting Canada moving again. I should like to call to their attention the fact that in September of last year we brought before the house a bill for the construction of the railway needed in the Great Slave area. One would have thought that hon. gentlemen opposite would have been the first to do all that they could to see this measure become law. However, after putting as many roadblocks as they possibly could in the way of the bill, on third reading they moved a motion for a six months' hoist. This would, in effect, have killed the bill. When the house divided on the motion for third reading, the official opposition voted against it.
I suggest, Mr. Chairman, that if they had had their way very little of this tremendous expansion which took place in my constituency, and of which I have presented convincing evidence, would have been brought about. I would suggest to hon. gentlemen opposite that the noise they have been making hides a very weak case. I was trying to think of an apt term which described their performance during the course of this debate, and my mind turned back to a very funny movie I saw once entitled, "The Mouse that Roared".

In my opinion, nothing else could better describe the actions and words of hon. members opposite.
Now, Mr. Chairman, I am convinced that other hon. members, if they had the opportunity and the time, could present an equally good record to this committee. This proves that, far from what has been suggested by hon. members opposite, the economic policies of this government have been sound, have been effective and have resulted in a substantial increase in the standard of living of the people of Canada.


Mr. Addison:: Mr. Chairman, on the first occasion on which I speak in this house, I should like to congratulate you on your appointment as chairman. In the past, the people of York North have entrusted their parliamentary representation to notable Canadians. The history of the constituency is marked by men who well understood the principles of representative and responsible government. It was in York North that William Lyon Mackenzie began his famous march on Toronto to upset the family compact. It was York North which later elected Mackenzie's grandson, Right Hon. W. L. Mackenzie King, to represent the constituency, when he was Prime Minister of Canada. It was York North which sent to parliament Mr. King's early and great political mentor Sir William Mul-ock, and Sir Allan Aylesworth. It fell to Sir William's son, the Hon. "Bill" Mulock to follow in his father's cabinet footsteps. I shall not refer to all of my predecessors, but I should like to mention Mr. Jack Smith who represented the riding so well and so effectively. He was very much in the great tradition of York North. Nor do I want to let this occasion pass without referring to my immediate predecessor Mr. Cecil "Tiny" Cathers. He was, and remains a fine gentleman and a generous opponent.
Our riding of York North is a miniature of Ontario. We have in York North really the extension of the great metropolitan area of Toronto. We are urban, suburban, exurban, rural and resort country. We have large market towns and small villages. Almost nowhere has the population increased as rapidly as in the southern part of our constituency. Once our riding was primarily a rural riding with a few notable and historic towns such as Richmond Hill, Newmarket, Aurora, Markham and Sutton. These towns remain but they have grown much larger. They are important suburban communities. One of the problems that has arisen in our riding is that of commuting. A great number of our people in the riding of York North travel 50 miles each day to work. Many of these people work in Toronto and the surrounding area. Additionally, a very large
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proportion of our people work in industry and in small business within the borders of our constituency.
On a broader plane, Mr. Chairman, I would like to say that a social revolution is occurring in our time and I want to pay particular attention to this social revolution as it affects our economy and as our economy affects it. I refer to York North because I think it is significant. It is directly affected by the modern movements of which I have spoken. It is symptomatic of a changing North America and the effects of this change on all governments are exceedingly important. Governments, however, and legislatures have been slow to realize and recognize the importance of this change that has come about after 30 years of development. A mobile society has been created in our suburbs and our exurbs, but it has done far more than that; it has changed the internal character of our older rural areas, and as a result what we have now are centralized merchandising areas that are made possible by the ease of automobile transportation. This has altered the pattern of our economy and also of our whole society. This has given us new problems and these problems have been ignored. If we continue to ignore them we are going to be faced with a very unsound economic future.
Living has not only changed as far as areas are concerned; it has changed as far as buying habits and distribution are concerned, with regard to work and to recreation. We no longer today have arbitrary borders between cities and country, or between one community and another. People move from one jurisdiction to another for work, education, recreation, buying and selling. The facilities of one area are often today used by the residents of adjacent communities as much as by their own residents. And taxation is very much affected by all this. The distribution of municipal, provincial and federal revenues is very much involved, and yet very little has been done to study the character of this change in our social economy, let alone to try to find any permanent solutions that this situation has created.
In its very nature this kind of mobile society has forced more attention from federal governments and has added national responsibilities even though centralization may be resisted. Yet as this happens, there is a real paradox in our Canadian way of life. While federal government more than ever exerts direct control of our affairs, these functions are being thrown back to municipal and provincial interests. Federal government has got so big or so complex that it has gone beyond the ordinary man's comprehension and

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world affairs, as far as he is concerned, are now occupying the federal government's deliberations.
I think we are significantly aware in the last few days, with the Cuban crisis, just how this situation has arisen. We should realize, from this example, that the average taxpayer fears, most unfortunately, that it is all too big for him to grapple with. As a result he often turns to things that are closer to him and things that he is capable of changing. Yet, again the paradox. Provincial and municipal authorities are in turn forced to seek more attention from their central government. This places a new and heavy burden on the members of parliament. It becomes their duty and responsibility to maintain a close awareness of what their government is doing, and to keep in touch with world affairs and keep their constituents constantly aware of what is happening.
As I say, people are more and more faced with the problems that they were not faced with previously. Yet we are trying to operate today under a method and system of government that existed a century ago. I, like so many people-and I think this is indicative, after the last election-now entering public life for the first time have been attempting to find some solution to these problems. I for one suggest that these solutions are hard to find because, as I said earlier, we have learned so very little about our real situation and its origins and ramifications.
Some things we do know about our country. We know that the small businessman and the farmer is under ever increasing pressure from taxes, overhead costs, competition from chain stores and massive discount houses, and from the difficulty of raising operating capital and from high interest rates. We know also that smaller industries are under similar restraints, but that additionally they are affected directly by the national trade policies of our government. I suggest that these people are seriously in need of help which they, as individuals, cannot provide by way of research and trade information but which their taxes should provide through government agencies. I suggest that we, as Canadians, should look closely at other countries that have been successful in this sphere.
I refer to the October 22 issue of the V.S. News and World Report, which refers to the tremendous growth of Japan's industries. Many think one of the big reasons for Japan's success is her government's policy toward business. The government, through an economic planning agency, the bank of Japan, and other agencies, sets the course and pace for economic growth. Then it leaves the job to private enterprise. It is a business-minded government, and national budgets usually

show a surplus. If there is a deficit, it is small. Private investment outruns government investment three to one. I am very much of the opinion that we have been resting on our oars, so far as international trade expansion is concerned. I am of the firm belief that:	(1) Export trade can only be
expanded by an intelligent appraisal of our national resources to evaluate to what extent we can increase the Canadian labour content in products of these materials. (2) Secondary and service industries along with labour must look to world prices rather than charge what the traffic will bear in their pricing policies. (3) We should recognize that there is going to be a reduction in our Canadian tariffs and prepare now for competition so that our own domestic markets will not be completely disrupted. (4) We should take our products to the potential buyer. I doubt very much-an hon. member has mentioned mice-that if we were to build a better mousetrap today the world would beat a path to our door. But I do feel that in each of our potential trade areas we should establish a showcase of Canada's manufactured goods, free of charge to the exhibitor, on a revolving schedule, so that we could show our manufactured products in the country in which we choose to sell them. (5) We should analyse carefully and professionally the potential markets and then bring products that are manufactured in other countries to Canadian manufacturers and encourage them to produce them in this country for export. I am also of the opinion that at the present time we are exporting products we make for our own industries and population here, and we therefore must look to and accept products from other countries, analyse them here, and then produce them for export only. We should have tax credits and incentives to encourage our industry to produce products that will sell at competitive world prices.
In a debate such as this we might contrast the banking system in the United States which, to a large extent, operates on a local level and is often family owned in small areas, with our present banking system in Canada which is operated on the branch system. There is something to be said for the banking system in the United States where the personnel of banks remain reasonably permanent in any one area, and where the prosperity of a bank in a particular community depends on the prosperity of the community and on the bank's ability to lend money in that community. We should perhaps look for greater integration of banks in Canada with the community.
Restrictions on lending have the unfortunate effect of creating the cycle they attempt to avoid by holding down business activity at a time when the country is sorely in need of

business expansion. Mr. Fraser Robertson, in his column on the financial page of the Globe and Mail suggested that money is tight or easy by degree. He went on to say that without high interest rates money for investment would be even scarcer than it has been, and said free marketing and free trade go along with a free money movement. This may be so but it is hard to find any flow of easy money in Canada today. Mr. Robertson holds that we must win confidence by presenting prospectuses for our future more attractive than those presented by developers of other areas, so that those who control money will invest it in our country. I suggest that he is talking about confidence generated by the government in this context; but over the period which the Conservative government has been in office any person in business has had to look very hard to find stability in Canada's financial situation.
There are various ways to restore confidence in our country. There is room for expansion of the industrial development bank, and I also suggest that a ministry of industry and small business be established. This is important, so that we can set up research facilities and provide assistance to keep this part of our economy moving ahead. Borrowing is not enough. Money does not cure all problems. The small businessman or farmer needs the guidance and experience of trained personnel.
I suggest that the area of small business is not in good order today, and that is not entirely the fault of the businessmen themselves. They are being trapped by broader things. With such a department the government would be in a position to provide some focus in this field. In saying this I am fully aware of the danger of intrusion by government into business and private enterprise, but I do not suggest that it is a question of planning or not planning. That really is the doctrine of the '20's and '30's. Since then we have learned a great deal about planning, and we know that the right kind of planning is essential for the growth of the country.
I am not so interested in total or centralized planning which is done too far from the source of the social and business conditions *concerned. I am thinking of long term assistance and incentive to regional planning for the sensible and prudent use of available resources. It is interesting to note in this context that the only country behind the iron curtain which has no food problem is Poland. The reason it does not have this problem, which is one shared by Russia, Czechoslovakia and the Balkan countries, is that planning is done for these other countries from Moscow, but planning for Poland is done from Warsaw. The Poles refused to deliver from collectivised farms and when the communists found that
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the Polish farmers simply would not deliver, they modified their schemes and permitted a return to private farming.
We should also consider the worrisome question of price maintenance. Discounting and price slashing have made it almost impossible for the small businessman to make a profit, let alone survive in business or industry. I realize that talk of price maintenance to some extent smacks of combines, and that combines are not popular. However, there must be a middle way, a sensible compromise which allows for reasonable floors under prices and which prevents the dog-eat-dog tactics which marked big business in the United States in the days of the Vanderbilts and the Morgans.
The fight today is between powerful concerns in the consumer goods field competing against local stores in the same field. I am not advocating control, but socially we need small business and industry, for many reasons. First of all, there is local investment and close concern with the community. Then there is the contribution of taxation and the matter of leadership and support given to local areas by small businessmen and industrialists. There is also the provision of varied employment, and there is the convenience.
I suggest that what we and our economists have been doing is looking at only one side of the issue, the economic side. We have thought very little about the social cost to our communities, through our failure to help the small businessman and farmer meet the tremendous obstacles facing them at present.
All business, in the broader sense, is affected because Canada in recent years stopped expanding. This was not necessary and it should not have happened. European countries, which we were reluctant to recognize, have done things we are astonished at today. France, even in face of the tremendous crisis in Algeria and general political turmoil, kept its economy expanding at a healthy rate. This was done by a system of federal planning which co-ordinated the policies of government, business and labour. This is the kind of function I have in mind when I speak of planning and co-ordination with the assistance of a special government department of industry and small business.
In the past we have allowed ourselves to be taken in by the extremist positions of the far-rightists and the far-leftists. We have listened to the cries of the socialist party in this country as it preached doctrines that were tried and thrown out by the British a generation ago, and by Europeans more recently. We have seen them perpetuate an antiquated class war between labour and management, or more accurately between

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labour and capital because management today is not necessarily capital and management does not often imply ownership.
Of course the rights of labour exist and must be respected as much as the rights of capital and management. Anyone who would dispute this is living in a different era. If there is no partnership between them, then business and industry cannot compete in world markets, but just as the rights of labour must be respected so must the rights of those who provide management and capital. Not only is there room for co-operation, but cooperation is essential.
Anyone who is up to date in his economic and social thinking knows that extremists of either capital or labour, who attempt to maintain conditions and attitudes that were prevalent 30 years ago, are beyond help. Management, labour and capital have to come together and work out their problems together. This has been done in Europe, in countries such as Germany, France, Belgium, Switzerland, and more increasingly in Italy. As an interesting example, new ideas in the field of co-operation have made us here in Canada appear a generation behind the times. Many of the ideas we are tentatively exploring have been accepted in full body as practical measures in these countries, and it is about time we modernized our ideas here in Canada.
There is one more subject that I would like to mention, and only briefly because I am not a sufficiently informed authority in the field to talk about it at any length, and that is taxation. I am quite convinced that the small businessman has been made to bear an unfair and overweighted burden of taxation. This is one of the reasons his survival is so difficult. Surely the time has come when federal, provincial and municipal authorities must get together and try to work some sense into this problem. The old fears of stepping on one another's toes are antiquated, and a new co-operation must be found here, just as between capital, labour and management in private business and industry-established in the face of harsh realities. A Professor William M. Partlan of Fordham college in New York city offers a scheme which I think is interesting in connection with tax cuts. Some people today think we should have higher taxes, but this eminent teacher puts forward some very strong arguments to show how, properly handled, income tax cuts could enliven the economy and increase national spending.
Europe has over the past years known what we consider full employment. Apart from wartime, Canada has never experienced it. Indispensable to full employment is a continuing growth in economic development.
[Mr. Addison.l
Even in a country such as the United States* which, of course, Mr. Partlan is mainly concerned about, there is a great distance between full employment and what exists now. So here, in Canada, we have not only to catch up from a long way behind but we have to induce a much faster growth, once we have come level with what we could consider a minimum position for ordinary prosperity. Tax policy at the federal level has much to do with this. As I have said, the right kind of tax cuts would go a long way to spurring such development.
The purpose of income tax cutting should be to increase purchasing and saving power among the masses of the people. Cuts at high level incomes do little to affect this, and cutting taxes at the top income levels adds very little to the savings and spending of our country. Let us refer to family spending units and consider them with regard to taxation rather than as individuals. Normally, only one or two individuals in a family are what we consider wage earners, but the family outgoings are handled by several people. The wage earner ordinarily does not support himself only; he supports his whole family. It is true that exemptions take this into account, but the tax structure today makes personal income tax primarily a personal tax. Partlan's idea is that the federal income tax should be based on family rather than personal income, and he holds that a proper cut would necessarily be a personal income tax cut with a very careful estimate of the impact of the cut on family spending. Using his own country's statistics he shows that the middle 50 per cent of all income tax returns in the United States is in the disposable income area between $2,085 and $6,580. This is where most of the income taxes come from. He shows that this group takes in about 30 million families, perhaps 120 million people, or nearly two thirds of the entire population of the United States. To state it simply, then: for almost all people in the medium income tax brackets, a progressive income tax rate means nothing, since there is little progress in their income; and when there is, family extensions and new requirements take it up.
There is, therefore, a group of the population that pays a basic rate, and a cut in such a rate would affect family and national spending as well as potential savings, almost, I would suggest, to the full extent of the tax cuts. This would stimulate economic growth by augmenting purchasing power in his own country of the United States, of two thirds or more of all the nation's family units who would reasonably be expected to spend or to save all of the additional take home pay.
The belief that all of the money left for family spending by an income tax cut would

go immediately into consumer goods and services is reasonable. Most families are far from having what they reasonably desire, other than the necessities of life. Professor Partlan holds that even a 1 or 2 per cent increase in his nation's total consumer expenditures would be enough to accelerate investment and stimulate economic growth. But he agrees that it would be most difficult to determine what the size of the cut should be. However, he maintains that the higher level of spending from such a cut would probably offset the government's loss in revenue resulting from this cut. Certainly any effort to raise spending, increase demand, and consequently production, is a worth-while one.
In particular, Canada might well think about this scheme, since we have so many smaller industries and so much small business which would benefit by consumer spending directly. It is family spending units which do most to energize the economy by their reasonable requirements. Being realistic, we in Canada certainly know large numbers of families are far from having the purchasing power which a modern industrialized society should give them. There are many thousands of families in urgent need, and some in extreme need, of things which people in higher income groups take for granted as necessities. There is no question but that the additional money allowed by alteration of income tax would go quickly to useful purposes. It would also have a lasting and important benefit to our total economy if we tried to provide frugal comfort for all our people.
(Translation):


David Réal Caouette: Mr. Chairman, before making a contribution to this debate, I want to set the record straight as regards a statement, an allegation, made in an editorial of the October issue of the magazine the Legionary, I find the following about myself.
This politician recently elected to parliament-


An hon. Member:: What is wrong with that?


David Réal Caouette: -is supposed to have said at a press conference:
I am still quoting:
I have just taken the most shameful oath in my life, I just swore allegiance to Her Majesty the Queen of England.
Now, Mr. Chairman, that statement is an utter falsehood. I never uttered any such statement. I have never given any press conference in the course of which I stated anything of the sort.
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If the reporter or the editorial writer who took it upon himself to make that accusation is a responsible man, I ask him, from the floor of the house, to publish an honest retraction in the same newspaper.
However there is nothing surprising in the attitude of reporters and editorial writers toward Social Credit. The reason is that we have been bothering them pretty much for many years. They always try to represent us in a wrong light, in a false light. They put in our mouths words that we do not say in order to be later in a better position to raise objections to their own creations or fancies.
Mr. Chairman, we could not care less about what those newsmen write-and I told them so many times-whether it is favourable or unfavourable to us, for six months or a year, since on television we can easily reply to them in 15 minutes and settle accounts with them.
Mr. Chairman, in regard to the revised estimates where the Minister of Finance announces cuts of the order of $227 million, under the pretence that we must live up to our international commitments, that we must even out the unfavourable balance of our trade or even make it favourable. I do not think that that is the way towards acceptable prosperity, a true prosperity for Canada.
A reduction of $227 million was made, $18,200,000 for public works, $6,400,000 previously allocated to agriculture and other departments, so that they amount to a total of $227 million.
They are proud of those reductions from the Fleming budget of last February or March, in order to ensure the economic stability of the country; they claim that those reductions would stabilize the economy to the advantage of the country. It is the opposite that will happen.
When we reduce the estimates of such departments as public works, agriculture, colonization and others in the country, we deprive them of their means of existence, we stop them from carrying on their operations and normal development.
Thus, we give rise to more unemployment, we increase the number of unemployed in Canada.


An hon. Member:: Let us vote against.


David Réal Caouette: Everyone is in favour of-


Mr. Rouleau:: Yours is a morganatic marriage.


David Réal Caouette: Wait and see.

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Mr. Chairman, what I and the Canadian people find astonishing is that Canada's economic activity is being restricted by a cut in the budget expenditures, while the Minister of Finance, in the newspapers, on the radio and in the house, talks about what he calls a tremendous success.
The government has announced that its deficit will be $175 million less than what was forecast last February or March, but it still remains that the deficit amounts to $540 million.
A few days ago, the hon. member for Lapointe (Mr. Gregoire) stated that the interest on the national debt alone is higher than the deficit. Yet, instead of penalizing those who charge us interest for a fictitious debt, make-believe credit, it is the Canadian people, men, women and children who are penalized. Let us cut their supplies but let us keep on paying interest at the rate of $800 million a year. Those $800 million are sacred. Nobody questions that. No austerity program is being introduced for Canada's financiers.
An austerity program for the human being in Canada is proposed to us. Well, we of the Social Credit party, are of the opinion that when it is necessary to apply an austerity program in this Canada of ours we should apply it first to finance and free the country so that we will have prosperity for Canadians.
Mr. Chairman, the important cuts announced in the revised estimates will result in still greater hardship in Canada.
One need not have gone to college, be a lawyer or a scientist or an economist to understand that international communism- or even national communism-has its cradle in cases of national hardship. As long as misery will prevail within abundance-and I can see that the Minister of Finance is at his desk-as long as we shall accept misery to exist within abundance, all such cases of hardship will be as so many dynamite sticks inside our Canadian social structure, which someday the communists will ignite.
This afternoon, I heard the Prime Minister (Mr. Diefenbaker) speak about the danger which the grave Cuban crisis represents for us, this crisis which could easily start a nuclear war tomorrow, or the day after. He told us to be ready.
Mr. Chairman, the moment war comes, be it tonight, tomorrow or the day after,

I am convinced the financial question will be quickly solved in Canada to enable us to wage war and defend our country.
But when Canada has 500,000 unemployed, human beings, our fellow Canadians, our electors, people in our constituencies, living in dire poverty, this is not considered an emergency which calls for an immediate meeting to deal with their cases and seek to alleviate their misery. They are cast aside, they are promised the moon, they are told to be patient, they are allowed to exist by means of unemployment insurance benefits, but to give them a Canadian system, an economic system through which each one of them could develop freely, no thought is given to that.
On this side of the house, hon. members rather share the views of the hon. member for Laurier (Mr. Chevrier), and like him, they attack Social Credit without knowing what it is all about. Other hon. members reflect upon the Social Credit philosophy and say we will cause inflation. And some newspapers such as the Toronto Telegraph or the Toronto daily Star do the same. After my recent visit to the Toronto junior board of trade and to the Montreal Canadian Club- where we had 1,300 people at a luncheon talk-I had the pleasure of meeting many businessmen, small merchants and professionals of all categories, who live in anxiety in Canada.
Everybody is concerned-small businessmen, professionals, labourers, in short everybody is in doubt in Canada. To this economical and financial anxiety that we know at present, anxiety about a war, a war possible within a few weeks, is now being added.
Mr. Chairman, we are being criticized, we of the Social Credit. I have in hand an editorial from the Toronto Telegram in which I read this:
(Text):
Distribute lots of money so that we can all buy everything we want. Oh boy!
(Translation):
That is from an editorial writer; it is such a man who calls Social Crediters empty heads in the country. When we read such sentences, we are justified in wondering where are the empty heads in the country.


Some hon. Members:: Hear, hear.


David Réal Caouette: I just heard one applaud on a desk.
(Text):
"Whatever is physically possible should be made financially possible," Mr. Caouette is quoted as having said. Who could quarrel with that?

(Translation):
Who can ask questions on that when in addition we do not agree? But what is proposed to realize a financial balance? Absolutely nothing. They go on criticizing Social Credit.
(Text):
Mr. Caouette is dead wrong when he indicates that an understanding of Social Credit is beyond the capabilities of the average business executive. It isn't. It is as uncomplicated as that familiar thing we know as inflation.
(Translation):
What is inflation? There may not be lour members in this house who know what inflation is. There are politicians who, during the election campaign, spoke about inflation to some unemployed. These people were being told that there was inflation because they had too much money in their pockets, while they did not have a cent. And they were made to cheer just the same, for they were made to feel that they had too much.
Inflation, Mr. Chairman, is what comes when we have money on hand and there is not enough production to guarantee that money. When there is no production and there is money, that is where you have inflation.
Today, it is the opposite. I wish they would stop raising the cry of inflation when deflation is what we have in Canada, because people do not have enough money to buy all the different kinds of products we have in this country.
That is the problem, to balance total production and purchasing power, even if the hon. member for Laurier tells us that the whole production is sold annually. That is probably why the Liberals, when they were in power, and now the Conservatives, paid western farmers not to produce any wheat. Also, that is probably the reason why all across Canada our people's income is mortgaged with finance plans for the next four, five and six years. Go and ask the retailer, the wholesaler, the manufacturer if the whole production is disposed of. Skills are being disposed of, but not the whole production.
(Text):
In essence it is the theory that if people need money the government should print it for them and pump it into the economic bloodstream until everybody has everything.
(Translation):
That was written by a newspaperman. Those people think they are informing the public. That is the way the Canadian people have been informed in the past, not only as regards Social Credit, but on anything which hurts Queen Finance in Canada.
(Text):
This, however, is not the real danger. Social Credit has been tried before in Canada-
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An hon. Member:: Where?


David Réal Caouette: That is it. Where? (Translation):
If you ever saw a man in the moon, he is the one. He does not need Khrushchev to send him up because he is there already. (Text):
Social Credit has been tried before in Canada as an economic practice, and has failed.
(Translation):
Social Credit failed in Canada when our supreme court repudiated all the laws passed in Alberta in 1937-39, 1941, 1944, 1947. The Social Credit government did not manage to get a bank charter, but the same charter is entrusted to some individuals in Canada in order to allow them to control the economic blood of the nation so that without an authorization from the chartered banks-the hon. member for Laurier is aware of that, he is a bank director-none has the right to breathe in Canada. The right to breathe is left to the discretion of the chartered banks of the country.
(Text):
For a group of sensible men of reasonably good education to listen to Mr. Caouette and be carried away by his oratory to the point of admiration is incredible ... The day that any substantial number of Canadians vote for a man who tells them they don't have to understand his policies to approve them, we are in very real danger.
(Translation):


Some hon. Members:: Oh, oh.


David Réal Caouette: Mr. Chairman, how easy to make fun of the opponent's point of view from across the house. Wait and see what are the views of our friends opposite.
(Text):
The Socreds promise opiates: indeed opiates seem to be the religion of the party.
(Translation):
Our Socred doctrine would be an opiate,, our Socred creed would be an opiate. Well, I would say that the beliefs or the deceit of such a newspaperman, if that is his religious opiate, will not take him very far. If his creed is to publicly and boldly utter falsehoods to the Canadian people, this columnist does not serve the people.
We can find about the same thing in the Toronto daily Star:
(Text):
You don't have to understand Social Credit to vote for it.
(Translation):


An hon. Member:: That is what you said.


David Réal Caouette: Not in those terms. What I said in the course of the electoral campaign is that one did not need a full understanding of Social Credit to vote for the party.


An hon. Member:: Only for Caouette.

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Another hon. Member: You have nothing to lose.


David Réal Caouette: Mr. Chairman, as I stated, most of those who voted for the Liberal party at the last general election did not even know for whom or what they were voting, since the Liberals had no program.
Therefore, I ask the hon. member for St. Jean-Iberville-Napierville (Mr. Dupuis) to tell us what he knows about the doctrine of the Liberal party, because it is without any policies, either economic, political or social.


Mr. Dupuis:: If you like to know, I can answer immediately.
(Text):


David Réal Caouette: You don't have to understand Social Credit to vote for it.
(Translation):
Mr. Chairman, I often reminded the house that I was a car dealer. Now, when I sell a car to a customer 1 do not explain to him how many teeth there are in the crown gear and on the pinion of the differential. I do not tell him either what is the ration of displacement of the piston within the engine.
Mr. Chairman, the member for St. Jean-Iberville-Napierville drives a car, but I would bet my best shirt that he knows absolutely nothing about a car engine, but yet he drives the car.


Yvon Dupuis: Do you sell cars on the instalment plan?


David Réal Caouette: For 22 years we have used a Liberal engine in Canada, and that is why we have been in the ditch ever since. We must recognize that those who were driving had no idea where they were going and where they were taking us. Those people are ready to blame anybody. The present government do not give us better leadership. Both are exactly alike.


An hon. Member:: They are identical.


David Réal Caouette: What difference is there between their financial doctrines, their political methods, their financial backers? Tell me who pays the bill and I shall tell you who gives the orders: the financiers.


An hon. Member:: Why do you always vote with the Conservatives?


David Réal Caouette: Exactly because we do not want to vote for socialists.


An hon. Member:: Where do you get your money from? Doesn't Mr. Bennett give you any?


David Réal Caouette: No, sir, nor the Liberals.


Rémi Paul: Order. I wish to remind the hon. members that when they wish to ask a question of the hon. member

who has the floor, they must ask his permission. Otherwise we cannot have an orderly discussion and the noise prevents us from hearing the remarks made by the member who has the floor.
(Text):


Mr. Berger:: Would the hon. member permit a question?


David Réal Caouette: As soon as I am through I will. I only have 20 minutes and I need about two and a half hours to deal with the Liberals.
(Translation) :


Yvon Dupuis: Mr. Chairman, could I ask the hon. member for Villeneuve a question?


David Réal Caouette: No, not any more than the other member. It is the same thing.


Yvon Dupuis: If you use up your 30 minutes, I will not be able to ask you a question.


David Réal Caouette: Perhaps I will be allowed five minutes more. I will then have 35 minutes and you will be able to ask me your question.


Yvon Dupuis: I think you are scared.


David Réal Caouette: Then get on your feet and ask the question.


Yvon Dupuis: I should like to ask my hon. friend if automobiles are sold on finance at his place?


David Réal Caouette: Yes-


Some hon. Members:: Oh, oh.


David Réal Caouette: -automobiles are sold on finance even to people like my hon. friend for St. Jean-Iberville-Napierville. That is correct. Terms can be arranged for the purchase of automobiles. However, I should like to point out to my hon. friend that if we do so, it is precisely because people do not have enough money to pay cash. I am saying that for his information. That is due to the financial policy of the Liberal government you have imposed upon the Canadian people for 22 years.
Mr. Chairman, the Social Credit party has a political philosophy, a social and economic doctrine. We have economists and people who have studied the Social Credit system and who have-


An hon. Member:: Name them.


David Réal Caouette: Certainly, I am referring to a well-known economist from the University of Montreal, Mr. Kostakeff.


Yvon Dupuis: He is a professor of literature.


Rémi Paul: I should ask hon. members, especially French speaking members, to co-operate with the Chair and to allow the hon. member for Villeneuve to continue his speech.


Guy Rouleau: I rise on a question of privilege, Mr. Chairman. In my opinion, there is no need to make a distinction in the house between French speaking and English speaking members since we are all Canadian members of parliament.


Rémi Paul: I agree with the hon. member for Dollard but I heard murmurs in French; that is why I made that remark.


David Réal Caouette: Mr. Chairman, the economist Kostakeff-


Yvon Dupuis: He is a professor of literature.


David Réal Caouette: In his work entitled "What is Social Credit?", the economist Kostakeff- I thank you, Mr. Chairman, for calling to order from time to time my hon. friends who want to take up my time. I suggest to the Leader of Opposition to do what he promised Canadian children during the election campaign and distribute bubble gum to his own supporters, my hon. friends on this side. It would keep them more quiet for a time.
Here is part of the study made by that economist on the national dividend advocated by Social Credit to supplement the purchasing power, which would permit the purchase of actual goods and actual services existing in Canada.
The national dividend implies the monetization of the new production, carried out by the federal treasury, through the Bank of Canada, so that the additional production may be represented by an additional financial credit made available to the people. In other words, goods are actually available for the dividend and it is easy to create the financial credit required for distribution thereof.
The real answer to the unemployment problem is therefore to create a constant demand for goods by making the money available to consumers-[DOT]
Everybody admits that. When consumers have money, business is good; when consumers have no money, business is slow and everything may even come to a standstill in the country.
-either under the form of salaries or of dividends so that full employement will exist as long as there is an unsatisfied demand for goods.
Thus the dividend represents, in the form of money, the value of the real additional wealth created by the efforts of the people during the year.
Production has been created by the people. It is not a question of creating money haphazardly.
The hon. members who attack the Social Credit doctrine should first of all study Social Credit instead of making it up.
If the banks do not create new and sufficient buying power to balance production, any new additional production will inevitably start a new fall in prices at the producers' level and might result in restrictions on future production.
Ways and Means
In fact, the amount of the national debt at the present time represents approximately the accumulated total of unpaid dividends earned by the people but never paid to them.
This is, in fact, the national debt we now have, on which we are paying nearly $800 million interest a year. Each year, we keep on paying tribute to big finance, paying its salary, its benefits, but Canadians are jobless and living in insecurity and in fear of the future. Neither the Liberals nor the Conservatives have found any solution to that problem, but when we suggest a solution, right away an attempt is made to ridicule Social Credit.
Some people prefer solutions like those offered by Maurice Lamontagne, chief economist of the Liberal party in the province of Quebec and in Canada.


An hon. Member:: That is true.


David Réal Caouette: Here is what he has to say:
So, the proposed remedy, which will perhaps be applied after the war, is much less a result than a start, opening as it does the way to two absolutely contrary systems-capitalist dictatorship and socialism-
He does not say "socialist dictatorship", but "socialism".
But, Mr. Chairman, what is socialism? For the information of those who do not know its definition, I would suggest they refer to the "Concise Oxford Dictionary", in which socialism is defined as follows:
(Text):
Principle that individual freedom should be completely subordinated to interests of community, with any deductions that may be correctly or incorrectly drawn from it, e.g. substitution of cooperative for competitive production, national ownership of land and capital, state distribution of produce, free education and feeding of children and abolition of inheritance.
That is the meaning of socialism in Canada. (Translation):
This is what Mr. Lamontagne was saying:
-socialism under any one of its forms.
Form has little to do with it-you are a socialist.
In a future perhaps less remote than is generally believed, the capitalistic democracies of today will have to make a choice, and the course they will choose will be determined to a large extent by the respective strength of the social classes which compose them.
The solution of the economist who is preeminently a Liberal, is to oppose capitalism to socialism, instead of correcting capitalism.
Therefore, in one way or another, under the Liberals we are sure to turn more and more to socialism in this country and in our respective provinces.

Ways and Means
Mr. Chairman, my speaking time will soon be up-


Some hon. Members:: Hear, hear.


Mr. Maiheson:: Go on. Go on.


David Réal Caouette: Several Liberals, among
others their economist, and various Conservatives said on the morrow of the June 18 election, that the Social Credit people were illiterate, that they had no training, that they were people without any social standing, and that, if we obtained 550,000 votes in the province of Quebec, it was because the people there were discontented. That is quite obvious. If we had been satisfied with the Liberals or the Conservatives we would have voted for them. But we did vote Social Credit, because Social Credit alone is the alternative for establishing an economic system here at home, which will enable the human being to flourish, a system which will definitely submit money to the human person, instead of having the human person enslaved by money, as is now the case.
Mr. Chairman, in this morning's Le Devoir, there is signed by Mr. P. H. Lavallee, an engineer, a concise and simple study of Social Credit which means something. This is what Mr. Lavallee says:
It has always been objected that such a measure is causing inflation-as if there were no middle road between a chronic lack of purchasing power and inflation.
If the issue of supplementary credit is strictly and scientifically controlled, there should be no more inflation than when the Aluminum Company decided to invest several hundred million dollars at Kitimat, or when the Iron Ore and the Quebec Cartier Mining thought they would put more than half a billion in Labrador. There would be no more inflation than when the St. Lawrence seaway or the Dew Line were built; no more than family allowances or old age pensions caused any inflation.


Rémi Paul: I am sorry, but I must tell the hon. member that his time is up.


David Réal Caouette: As I have only two more sentences to conclude my remarks, Mr. Chairman, may I continue?


An hon. Member:: Read out your two sentences.


Rémi Paul: Does the house unanimously agree to the hon. member's pursuing his remarks?
(Text):


Some hon. Members:: No, no.
fTranslation):


An hon. Member:: Order.
(Text):


Rémi Paul: Is it the unanimous consent of the committee that the hon. member shall continue?
(Translation):
I am sorry, but since the house has not given its unanimous consent, I must ask the hon. member-


Lionel Chevrier: Mr. Chairman, I suggest that the hon. member should be allowed to complete the quotation of the few sentences he intended to read.


Rémi Paul: I must ask the house to express its unanimous consent, for the hon. member has had the floor exactly 31 minutes, and we have taken into account the time he has lost on account of interruptions. Consequently he must have the unanimous consent of the house in order to carry on with his speech.


An hon. Member:: Yes, yes.
Another hon. Member: Agreed.
Another hon. Member: Two sentences.
Another hon. Member: Two long sentences.


David Réal Caouette: I am much indebted to all hon. members for giving me the opportunity to carry on.
But there might be a way to balance and stabilize the economy.
In view of the foregoing, the stand taken by conventional economists does not seem unquestionable to me, and I wonder if the second hypothesis does not have at least just as much chance of being valid as the first one.
The letter bears the signature: P. H. Lavallee.
(Text):


Mr. Prittie:: Mr. Chairman, my first comment would be that the hon. member for Villeneuve is just as confused about socialism as he is about social credit and our economic problems. In the interests of national unity I was going to make a little effort in French tonight. I had planned to do it at the end of my remarks in English, but perhaps, following the hon. member for Villeneuve as I do, this might be the time to make that effort.
(Translation):
Mr. Chairman, here goes with my little contribution in French in this house.
There are English speaking members here who now wish to understand French. We try to listen to French speaking members without the interpretation system, but we do not have the co-operation of a few French speaking members.
There are some who speak at a normal speed, but there are others who, like the English say, speak machine-gun style. I am now thinking of the hon. members for Belle-chasse (Mr. Dumont), for Lapointe (Mr. Gregoire), for Villeneuve (Mr. Caouette), for St. Jean-Iberville-Napierville (Mr. Dupuis) and a few others.

In the interest of Canadian unity, I say to those members: slow down.
(Text):
Before dealing with the budget resolutions which are now before the committee, I should like to comment briefly on one or two other subjects. First I want to express my great pleasure on the election of Mr. T. C. Douglas on Monday of this week. I join my colleagues in thanking the people of Burnaby-Coquitlam for the very solid support given to the federal leader of our party. Burnaby has been supporting the C.C.F. and the New Democratic party since 1933, when the late Ernest E. Winch, the father of the hon. member for Vancouver East, was first elected to the legislature of British Columbia by the people of Burnaby. He remained as member for Burnaby until his death in 1957.
(Translation):
Take your dictionary, sir.
(Text):
Mr. Chairman, I was saying that Mr. Winch, the father of the hon. member for Vancouver East, was a pioneer in the field of social reform in British Columbia. As a result of Mr. Winch's persistence very great changes were made in the treatment of the mentally ill in our province. As a result of his efforts, many changes were made in our penal institutions. He pioneered in the field of providing housing for senior citizens, and the first home of its type in Canada was, I believe, established in Burnaby by the New Vista society, which was founded by Mr. Winch. Since his death he has been succeeded by other members of our party, and in the legislature of British Columbia there are now two members from Burnaby representing the New Democratic party, Mr. Gordon Dowding and Mr. Cedric Cox. The riding of Burnaby-Coquitlam came into existence in 1953. In that year Mr. Erhart Regier was elected. He was re-elected in 1957, 1958 and 1962. Certainly my colleagues and I appreciate the part Mr. Regier has played in the recent by-election victory in Burnaby-Coquitlam.
My own riding of Burnaby-Richmond tried and discarded in turn all of the other three parties, and in June of 1962 they did the New Democratic party and myself the honour of supporting us. I trust this happy relationship will continue for many years to come.
Mr. Chairman, I want to make just a few points on the international situation as it relates to Cuba. First, I noted the other evening that the hon. member for Edmonton-Strathcona rose in what seemed to be a very hostile atmosphere and made some dissenting remarks about the Cuban situation. I
Ways and Means
certainly admire his courage for doing that in the particular situation. There is one aspect of the Cuban situation, the international situation, upon which I think some comment is necessary. We understand there are some members of the government who want to equip our armed forces with nuclear weapons. There is a danger that a tense international situation such as exists now, and may well exist in the near future, may be the occasion for attempting to change government policy regarding nuclear weapons for the Canadian forces.
There appears to be no doubt that there are missile bases in Cuba, but I do not know that we can say for sure that these bases are equipped with nuclear weapons. However, if it is later proven that this is the case, I think this fact proves that the spread of nuclear weapons increases the danger of war. We have said many times before that every addition to the nuclear club endangers peace, and we are more than ever convinced that this is so. I was pleased this afternoon when the Leader of the Opposition stated that he too was concerned about the spread of the nuclear weapons club. I took this to mean that he is opposed to Canada having nuclear weapons. I am very glad he made that statement, because I have been disturbed by the tone of questions on matters of defence and external affairs coming from the Liberal benches during the past week. They were beginning to sound like a war party beginning to change its policy on this matter, and I am very glad the leader of the party has put that matter straight.


An hon. Member:: What about what they said during the election campaign?


Robert William Prittie: I do not know about during the election campaign. They just did not seem to know what Liberal policy was on this particular matter. To speak particularly of budget matters and the revised estimates which have been placed before the house, I wish to refer to the estimates of two departments in particular, the Department of Public Works and the Department of Labour, and especially the winter works program. I was very sorry to see a reduction of approximately $18 million in the estimates of the Department of Public Works. Here I do not complain of any reduction in my own riding. As far as I know, there was no estimate for it in the first place. However, in view of the number of unemployed throughout Canada, any reduction in public works spending does not make very much sense.
It would seem that Drs. Diefenbaker, Nowlan and McCutcheon and the other members of the Conservative clinic have looked at poor, sick Canada and have said, "We will

Ways and Means
cure him by starving him". As other hon. members have said, and as most economists have agreed, they have given the wrong prescriptions for the ills of this country. They should be deprived of their licences to practice. I would refer the Canadian people to the excellent clinic headed by Dr. Douglas.
I am pleased to note that the budget slashing has not affected the winter works program of the Department of Labour; at least, as far as I can tell. However, the amount of the government's contribution to the winter works program is only $12J million. This is a very small sum for a country the size of Canada. I want to concentrate on the winter works program for a few minutes, Mr. Chairman. The best that can be said for it is that it is better than no program at all. Some people have obtained work as a result of it, and municipalities have received some financial assistance from the federal and provincial governments.
At this point I think it is well to remind hon. members that the winter works program was suggested to the government by the Canadian Federation of Mayors and Municipalities at a conference called by the Minister of Labour in July, 1958. I wish I could say that the government had initiated the program because it was concerned about aiding municipal development, but such was not the case. The government was faced with increasing unemployment and this was a measure which would help to reduce it a little.
Long before that time the C.C.F. party had been advocating a program of aid to municipalities. It did so for two reasons, the first being that it would provide employment. At this point I would remind hon. members that there was serious winter unemployment even in the wonderful Liberal years before 1957. The second, and equally important reason, was that federal financial aid would help the rapidly expanding urban areas to provide essential public services for their residents.
Those of us who have been in local government in recent years realize the extent of urban and metropolitan problems. Some hon. members may think that it is here in the House of Commons that all important decisions are made. However I suggest that those who serve on city councils are the first to grapple with the problems created by economic and technological change, and that they are carrying some of the most critical responsibilities for public policy in Canada.
Some of the problems are structural, that is they concern the type of government needed in heavily populated regions. The question of metro government amalgamation, or regional government, is one which will have to be settled by these municipalities in consultation with their respective provincial

governments. Here they do not need, nor do they ask for federal help; but whatever the type of local government, there still remains the need to pay for essential services. In this connection the Canadian Federation of Mayors and Municipalities has made many useful suggestions as to how the national government may assist in the solution of these problems.
It has suggested a municipal development bank, and here I shall quote from the federation's bulletin of December, 1961:
The primary tool of the new federal-provincial-municipal partnership in mobilizing capital would be a municipal development bank. In a special section of the brief, the federation states its case for such a bank in terms of both national and municipal needs which are summarized in the statement that the bank would be "a missing link
(1)	in upgrading municipal capital requirements to the equal status which they deserve with those of the federal and provincial governments;
(2)	in facilitating-for the purpose of assuring economic growth and stability-the constant review of the nation's need for capital expenditure; and
(3)	in implementing, to the advantage of the entire national economy, the policy of drawing to the utmost upon Canadian savings for our capital investment."
The importance of that proposal is this; in order to participate in the winter works program the municipalities have to borrow, and I suppose all hon. members know that the largest part of a winter works program is paid by the participating municipalities. In order to borrow they have to compete with the federal and provincial governments in the money markets. This means that they have to borrow at high interest rates, which show up in property taxes. They are in the same position as the person who cannot afford to take advantage of bargain prices.
The principle of integrated or co-operative borrowing has been accepted by the government in the national housing authority sewer legislation, and we ask that this principle be extended to other local works.
The federation has also suggested that the section of the National Housing Act which governs rural redevelopment, section 23, be amended to include non-residential properties. The federation recognizes, and my own experience confirms, that there are many depressed commercial areas in need of aid. When an area is seriously blighted it is necessary to look at the whole area, and not just the residential part of it. The need for redevelopment is obvious in many cities, and may I observe since coming down here a month ago that there is a great need for redevelopment in Ottawa and Hull.
There are many ways by which the federal government could provide employment and assist municipal governments to create good urban living areas. At this time I shall not

go into much detail, but for those hon. members who wish to be better informed on the subject I would refer them to the annual briefs of the Canadian Federation of Mayors and Municipalities presented to the cabinet, and to a booklet entitled "There is work for Canadians in the improvement of our cities and towns."
I would add that this is all very productive work. The Minister of Finance seemed to suggest the other night that many types of public work projects were not productive. I do not believe that public works spending is the entire answer to all our economic problems, but it has a very definite place in any planning program to create economic growth. However I fear that a government bent on balancing the budget will not implement these useful and sensible proposals.
Perhaps the treasury benches should be reminded of President Kennedy's words to congress when he said "A stronger nation and economy requires more than a balanced budget. They require progress in those programs that spur our growth and fortify our strength." He went on to say "A strong America depends on its cities." I would paraphrase that and say a strong Canada depends on healthy cities. I look forward to the day when the cities of Canada, the places where over 85 per cent of the population live, will receive more federal assistance in creating healthy and pleasant environments for an expanding population.


Mr. Byrne:: Mr. Chairman, the hon. member for Villeneuve gave us a very interesting presentation this evening, and in it he chose to say that you do not have to understand Social Credit in order to vote for it. In effect he said "Follow us blindly and there is every hope of a great economic future." I understand the hon. member is an automobile salesman and he certainly believes in the horseless carriage era, but I am sure that if there were something wrong with the automobile I was driving I would take it to his mechanic rather than to the dealer himself.
This afternoon the hon. member for Calgary South treated us to an interesting survey of the development of the oil and gas industry in Western Canada. Upon reflection I am sure he will admit that much of its development has been due to the great and vast pipe line projects that were undertaken during the Liberal administration. These included West-coast Transmission, Trans Mountain, Trans-Canada and the pipe line which terminated at Duluth and which was carried on later, I believe, to Sarnia. These were all developments under the former Liberal administration.
Ways and Means
I was very interested to listen this evening to the hon. member for Peace River, who pointed out the developments in that area due to the building of the railroad to Pine Point. Of course, this is something which had been projected for some time, and it was only when the Consolidated Mining and Smelting Company were prepared to go ahead and develop a vast lead and zinc project at Pine Point it became practicable to build the railway, and I give the administration full marks for having carried out that plan. After all, in the five years they have been in power we are surely entitled to expect some measure of development.
With respect to the Pine Point project and the Consolidated Mining and Smelting Company development I believe the hon. member estimated that the expenditures would be in the neighbourhood of some $28 million, having regard to the developments at Trail and at Pine Point itself. The national energy board, is at the present time reviewing the application of the Consolidated Mining and Smelting Company for a power interconnection with the Bonneville Power Corporation. If this project is agreed to by the national energy board, it will mean a projected development in the city of Kimberley alone of some $85 million.
Mr. Chairman, with the short time at my disposal, obviously I cannot get through the major part of my address. I hope this debate continues, but in the meantime I believe, because of the urgency of the situation with respect to the unemployment insurance fund, I should bring this matter to the attention of the administration, if it has not already been done so a sufficient number of times. According to the advisory council of the unemployment insurance commission, we are facing a complete bankruptcy of the fund. I have from time to time asked the Minister of Labour what he proposes to do about it, but of course he does not appear to worry. It is approaching winter very rapidly, but we are told that some time this fall we are going to have the report of the Gill committee, which I believe was set up some time last year. This report of the advisory committee of the unemployment insurance commission is a document of despair. In at least three places in this document there is the plea that the government should do something to strengthen the fund. The committee points out that at the end of May, 1962 there was only $20 million in the fund, and that by September it would probably reach a maximum of $70 million. If that were so it would be necessary, in order to make the fund solvent for

Ways and Means
the full year to provide approximately another $74 million; that is, as a direct grant from the government. But, of course, they recommend against grants, except on occasion to bring the fund into solvency immediately. The actual figures for the build-up throughout the summer amount to some $75 million, where something in the neighbourhood of $70 million was projected.
So that we are in this unhappy position in respect of an insurance fund which some five years ago stood at close to $1 billion- $928 million, if my memory serves me correctly. Throughout the five years of Conservative administration, while they have not done nothing-they have increased the rates, and I believe they also took into the fund those of a higher income category-this Conservative administration has taken no action to revise the whole program so that the fund would become solvent again. They have said throughout these years that there has been full employment, that there has been no real unemployment situation; yet throughout these same five years the fund has been depleted.
Somewhere along the line somebody is not being truthful. If the fund was solvent in 1956 and we had full employment, or near full employment at that time, and this has continued, why has the fund depreciated by almost $1 billion?


Rémi Paul: Order. It being ten o'clock shall I rise, report progress, and ask leave to sit again at the next sitting of the house?


Some hon. Members:: Agreed.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business will be for tomorrow, and will the house leader indicate what we will be doing next week?


Gordon Minto Churchill: Tomorrow will be legislation, Mr. Speaker. First the resolution in the name of the Minister of Agriculture dealing with the Farm Credit Act, item No. 27 on today's order paper. The second item will be Bill No. C-3, to amend the Food and Drugs Act, which is item No. 2 on today's order paper. And if we have time, the third item will be Bill No. C-4, to amend the Department of National Health and Welfare Act, No. 3 on today's order paper.
On Monday we will continue in ways and means committee; and if the opposition parties wish to conclude the general debate, then we would start in with the resolutions.


[Stage Direction]
It being two minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
955.
[Stage Direction]
Friday, Ociober 26, 1962