1962-10-16

[Stage Direction]
Right Hon. J. G. Diefenbalcer (Prime
Minister): Mr. Speaker, I sent a message to the President of the United States following the enactment of the trade expansion act, and instead of summarizing I think it would be appropriate if I were to read that message, containing as it does the views of the Canadian government in connection with the momentous step taken in the passage of that legislation. The message reads:
Dear Mr. President:
With the enactment of the trade expansion act I wish to let you know that the Canadian government welcomes this important development in United States trade policy which holds out promise for significant progress in the expansion of world trade on a multilateral basis. This is indeed an historic accomplishment.
At the commonwealth prime ministers' conference in London last month I proposed that all like-minded nations should meet at an early date to consider how the great problems of trade facing us today can be dealt with to the mutual advantage of all. I would like to follow up this general proposal with a specific suggestion for an early meeting on these matters. It is vitally important that we find effective ways as soon as possible for dealing with these complex and urgent trade problems. It appears that the most convenient way of arranging such a meeting would be to discuss these broad trade questions at a meeting of ministers.
The Canadian government looks forward to participating fully in these efforts and to working with the United States and other nations to achieve the objectives which we hold in common. It is our conviction that the opportunities now opened up for wider co-operation in trade and economic relations will make a major contribution to the further strengthening of the free world.
Trade relations between Canada and the United States are characterized by mutual understanding and a constructive approach to our common objective of freer, non-discriminatory trade. These new efforts to expand world trade will provide continuing opportunities for our two countries to work closely together each in a full understanding of the other's interests and aspirations.
Hon. L. B. Pearson (Leader of the
Opposition): Mr. Speaker, the house will have listened with great interest to the statement of the Prime Minister in regard to the trade expansion program of the government of the United States, which has received the approval of congress. Mr. Speaker, we on this side have supported this proposal, in so far
as any persons outside the United States can support a program of this kind, since it was first introduced by the President as one of far reaching importance, both constructive and imaginative in its scope. It is indeed, as the Prime Minister has said, an historic accomplishment on the part of the administration of the United States. It is important for Canada and other countries to associate themselves with this kind of initiative so as to make sure that the step taken in Washington can be followed-indeed, preceded if possible -by steps taken in other free world capitals so that obstacles to trade can be removed in all free countries.
For that purpose, we have felt that the best move which Canada can make at this time is not to call a general conference of the kind indicated by the Prime Minister, which among other things would overlap a proposal made at the United Nations for that purpose, but to associate ourselves with the United States, the United Kingdom, and the economic community in Europe to reduce barriers and to extend the reduction of those barriers under the most favoured nation clause to all free countries.
Mr. Speaker, steps to this end can be taken through the machinery which is now available. It was interesting to note that at the Seigniory club yesterday the United States assistant secretary of state for economic affairs indicated that he felt the Canadian government could make a substantial contribution to freer trade by joining with the United States and other countries in working out a basis for negotiations on tariff reductions expected to begin before long. As he put it, Canada and the United States should be prepared to make short run adjustments for the sake of long term benefits.
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, it is interesting to note, I think, that we who sit on the benches opposite the government have some measure of agreement on this particular statement which has just been made. However, we are convinced that the only way in which the freest possible exchange of goods among the nations of the world can be accomplished is by the lowering of tariff barriers. While we are also agreed that a world trade conference is of urgent importance, yet let us also remind ourselves- and I trust that the government is doing likewise-that we must start some place and do so soon. In this regard I think that the

Statement on U.S. Trade Expansion best instrument we have and likewise the best instrument which our neighbour to the south has is to be found in the relationship that must continue to develop between our two countries.
Again I come back to this factor, namely that one of the soundest bases for the beginning of what we understand to be a freer exchange of goods through the lowering of customs barriers, could well start within the commonwealth. After all, it must start some place. It is therefore our opinion that first with our neighbour to the south but immediately also within the realm of the commonwealth we must take action that will bring results in the immediate future. Unless we can free the restrictions that today limit the exchange of goods among friendly nations, we will not be able to meet the financial crisis we are in.
We are pleased that this step has been taken. However, again let us be practical in understanding that we must start some place and do so very soon.


Mr. Reid Scolt (Danforlh):: Speaking for the New Democratic party, Mr. Speaker, may I say that we should like to associate ourselves with the words of the Prime Minister in welcoming the passage of the United States trade expansion act. As all hon. members know, this act is one of the most imaginative and far reaching to appear on the world scene for many years. It holds out the hope to all the free nations involved in it for a gradual lowering of trade barriers. It is the one weapon which may effectively be able to facilitate British entry into the European economic community and bring down the external tariff wall. It will also in all likelihood provide greatly renewed vigour and impetus for the coming trade negotiations under GATT in late 1963 and early 1964.
We hope the Canadian government will do everything in its power to bring our country under the provisions of the trade expansion act which deal with the 80 per cent figure, and will permit us to obtain free access to the United States and European markets. As I say, it is an imaginative and bold step. We in this party welcome it and urge the government to co-operate in every way.



FINANCE


Hon. George C. Nowlan (Minister of Finance):: Mr. Speaker, I should like to inform the house that it is my intention to table in this house on Thursday afternoon the revised estimates for the current fiscal year.



STATEMENT BY MR. SPEAKER WITH REGARD TO QUESTIONS ON ORDERS OF THE DAY

['Agreed.']
Mr. Speaker:: Before calling the orders of the day I would crave the indulgence of hon. members in order to permit me to make a statement which I indicated on Friday last I would make today, namely a statement of what I consider to be the guideposts on the subject of questions generally and on oral questions on orders of the day in particular.
I would immediately point out that this is in no way a ruling but rather a statement.
I find that over the past 20 years or more each of my predecessors as Speaker has taken this step I am now taking at least once, and some of them a number of times, during his term of office.
The problem of oral questions on orders of the day is not a new one and hon. members will see some of the reasons why as we examine the problem. As there are a number of hon. members who were members of this house in 1940 perhaps I could quote from some observations by the then prime minister, Mr. Mackenzie King, as they appear in Hansard for July 12, 1940, commencing at page 1569:
It is not, as I understand the rules, the right of hon. members to interrogate the ministry upon all kinds of matters without advance notice and without following, wherever possible, the other rules that are laid down for the seeking and obtaining of information. The rules of the house do provide several means whereby information may be obtained, and of course the rule most generally availed of is the one with respect to handing questions in to the clerk, or having placed on the order paper notices of motions for the production of papers. By our rules the asking of questions of the ministry on the orders of the day is limited to a certain class of questions, those which cannot be answered effectively in the other way.
He further indicated he felt the Speaker of the day should make a statement in this regard. Mr. Speaker Glen on July 15, 1940, as reported on page 1596 of Hansard, went into the question at some length and, after reading standing order 44, comparable to our standing order 39 of today, had this to say:
If the standing order was strictly interpreted, it is obvious that a very large proportion of the oral questions asked before orders of the day are called would be out of order. In fact, members have not exercised sufficiently their rights under standing order 44, but have too frequently endeavoured to seek information on the orders of the day being called.
He went on further to say, on pages 1596 and 1597:
To sum up: There is only one standing order governing questions seeking information from ministers of the crown. It is standing order 44, which provides that such questions may be marked with an asterisk if oral answers are required. Forty-eight hours' notice must be given of these questions, which must be laid on the table of the house before six o'clock

and printed in the Votes and Proceedings. On the orders of the day being called, members may ask ministers to explain certain matters in accordance with the practice expounded by Bourinot and sanctioned by usage. It is not done under the authority of a standing order, and therefore such questions may be either permitted or disallowed by the Speaker, who must judge each case on its merits.
And further:
... It seems to me manifestly unfair to compel ministers to answer questions on important matters without an opportunity of consulting their chief officers; and it would be arbitrary to deprive private members of the privilege of putting certain questions of immediate urgency on the orders of the day being called. The principle on which the practice has been tolerated in past years should be respected, that is, the reading of long series of questions elaborately prepared is not to be allowed on the orders of the day being called.
Again, on March 15, 1943, as reported at page 1234 of Hansard, Mr. Speaker Glen had this to say:
As long as our standing orders are unchanged, the only questions permitted on the orders of the day being called must be confined to very urgent matters, personal explanations, inaccurate reports of speeches delivered in the house, denial of charges, dilatoriness in obtaining returns, or other similar matters closely connected with the routine business of the house. These questions must be brief and must not be prefaced by any argument. Standing order 44 gives members ample opportunity to place on the order paper any number of questions they desire with respect to public affairs. Reading telegrams, letters or extracts from newspapers as an opening to a question when the orders of the day are called is an abuse of the rules of the house. It is not good parliamentary practice to communicate written allegations to the house and then to ask ministers either to confirm or to deny them. It is the member's duty to ascertain the truth of any statement before he brings it to the attention of parliament. This has been decided long ago in the United Kingdom House of Commons. On June 14, 1882, Mr. Speaker Brand, in preventing a member from reading a telegram from a newspaper and founding a question on it, pointed out the extreme inconvenience of founding questions on every telegram in every newspaper. "I am bound to say," he added, ''that it does appear to me that before questions of such gravity are put, an hon. member should take some measures to ascertain the truth of the telegram." This quotation is from Denison's and Brand's Decisions, page 230.
Mr. Speaker Glen concluded as follows:
I feel it is my duty to explain to the house the procedure with regard to questions, and I hope that in applying it I shall have the co-operation of all members of the house.
On September 11, 1945, page 66 of Hansard, Mr. Speaker Fauteux had this to say briefly after citing Beauchesne's third edition:
Hon. members will notice that the rules say that questions are allowed by courtesy in connection with the business of the house, or with very urgent and important matters of public concern. I would like to call for the co-operation of every member and ask them not to put oral questions when they are not very urgent. It would be preferable for the dispatch of business that questions be placed on the order paper.
Coming to more recent years, on May 29, 1951, as reported in Hansard, page 3494, Mr. Statement by Mr. Speaker Speaker Macdonald referred to the procedure regarding the asking of questions, and he referred hon. members to standing order 44 I quote:
It has nevertheless been the practice in our house to allow a certain number of oral questions, and it is not my purpose to discourage members from asking questions of the proper type, as I feel that these questions create a more lively interest in the business of the house. These oral questions are asked when the orders of the day are called, and are frequently asked without notice. I would, however, emphasize that these oral questions should be asked only in connection with very urgent and important matters of public concern, and only if it would not be in the public interest to place them on the order paper and receive answers in accordance with the method provided for in the standing orders. They should always be brief. No debate is permitted, and the reply should be as concise as possible. The questions should not be prefaced by the reading of letters, telegrams, newspaper extracts or preambles of any kind. See Beauchesne's third edition, paragraphs 297, 298.
On March 16, 1956, Mr. Speaker Beaudoin, as reported on page 2206 to 2210' of Hansard and the Journals of the House of Commons, volume C. at pages 299 and those following went into the whole question most exhaustively. He reviewed the statements of the previous Speakers, including some of those which I have given to hon. members, and then cited from other sources of authority such as Beauchesne, Bourinot and May as well as articles published by the Hansard Society. Without appearing at all to lecture hon. members in a pedagogic way, I would suggest that this particular statement by Mr. Speaker Beaudoin might be made prescribed reading for members, as well as others who would comment upon the proceedings of this house.
The statement came relatively shortly after standing orders had been changed and adopted by the house in 1955, following many years of study. There are many hon. members on both sides of this house who were members of the House of Commons in 1955 and who participated in the revision of the standing orders and, with the adoption of the standing orders, I may presume that they concurred therein.
I am resisting a grave temptation to quote most extensively from this lengthy statement, and I trust that hon. members will bear with me while I make certain references to it. In some respects the situation today may resemble that which prevailed some six years ago:
I want to tell hon. members that I think that between their conception of what should be asked at question time and mine there is now such a wide difference that I am afraid we are not pulling in the same direction. I think it is well for me to establish the position which I consider is the one which is now in force. I will not quote all these citations but I will refer hon. members to the following ones-

Statement by Mr. Speaker
Then he enumerates a number from Beau-chesne. He refers members to Bourinot's fourth edition and goes on and cites particularly citation 140 in Beauchesne's third edition, which is as follows:
A question which could be inserted on the order paper is not allowed on the orders of the day being called.
Incidentally, citation 140 is now 173, subparagraph 2:
Then citation 297:
297. A certain number of oral questions are permitted in practice by members, without notice, before the orders of the day are called; but these are merely allowed by courtesy in connection with the business of the house or with very urgent and important matters of public concern. They are always brief, no debate being permitted, and the replies are as concise as possible. The minister interrogated may reply at once or may direct that the usual notice be given. Such questions are governed by the same rules of order as questions of which notice has been given.
Then Mr. Speaker Beaudoin comments:
In other words, if a question could not be inserted on the order paper, a member cannot ask it before the orders of the day are called.
There follows some detailed discussion and interpretation of various citations in Beau-chesne, which I do not think it is necessary to deal with at this time, but in case this statement should be misunderstood in regard to citation 203 of the third edition of Beauchesne, which is now citation 178 of the fourth edition, it must be noted that Mr. Speaker Beaudoin subsequently corrected himself on May 7, 1956 as reported in volume 4 of Hansard at pages 3619 and 3620. Mr. Speaker Beaudoin then continued, at the foot of page 2207 of Hansard:
I hope that hon. members will read carefully all the citations I have given and I feel confident that they will do so knowing their interest in the matter. They will see that not only has it been the opinion of prime ministers but also of leaders of the opposition when they have occupied one side or the other during their careers, that questions before the orders of the day are called should be limited to questions of an urgent and important character and should be asked on the orders of the day only if they could not be placed on the order paper without some prejudice being suffered.
I said earlier that hon. members are moving in a direction which is contrary to that which I understand to be the right one because as hon. members know the rules are not being changed by the Speaker. If hon. members wish that the rules be changed there is a proper method to be adopted and that is to have a committee on rules, have the matter decided and have a report made to the house. Were I to receive such a report I can assure you that I would try to interpret the new rules as faithfully as I could. As it is, hon. members are trying to move in the direction of having a question period which is almost similar to that which exists in the United Kingdom without adopting the proper safeguards and without giving more authority to the Speaker to intervene whenever he feels that a question is not in order and also without adopting the method of giving notice which is in vogue in the United Kingdom.

He then went on to compare the practice which prevails in the United Kingdom, which is quite instructive. I cannot resist reference to a citation made by Mr. Speaker Beaudoin from a commentary on "Question time in Canada" appearing in an article of the Hansard Society, where the author has this to say:
In Canada, the complexity of the question procedure and its lack of definitiveness usually results in an annual altercation on the floor of the house.
I think hon. members who have been here for some time may be witness to that. Then he says:
Habitually, Mr. Speaker makes a short statement-
And, as Mr. Speaker Beaudoin does, I apologize for making mine quite so long:
-during the early stages of the parliamentary session to remind the members of the differences between the two procedures to be outlined below. The Speaker tries to discourage the use of too many questions being asked "on the orders of the day being called''.
Even closer to the present day, with respect I would refer to two statements made by my immediate predecessor, Mr. Speaker Michener, on October 17, 1957, at page 63 of Hansard, where the then Speaker referred hon. members directly to the lengthy statement by his immediate predecessor, Mr. Speaker Beaudoin, and it is my opinion that Mr. Speaker Michener adopted the words of Mr. Speaker Beaudoin.
Again on February 26, 1959 at page 1393 of Hansard, Mr. Speaker Michener on an occasion similar to this, prior to calling orders of the day, made a statement as to the interpretation of the practice of this house on oral questions for the edification of hon. members; and without wishing to enter into debate with anyone within or without this house who may feel that I am endeavouring to introduce changes in the rules or interpretations of the rules concerning oral questions, may I quote the principles applicable to oral questions as enumerated briefly by Mr. Speaker Michener.
1.	The question should seek information or press for action on a matter relating to public affairs of such immediate urgency that it would be inappropriate to put it on the order paper.
2.	Both the question and the answer should be concise, factual and free of opinion and argument or observations which might lead to debate.
3.	An explanation can be sought regarding the intention of the government but not an explanation of opinion upon matters of policy. That is citation 178 of Beauchesne's fourth edition.
4.	Other detailed limitations, some 40 in number, are set out in citation 171 of Beauchesne's fourth edition ... and apply to oral questions as well as to written questions.
5.	Supplementary questions are matters of grace.
6.	The minister is entitled to notice, and answers cannot be insisted on nor is it regular to comment on the refusal to answer an oral question.

I may say this principle relates to oral questions and perhaps not to questions on the order paper.
I apologize to hon. members for the length of this statement which, if I had yielded to temptation, could have been much longer; but I felt it was necessary to trace an historical pattern to events which have taken place within the actual memory of a goodly number of hon. members in this house. Unfortunately human memory may sometimes fail or impressions may get blurred of events even not too distant in the past, but the Journals of this house and the records of debates indicate faithfully what was actually said. I leave it to hon. members to judge my submission that there is an easily discernible line of interpretation over the years, but one must refresh one's memory from time to time to clearly set out and see that line of interpretation.
I do not propose to enter into a lengthy philosophical dissertation on the role of the Speaker, his duties having been described much better by others on many occasions. I would subscribe wholeheartedly to those definitions. I believe the Speaker should be the impartial arbiter of the rules as they exist for him and for the house in the standing orders, in the decisions of his predecessors and in the decisions of this house, aided by the persuasive authority of the commentaries such as Beauchesne, Bourinot, May and others. The Speaker is the servant of the house in so far as it makes rules for the conduct of its affairs, and I conceive it would be a grave dereliction of duty for the Speaker to put these rules aside consciously in response to either whim or expediency.
But if the rules exist for the Speaker to interpret, they also exist for hon. members to observe. It is not the sole duty of the Speaker to preserve order, or the traditions and dignity of this house, or to protect members from unconscionable actions. I would submit that there is an equal duty on all members to do likewise. May I translate ourselves into another medium which may be more graphic. The rule book does not exist only for the hockey referee or the football referee or the umpire in baseball, nor are these officials the only ones who should know the book of rules; the players themselves, if they are going to do their jobs properly, must not only know the rules well but must observe them.
I do not conceive the role of Speaker to be that of a police constable on a beat in a more notorious section of a large metropolitan city, whose principal task is to be on constant alert against wrongdoings and where the conduct of most of the residents may be suspect. Nor do I conceive it to be that of a mere teller of names, a sort of gatekeeper for hon. members
Statement by Mr. Speaker who may wish to ask questions or engage in debate governed by the rules of this house to the extent only that the whim or the expediency of the moment may dictate. I recognize that these are extreme positions.
As I have indicated previously, and as has been indicated by previous Speakers, I have my rules as embodied in standing orders, decisions of this house, decisions of previous Speakers and the persuasive authority of the commentaries. Hon. members expect me to enforce these rules; yet, as was said by Mr. Speaker Beaudoin, "It would appear that hon. members are pulling in the direction of the practice which exists in the United Kingdom under different rules." If the present rules do not satisfy the hon. members of this house, then I have no objection if they wish to go in different directions, but I cannot agree that I can go along with them while following the rules which are given to me. If the rules should be changed, then I respectfully suggest that hon. members know what procedure to take under the rules as they now exist.
May I add that many of the questions being posed on orders of the day would be unacceptable as to form for printing on the notice paper. In a large percentage of such cases members would be requested to rephrase or redraft their notices before they could be accepted under the terms of standing order 39, section 1.
In conclusion, briefly stated, it would appear that it has been the consensus of all Speakers that questions asked on orders of the day should comply with two basic requirements:
1.	The form of those questions is governed by the terms of standing order 39 section 1, which provides in part that in putting a question no argument or opinion is to be offered nor any facts stated except so far as might be necessary to explain the question.
2.	Such questions should be offered only in connection with urgent and important matters of public concern when, because of immediacy, the regular procedure relating to questions cannot be utilized for the purpose of eliciting the desired information or for bringing a matter of urgency to the attention of the ministry.
The terms of section 1 of standing order 39 are comparatively clear, and if the Chair could depend on co-operation from all sides of the house not only as to the nature of questions but also as to the nature of replies, there would be little trouble, in my humble opinion, in controlling questions on orders of the day.
I respectfully submit this statement for the consideration of hon. members.

Inquiries of the Ministry FINANCE



[Stage Direction]
On the orders of the day:
Mr. Heward Graffley (Parliamentary Secretary to the Minister of Finance):: On a question of privilege, may I say that yesterday in relation to question No. 38 asked by the hon. member for Davenport the document referred to in part 2 of the question was not included with the answer. In order that the record may be put straight I should like to table today the document then referred to.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.



ROYAL COMMISSION


[Stage Direction]
On the orders of the day:
Robert Norman Thompson: Mr. Speaker, I should like to address a question to the Prime Minister. In view of a recent announcement by the royal commission on banking and finance that evidence laid before the commission by former Bank of Canada governors Graham Towers and James Coyne will be heard in camera, and in view of the extreme importance of this evidence, will the government ensure that members of the house committee on banking and commerce, or alternatively representatives of all political parties, are permitted to see this evidence?


Mr. Speaker:: Order. The other day I had to deal with a question which dealt in part with information which had been advanced by the hon. member, and I think the question in effect asked the Prime Minister to comment on, or to confirm, rumours of one sort or another. I think in the way it has been presented to the house it is quite improper at the moment. It could be redrafted if the hon. member will think about it.


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, may I ask the Prime Minister whether he proposes to set up, or proposes to take steps to set up shortly, the banking and commerce committee of the House of Commons so that evidence of this kind could be heard before that committee?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, as the hon. member knows all standing committees are in the process of being considered at the moment.


Hon. J. W. Pickersgill (Bonavista-Twillin-gate):: Mr. Speaker, I wonder if I could ask the Prime Minister whether he could ascer-

tain from the chairman of the royal commission on banking if it is the intention of the commission to hear some witnesses in camera, and inform the house?


John George Diefenbaker: Mr. Speaker, my answer would be in the affirmative.



RECONSTRUCTION AND DEVELOPMENT BANK


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, I wish to direct a question to the Minister of Finance. My question is based on a newspaper report that a Mr. George D. Woods-


Some hon. Members:: Order.


David Lewis: Mr. Speaker, I remember what you said, but my question will have no meaning unless I preface it in this way.


Mr. Speaker:: I was not calling the hon. member to order; I was cautioning other hon. members to let the hon. member proceed so that I could hear whether he is going to state a few succinct facts on which to found his question.


David Lewis: Mr. Speaker, I am sure you will be satisfied that that is so. My question is based on a newspaper report that a Mr. George D. Woods, chairman of First Boston Corporation, a leading Wall street investment concern, has been picked by the President of the United States and his advisers as president of the international bank for reconstruction and development to succeed Mr. Black.
My question to the Minister of Finance is, would the minister inform the house under what authority the government of one country purports to pick the president of the world bank, and what instructions have been given to, or are contemplated for, Canada's executive director of the bank on this matter?


George Clyde Nowlan: Mr. Speaker, I am sure that neither the President of the United States nor this government is responsible for rumours, very often erroneous, which appear in newspapers.



THE BUDGET


[Stage Direction]
On the orders of the day:
Mr. Walter L. Gordon (Davenport):: I should like to address a question to the Minister of Finance. I have given the minister notice of this question, but in view of Your Honour's statement I propose to delete certain introductory phrases. My question is this. Will the minister say whether the revised budget for the coming fiscal year 1962-63, incorporating the government's program for dealing with

the country's long term financial and economic problems, will be presented before the Christmas recess?


George Clyde Nowlan: I am sorry, in a way, that the hon. gentleman has withdrawn those preliminary remarks, because I could perhaps make a much more effective answer with respect to them than I can in relation to the question itself. I made a statement yesterday that a budget will be brought down at an earlier date than usual. Further than that I do not propose to go at the moment.


John Whitney Pickersgill: For what fiscal year?


Walter Lockhart Gordon: A supplementary question. The Minister of Finance told us yesterday that a budget for 1963-64-


Some hon. Members:: Order.


Walter Lockhart Gordon: -the year most hon. members assumed he was talking about, would be introduced after Christmas. I am asking now about the revised budget for the current fiscal year.


Mr. Speaker:: That is not really a supplementary question.



INQUIRY AS TO INTRODUCTION OF SUPPLEMENTARY BUDGET

[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Trinity):: Mr. Speaker, I should like to address a question to the Minister of Finance. Is it the intention of the minister to introduce a supplementary budget for the fiscal year 1962-63 as forecast in the speech from the throne?


George Clyde Nowlan: Whatever may have been forecast in the speech from the throne, Mr. Speaker, will be carried out.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to address a thoroughly pruned question to the Prime Minister. In view of the situation in Cuba and Berlin, would the Prime Minister assure the house that the government will lose no opportunity to urge on all the powers concerned that they begin negotiating their difficulties immediately at the United Nations?


John George Diefenbaker: I will say that there appears to be no justification for the hon. gentleman to associate or link together the questions of Cuba and Berlin.
Inquiries of the Ministry
In so far as Berlin is concerned, western policy has not changed in spite of the fact that there have been some indications that the Soviet union may shortly precipitate a new, if not a grave, crisis in that city. The basic essentials of western policy are the maintenance of allied rights on access, the continuing presence of western troops and the freedom of the people of western Berlin. Canada fully supports the western powers in their desire to negotiate on this important matter, and will also co-operate in any compromise on less essential points. The effective reply to that portion of the question is simply this; the answer rests with Mr. Khrushchev.
As far as Cuba is concerned, the hon. member will be aware that the Cuban government has brought this question to the attention of the United Nations on several occasions. Canada, together with the other members of the world body, thus has an opportunity to ensure that all possible steps are taken to arrive at a peaceful solution. The Canadian government will not fail to do everything within its power to achieve this objective.


NUCLEAR TESTINC
[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs. In view of the unsuccessful attempt yesterday by the United States authorities to launch a nuclear weapon in the Pacific and the announced intention of the Soviet union to proceed with further nuclear tests, has the minister on behalf of Canada made protests against these evil and imbecile actions on the part of the U.S.A. and the U.S.S.R?


Mr. Speaker:: Order. I think the hon. member, if he kept in mind the statement I made recently, particularly regarding standing order 39 (1), should exclude from his question certain words such as those of opinion which he has expressed; but for the rest of it, I think the minister might be prepared to answer.


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, in my speech at the United Nations on September 25 I dealt quite fully with this question of further nuclear tests. Then again last week General Burns, who is our main adviser on disarmament, dealt with the same subject in the first committee of the United Nations. Canada's position has been made abundantly clear, and no effort will be spared to see that we do our Dart to bring an end to these tests, which I quite agree are disastrous for humanity.

Inquiries of the Ministry
TRADE	(Text):


INQUIRY AS TO CANADIAN
[Stage Direction]
On the orders of the day:
Mr. D. S. Macdonald (Rosedale):: I wish to address a question to the Prime Minister arising out of the statement he made to the house at the commencement of this afternoon's sitting. In view of the fact that the twentieth session of the contracting parties to the general agreement on tariffs and trade will begin next Tuesday, will Canada be represented at such meetings by a minister of the crown, and will the ministerial discussions referred to by the Prime Minister in his statement be held in conjunction with the GATT meetings?
Right Hon. J. G. Diefenbaker (Prime
Minister): I will answer simply in this way. Canada will be represented.
(Translation):


WORLD FAIR
[Stage Direction]
On the orders of the day:
Mr. Gerard Loiselle (St. Ann):: Mr. Speaker, may I direct a question to the Associate Minister of National Defence? Can he tell the house if a decision was reached about choosing Point St. Charles ward in Montreal as the official site for the world's fair?


Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, as yet no decision has been made concerning the site for the world's fair in 1967.


CONTRACT FOR SALE OF WHEAT TO CHINA
[Stage Direction]
On the orders of the day:
Mr. J. P. Cook (Monimagny-LTslel):: Mr. Speaker, I would like to put a question to the Prime Minister. Can he tell us when he intends to reveal to the members of this house the wording of the contract passed between the Canadian government and red China on the sale of wheat to the latter?


Mr. Speaker:: Order. I wish to point out to the hon. member that such a question had better be put on the order paper.


Jean-Paul Cook: On a point of order, Mr. Speaker. Since last Friday we have seen discussing the bill relative to our export trade and the sale of wheat. Therefore, I feel my question should interest all members of this house.


Mr. Speaker:: The remarks I made on the question put by the hon. member also apply in this case.


EUROPEAN COMMON MARKET
[Stage Direction]
On the orders of the day:
Mr. J. H. Addison (York Norih):: Mr. Speaker, I should like to direct a question to the Prime Minister. The hon. member for Halifax, Mr. Edmund Morris, is reported by the Canadian Press today as having told the economic conference in Fredericton that he has no doubt that the United Kingdom is going into the common market. My question is, sir, is this to be taken as the position of the Canadian government?


Mr. Speaker:: Order. I think the hon. member will find that it is quite improper to ask a minister to comment on the statements of an hon. member of this house for whom the minister is not responsible in an administrative capacity.
(Translation):


SHIPPING
[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I want to ask the Minister of Transport a question. Can the minister tell us whether he has already launched a general survey on all matters concerning piloting, as he announced in the House of Commons about six months ago?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, I shall probably make a statement on this matter before the end of the week or at the beginning of next week.


Lionel Chevrier: Mr. Speaker, may I ask a supplementary question? Has the minister submitted to the government a series of suggestions to be studied as he had promised at the time?


Léon Balcer: Mr. Speaker, I did exactly what I promised to do at the time, and, as I said a moment ago, I shall make a statement to the house as soon as the commissioners are appointed.


Lionel Chevrier: This matter is already six months old.
(Text):



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the Prime Minister whether it is still the intention of the

government to set up a special committee on procedure. If so, will it be established at the same time that the other committees are being set up for this session?


John George Diefenbaker: Mr. Speaker, that is, of course, a matter for the house to determine. On any question dealing with procedure one must have the co-operation of hon. members in all parts of the house. When and if there is a general request to have the committee set up, I am sure it will be. In the past it has done worth while work in producing rules, which have not always been adhered to.


Mr. Martin (Essex East):: Particularly by hon. gentlemen opposite.


Stanley Howard Knowles: A supplementary question. May I ask the Prime Minister whether he does not remember that this was prophesied in the speech from the throne?


John George Diefenbaker: Mr. Speaker, there are several things prophesied in the speech from the throne which will ultimately culminate in action when the house arrives at a consideration thereof.



REFERENCE TO COMMITTEE OF CANADA COUNCIL REPORT

[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: I should like to ask the Prime Minister whether it is the intention this session, as in the last three sessions, to have the report of the Canada Council brought before a house committee.


John George Diefenbaker: Yes, Mr. Speaker.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: I should like to direct a question to the Minister of National Defence. Did the minister talk yesterday with General Gerhart, the commander in chief of NORAD; and, if so, has any decision been taken in respect of the arming of Canadian Bomarc squadrons?


Hon. D. S. Harkness (Minister of National Defence):: Mr. Speaker, I did indeed talk
yesterday with General Gerhart, but we did not discuss the Bomarc squadrons.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, on October 3 and again on October 11 I
Inquiries of the Ministry directed a question to the Minister of Transport regarding the imminent discontinuance of trains Nos. 195 and 196 between Prince Rupert and Prince George and also with respect to the proposals relating to trains Nos. 3 and 4 in the west. Without reading the question again-I am sure the minister is familiar with it-I wonder if the minister could indicate whether he has had any reply from the management of Canadian National Railways in this regard. If so, will he indicate what it is?


Léon Balcer: Mr. Speaker, I told my hon. friend that I was going to let him know as soon as I had received a report from the railway. I have received that report and have written to my hon. friend a long letter containing all the information.
(Translation):



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Bernard Dumont (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Agriculture. I read in a pamphlet on the ARDA program, about which the minister made a statement yesterday, that this program cannot be implemented before a study period of 3 years. Is this the answer to the urgent problems of agriculture in eastern Canada?


Mr. Speaker:: Order. I think that the hon. member understood what I said at the beginning of this afternoon's sitting about questions on the orders of the day. I do not think that his question is in order.
(Text):



MARITIMES


[Stage Direction]
On the orders of the day:
Mr. Malcolm Maclnnis (Cape Breton South):: Mr. Speaker, I have a question for the Minister of Agriculture. Following the additional investigation to which the minister has referred in this house during the course of the last week or so, will the minister now indicate whether he is prepared to extend the subsidy on corn moving into the maritime provinces?


Mr. Speaker:: Order. Almost daily there have been questions on this matter which I have allowed. However, I think the hon. member will now recognize the fact that the question is not of sufficient urgency for him to obtain the information on the orders of the

Inquiries of the Ministry day and that he may now get it, and perhaps in greater detail, through use of the order paper.


Malcolm MacInnis: I rise on a point of order, Mr. Speaker, with all due respect. In your previous remarks you indicated that if this question was of sufficient urgency and importance it could be brought before the house. The minister has indicated that supplies of corn are available in the maritime provinces. Nobody else seems to be able to find them. The only way I could do so would be to go and investigate every feed dealers' warehouse in the maritime provinces-


Some hon. Members:: Order.


Mr. Speaker:: The question of order is whether it is of sufficient urgency to bring it forward on the orders of the day. If the hon. member will refer to the various citations and references I gave in the statement I made, I think he will find that there has been a continuing practice in that regard.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Arthur Laing (Vancouver South):: Mr. Speaker, I wish to ask the Minister of Justice if he has yet had a request for assistance from the government of the province of British Columbia in respect of the now tragic condition of the Freedomite sect?


Hon. Donald M. Fleming (Minister of Justice):: No, Mr. Speaker, I have not received anything that I would describe as a request for assistance. The attorney general of British Columbia, of course, some time ago expressed publicly a view with regard to the dispersal of Freedomite prisoners now in Mountain View prison. However, I dealt with the matter fully, and the position of the federal government in that regard, in a statement I made a fortnight ago in the house.
(Translation):



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Guy Rouleau (Dollard):: Mr. Speaker, I would like to put a question to the Minister of Transport.
In view of the numerous complaints received from the civil, religious and school authorities in the city of St. Laurent and surrounding districts, against the noise resulting from the night landing of numerous planes at Dorval airport, I would like to ask the minis-


ter, once again, whether he could not give instructions so that-


Mr. Speaker:: Order. I do not think that the hon. member believes that his question is in order.



BAGOTVILLE, QUE.-REQUEST FOR REPORT ON ACCIDENT

[Stage Direction]
On the orders of the day:
Mr. Maurice Cote (Chicoutimi):: Mr. Speaker, I wish to direct a question to the Minister of Transport. Would the minister tell us whether he has received a report on the investigation concerning the fatal accident which took place at Bagotville airport?


Mr. Speaker:: I regret very much, but the question is out of order.



REQUEST FOR TRANSLATION OF WORK BY BEAUCHESNE

[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapoinie):: Mr. Speaker, I should like to know whether you are considering having Beauchesne's work translated into French?


Mr. Speaker:: I wish to inform the hon. member that the Speaker does not answer questions from the chair as, according to the rules, he is not to be asked questions by members of the house.
(Text):



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, earlier I posed to the Minister of Labour a question which I thought he might answer. I should like to pose it to him now inasmuch as he has had sufficient notice of it. Can the minister inform the house what was the balance in the unemployment insurance fund as of September 30?


Mr. Speaker:: Order. Notwithstanding the fact that the question may have been asked on a previous occasion and may therefore by some be assumed to be notice, I am of the opinion that the question is quite out of order as seeking statistical information. In this regard I would refer hon. members to Hansard of 1960, volume 1, in which there are no less than six instances in which Mr. Speaker Michener ruled questions out of order on

precisely these grounds. I would cite the pages without reading the rulings. They are pages 135, 261, 615 and 693 and, in a subsequent volume, pages 4031 and 5955-56. Under these circumstances, the Speaker of the day having ruled out questions precisely on the grounds of statistical information, I cannot see how this question could be in order at this time.


Frank Howard: Merely because your illustrious predecessor ruled it out, Mr. Speaker, that fact does not indicate that there is any basis for his ruling in so far as Beauchesne is concerned. I may say, with great respect, that
1	think you will find there is not any basis for it. Perhaps at this time I would defer proceeding further until we can study closely your references to Mr. Speaker Michener's rulings, and perhaps pose the question on another day.


Mr. Speaker:: I might perhaps make this observation, namely that Beauchesne is not the be-all and end-all of the rules of this house. It is an authoritative commentary. I would refer the hon. member to Beauchesne's fourth edition, citation 8, paragraphs 1 and
2	in this particular regard for consideration while he is studying the problem he has raised.
(Translation):




[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Meganiic):: Mr. Speaker, since you said earlier that we could expect to get replies to urgent questions only, I feel that the question I am on the point of asking is urgent because it deals with Canadian workers and their right to receive unemployment insurance benefits.
My question is intended for the Minister of Labour.
Could the minister tell us whether it is his intention to settle the matter of Canadian citizens working in the United States at present, but who are not entitled to unemployment insurance benefits?


Mr. Speaker:: Order. I am very sorry that the hon. member misinterpreted the point I tried to make. Not only must the question be important, but also there must be no other means to obtain the required information. To my regret, I feel that the hon. member's question is out of order.


Raymond Langlois: Mr. Speaker, do you not think that 20,000 hungry people do form the subject of an important question?


Mr. Speaker:: I am sorry, but I have already ruled on the matter.
Export Credits Insurance Act (Text):



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
The house resumed, from Monday, October 15, consideration in committee of Bill No. C-63, to amend the Export Credits Insurance Act-Mr. Hees-Mr. Chown in the chair.
On clause 3-Power to lend or guarantee, etc.
John Whitney Pickersgill: Before the clause is carried I should like to pose a question to the Minister of Trade and Commerce, if I could have his attention, and in the light of his reply to pose a second question, but the second question depends upon his reply to the first. Could I ask the minister if there has been any change in the chairmanship or presidency-I am not sure I have verified the terms-or in the two or three senior officials of the Export Credits Insurance Corporation since the present government came into office?


Mr. Hees:: The answer is no, Mr. Chairman.


John Whitney Pickersgill: Could I ask the minister if he is completely satisfied with the competence of the officials and the conscientious way in which they carry out their duties?


George Harris Hees: The answer is yes.


John Whitney Pickersgill: Then I wonder if the Minister of Trade and Commerce can explain to us what he meant when he said last night, as recorded on page 557 of Hansard:
I was most interested to hear the hon. member for Ottawa West harking back to what he would consider the good old days, the 22 years when patronage really ran rampant.
Of course this corporation has only existed 17 years, but we will pardon the minister his bad arithmetic.
From listening to him talk, you would think we were doing the kind of things that happened when they were in power, when deals were made-
The minister was speaking of this corporation.
-with specific firms that were friendly and so on That is something that does not happen any more
After an interruption the minister went on to say:
I wish to tell hon. members that it was made very clear to all Canadian producers that any terms which are made available to any one producer are available to all producers of that commodity. I know the hon. member is amazed to hear that statement, as that sort of thing never happened during the 22 years during which his party was in power. However, it happens now and it has happened under this government ever since we took over office and cleaned things up five years ago.

Export Credits Insurance Act
I have a couple of questions I want to put to the minister, and I hope he will be able to answer them instead of making another cheap political speech.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I have been reading his cheap political speech, not making one myself.


George Harris Hees: You are doing a pretty good job yourself.


John Whitney Pickersgill: I should like to ask the
minister to tell us precisely what he did to clean up this corporation that he has said was so unsatisfactory during the previous regime. I also think the minister, having made that broad statement, should give us the names of those firms that were specially favoured and are favoured no more.


George Harris Hees: Mr. Chairman, this is a very easy and very pleasant thing to do. I was not, of course, referring to the operations of the corporation. I was referring to the operations of the government as they took place under section 21. Ever since the corporation was set up in 1944 and began to operate, insurance has been issued under section 14 on all commodities where the operation which it was desired to insure was of a regular nature. However, under section 21 requests for insurance had to be referred by the corporation to the governor in council because the terms of the operation which it was desired to insure went beyond what the corporation considered to be the normal manner of carrying on its business. Therefore under section 21, both under the last government and the present one, these matters have been referred to the governor in council for consideration to see whether or not the insurance requested should be approved. Under the present government it has always been our practice to consider these matters on a businesslike basis, and any terms that we make available to any one corporation are, of course, available to any other corporation.
What I was referring to were the decisions made by the previous government in the old days, and the way they handled business generally during their 22 years in office, in that they often decided they would carry out certain transactions not necessarily on the basis of business considerations but on whether or not certain friends of theirs appealed to them from time to time and asked for special consideration. That is what I was referring to last night. In no way, of course, was I criticizing the operations of the corporation as such; rather I was criticizing the business philosophy of the late Liberal government as it operated during its 22 years of mismanagement in this country.


John Whitney Pickersgill: The hon. gentleman has made charges of a general nature against a man who was highly respected in this country and is now dead. I ask the minister to give specific examples of these things. I suggest that he either withdraw these imputations or that he produce the evidence on which he makes these airy-fairy charges. I suggest, too, that the hon. gentleman stop inflating himself to try to look like C. D. Howe.


George Harris Hees: Mr. C. D. Howe was one member of the former government for whom I always had great respect, and in anything I said about the former government I was certainly not referring to Mr. Howe.


Lester Bowles Pearson: He was the minister concerned.


George Harris Hees: As the hon. member for Bona-vista-Twillingate knows, one member of the cabinet does not decide government policy. I was referring to the operations of the government as a whole.


Robert Norman Thompson: I have listened to some of the remarks that have been made within the last few minutes, and I am more convinced than ever that we spend more time in political manoeuvring and back-talk in this house than we do in constructive debate. Let us get on with it. I believe the mark of an intelligent man is that he can, with the least words, say something constructive. According to what we hear, we are not out of the kindergarten yet. I suggest that since we have more or less agreed on the basic principles involved, we should get through with it and move on to something else.
I should like to take just one minute, Mr. Chairman, to correct a statement that was made yesterday concerning wheat exports. In checking the Bank of Canada's statistical summary for 1961, page 152, and using my addition pencil, I find that during the years 1952 through 1956 we exported $2,868 million of wheat, and wheat flour, and in the years 1957 to 1961 the figure was 2,660 million; for total grain, it is 3,665 million bushels in the first five years, and 3,051 million in the last five years. I just wanted to correct that for the sake of the record.


John Whitney Pickersgill: Since the hon. gentleman has chosen, in making a correction, to make an imputation about what other hon. members said, particularly referring to me and to the minister, since we were the only two who had spoken, I suggest to the hon. member for Red Deer that it is just as important to protect the reputation of a man who served his country well in this parliament for a

great many years, and whose reputation is attacked by his successor, as it is to make a correction in a little arithmetic.


Some hon. Members:: Order.


George Harris Hees: Just to keep the record straight,
1	should like to repeat that I was in no way attacking the late Right Hon. C. D. Howe, for whom I had great respect. I was talking of the government.


Lester Bowles Pearson: You don't know what you are talking about.


Mr. Leboe:: I should like to ask the minister two or three questions, of which I have sent him notice. How much actual money will be held by the authority, the Export Credits Insurance Corporation, in connection with the $400 million, the $300 million and the $200 million? How much interest is paid by those using this credit? What is the source of the funds used by the Export Credits Insurance Corporation, and what is the source of the funds to pay the expenses of the corporation?


George Harris Hees: The answer is that the Export Credits Insurance Corporation holds no money at all for its operations under section 14 or section 21, other than the capital which was originally prescribed and which it holds and uses for the purpose of paying claims whenever such payments are necessary.


Mr, Mcllrailh:: I want to clear up a point with which I sought to deal when the particular question was before the committee. The minister, in his remarks as reported on page 557 of Hansard, was dealing with section 21 of the act as it is being amended by clause
2	of this bill. This section comes directly under the jurisdiction of the Minister of Trade and Commerce; it is his ministerial responsibility. His remarks, therefore, are capable of one interpretation and one only, and that is that the minister, who represents the government and speaks for the government in these matters, is the one about whom he was speaking. In this case it could only mean the late Right Hon. C. D. Howe.
Furthermore, I would point out that his remarks are capable of one interpretation only in addition, that is that certain firms in this country improperly received benefit under this legislation. Now the minister, having cast that aspersion on these firms, has an obligation to explain to the committee just what firms he had in mind, who they were, and either withdraw the smear on them or substantiate it by evidence.
Before he does that I would point out that a great number of the transactions to which he referred were transactions involving sales by the Canadian wheat board. I was amazed 27507-3-37
Export Credits Insurance Act to note the applause that came from government supporters from the three prairie provinces, the wheat country, at the minister's remark presumably indicating favouritism shown to the wheat board.
I am sure the minister spoke too hastily and without thinking through his remarks. If that is the case, I do wish he would clear it up and withdraw; because I am sure, as Minister of Trade and Commerce, it is not desirable that he be in the position of having cast such a reflection on either the commercial firms in the country or the Canadian wheat board.


George Harris Hees: I am very glad to say that I cast no reflection on anyone except the late lamented Liberal government. As the hon. member knows very well, under section 21 the Minister of Trade and Commerce brings forward applications to the council and the council decides whether or not the insurance requested by the producer shall be granted. It is not the sole responsibility of the minister by any manner of means. He merely brings the request forward, and the cabinet decide that they will or will not grant the insurance being requested in that particular case. In no way at all, therefore, was I referring specifically to the late Right Hon. C. D. Howe for whom, I say a third time, I had great respect. I was in no way referring to him, but I referred to the government as a whole.
The way in which my remark came about last night was that the hon. member for Ottawa West was thinking of the way the government used to operate in the old days under the patronage system, and he said that the use of section 21 opens up the possibility for patronage in a very big way. I simply remarked that the hon. member must be thinking back to the way his government operated for 22 years in all fields. I, of course, was making no allegation against any specific firm. He knows that quite well.


Donald Stovel Macdonald: Last night I brought to the attention of the committee and the minister a legal objection to some of the terminology used in the proposed amendment to section 21(a) 2 (e) and section 21(a) 6(b). The words in question to which I referred are "interest in any such instrument". The objection I brought forward at that time was that the instrument in question is a negotiable instrument and is transferable with all the interest in it or is not transferable at all. It is not severable. The minister subsequently advised me of the government's intention in this amendment, which was apparently to refer to a common banking practice whereby a contract can be entered into between the

Export Credits Insurance Act corporation and a commercial bank and, tor a consideration, give the commercial bank participation in the instrument.
I should like to suggest to the minister that the section might be further amended to extend the powers of the corporation so as to give the corporation the power to exchange any guaranteed instrument for two or more instruments of lesser principal amount, aggregating the amount of the original instrument, and to sell all or any part of such instruments. The minister is aware of a recent negotiation under this statute which provided for the refunding of obligations which had previously been created, and I should like to recommend to him the possibility of incorporating in the powers of the corporation this further power so that if it becomes commercially feasible the corporation may sell some of its obligations on the public money market or to private purchasers. My submission is that the wording at the present time does not give the corporation this power, and being a statutory corporation it is strictly limited to the powers conferred under the statute. Therefore I would propose that amendment to the minister.


George Harris Hees: Mr. Chairman, I thank the hon. member for Rosedale for his thoughtful suggestion. I have discussed this matter with the officers of the Export Credits Insurance Corporation and they consider that the powers which will be conferred upon them by this amendment provide them with the widest possible powers they could need. What is being done here is making it possible for our corporation to operate in exactly the same manner as the export-import bank of the United States, which handles these matters in the same way as we do. The officers of the corporation are of the opinion that this amendment will give them the fullest possible powers that they could need.


Donald Stovel Macdonald: A supplementary question-


Mr. Byrne:: Mr. Chairman-


The Chairman:: Order. The hon. member for Rosedale is asking a supplementary question. Perhaps the hon. member for Kootenay East would possess himself for a minute.


Donald Stovel Macdonald: Mr. Chairman, may I address a supplementary question to the minister in view of his answer? Could I presume from the answer the minister gave that it will be the intention of the corporation to confine its participation to the investment practice followed, and there will be no proposal to sell these instruments on the public money market if a purchaser should come forward?


George Harris Hees: Mr. Chairman, I am advised that the answer in general is yes, it is not likely


that they would sell these instruments on the public money market. It is possible, and if it were so desired, they could; but, it is not likely.


James Allen (Jim) Byrne: Mr. Chairman, my decision to participate in this debate was prompted by the political tirade that we received from the minister yesterday afternoon. I had felt, after listening to the minister in the throne speech debate, that he at least had learned the government benches were no longer the opposition and he had accepted the responsibility of governing. Therefore it was much to my surprise when yesterday he launched into this political tirade. I am sure it was only prompted by suggestion by one of the members of the committee that we should in all sincerity pay attention to make sure that all articles being exported under the administration of this act would have a large Canadian labour content. The minister pointed out that while it was not contained in a section of the act, under the regulations it was considered important that at least 80 per cent of the labour content of these exports should fall within that category.


Mr. Mcllraiih:: The Canadian content
should be 80 per cent.


James Allen (Jim) Byrne: Yes, that the Canadian labour content should be 80 per cent.


George James McIlraith: Not the labour content.


James Allen (Jim) Byrne: In any case, the hon. member was seeking information, which is his right under the rules of the house, and I think it was up to the minister to point out that these were the requirements of the regulations, rather than embark upon a political speech. Some hon. members may recall seeing a cartoon in one of the local newspapers following the conclusion of the throne speech debate, in which an attendant was sweeping out the political speeches to the front entrance of parliament. It seems that the minister has taken the other end of the broom and is attempting to sweep the political garbage back into this chamber.
I have a very high regard for the minister's predecessor, as have many hon. members in this house, and it was my intention to rise on the very question introduced by the hon. member for Bonavista-Twillingate. There had been no indication except through the mouth of the minister of any flagrant patronage taking place under the former administration. The minister seemed to indicate that this was a fact throughout the 22 years of Liberal administration. I am wondering why this has not been revealed by some concrete evidence. If the minister has such evidence, I think it is up to him to produce it in the house.

I am wondering, also, whether the minister has some evidence of the former administration having turned down applications, which necessitated the introduction of section 21 (1) (a), and if it was not, as the hon. member for Skeena said, that latterly the banks had refused-using the minister's own words- to undertake this responsibility, making it necessary for the government to introduce this section.
I feel very strongly about this matter. I hope the minister, in the interests of good and orderly debate and getting the business of the house dealt with, will contain himself in the future and not precipitate such debates.


Mr. Cardiff:: Mr. Chairman, I should like to cite a concrete case in my riding. It has nothing to do with wheat. Apparently some hon. members think the only thing exported from this country is wheat. This has nothing to do with wheat. There is a manufacturing firm in my riding which has been in operation for at least 30 years. That takes in the 22 years the Liberal government held office before this government came into power. Only just recently has that firm taken the opportunity of obtaining any advantage from this Export Credits Insurance Corporation. They went into this, I think, a little over a year ago. They have increased their plant and they have increased their labour force from about 100 people to almost 200 in the last year and a half. They have sold Champion road graders, in connection with which the Canadian content is over 80 per cent, and it is Canadian labour that operates there.
Hon. members can readily understand that this has not anything to do with wheat. Apparently they think the only commodity we have exported is wheat. But here is a firm which has been in operation for 30 years, and they never took advantage of this export credit before. Why have they taken it now. There must be some very good reason, because it has not only helped them but it has helped Canadians as a whole.


Mr. McGee:: Mr. Chairman, I intended to make a contribution to this debate last evening but decided to let it pass until this afternoon, when our hon. friend from Kootenay East rose and proceeded to read the minister a lecture. I would simply refer the hon. member to a member of his own group who was sidling down to a more prominent position on the front bench last night; I see he has resumed his position today. The reference is to be found on page 553 of Hansard as follows:
I would have thought that in a measure of this kind we should first of all endeavour to assist the export of Canadian products abroad which contain as high a content of Canadian labour as possible.
27507-3-374
Export Credits Insurance Act
Later, on page 555, he goes on to say:
If we wish to take care of the unemployment situation in this country we have to emphasize and advance quickly those goods which employ an increasing amount of Canadian labour in their manufacture.
The clear implication contained in those remarks, along with others with specific reference to agricultural products only, is that the purpose of this legislation and, indeed, of the whole program, as has been demonstrated so ably by the Minister of Trade and Commerce, was to aid one sector of our economy rather than another. Surely the minister should be forgiven and, indeed, encouraged to correct that impression in the most emphatic and definite way possible, and given the means of getting on with the job, putting this money to work in order to provide increased employment for the people in my own constituency, which, incidentally, happens to be the fastest growing industrial district in this country today, as well as in others across Canada.


Paul Joseph James Martin: Let us get on with it, then.


Frank Charles McGee: We do not need the lint picking of the hon. member for Ottawa West and the hon. member for St. Antoine-Westmount the latter of whom, according to the Pickersgill dictionary of parliamentary names can best be described as the bare faced boy from St. James street. I think he should be introduced to his bull moose friend from Vancouver Centre who wanted to take this out of the public field and put it into the private sector entirely. This is an area of public activity designed to bring about an expansion of trade and to provide new jobs, and the sooner we get this legislation passed and into operation the earlier people in my constituency and many others will be put to work. Not long ago, crocodile tears were being shed by members on the benches opposite about the necessity of creating employment. Now, let us get on with it.


James Allen (Jim) Byrne: I wonder why the hon. member who has just resumed his seat did not use his persuasive abilities to encourage the government to call parliament three months ago in order to get on with this legislation. It seems to me that the remarks of the hon. member for Vancouver South were made for the purpose of obtaining information and if, as a result, it was necessary to deliver to the house a long political tirade, then I am not familiar with the usual operations of a committee such as this.
I want to make one point clear. It still appears to me that ministers on the government benches remain of the opinion that they are sitting here in the opposition. Let them realize that they form the government. Let
576	HOUSE OF COMMONS
Export Credits Insurance Act them give us the facts concerning this legislation, and if we agree with them we shall be happy to make progress.


Mr. Muir (Cape Breton North and Victoria):: I should like to make one observation, namely to impress on all members of this committee how important this legislation is to the people of Cape Breton island and, indeed, to the whole of Nova Scotia. We have a steel making industry there-the manufacture of steel rails-which, as I think all members will agree, have a high labour content. This measure is important since it is a means of getting employment for people on Cape Breton island. Having made that observation, may I ask the minister what would be the value of the steel rails and other products which have been sold by the Dominion Steel and Coal Company from their plant at Sydney with the assistance of this legislation.


George Harris Hees: About $25 million.


Reid Scott: I have a few remarks to address to the committee, but before making them I wonder if I might ask the minister for a word of explanation about clause 3 of the bill. Subclause (a) is concerned with lending money to importers. What groups or organizations fall within the classification of importers?


George Harris Hees: We are merely accepting directly the notes of the foreign buyers. That is what it means.


Reid Scott: Does that include foreign governments?


George Harris Hees: Either a foreign government or an individual private firm.


Reid Scott: In my remarks yesterday I thought I had made a case for an extension of low interest loans to foreign governments whose countries are in a stage of development. I do not want to repeat all the material I submitted to the committee yesterday. Indeed, I thought the case I made was so strong that the minister would have himself brought in an amendment today covering the subject. However, since he has not done so, and for the sake of bringing this matter before the committee, I want to propose an amendment to the clause. The purpose of the amendment is to make clear that the government can and will go into the question of making low cost loans to underdeveloped countries.
The figures given us yesterday by the minister all related to loans which have been made at commercial rates of interest. My point is that the developing nations of the world cannot afford to take on any further loans at commercial rates of interest because

the cost of paying the interest, together with the repayment of capital, is too high. I would therefore move:
That subclause (1) of clause (3) be amended by adding to subsection (2) of section 21 (a), as that subsection is thereby substituted, the following paragraph:
"(f) for the purpose of assisting in the development of other countries, lend money to the government of any other country, or its agent, upon such terms as to interest, if any, and repayment and other terms and conditions as will best fulfil the true intent and spirit of this paragraph."


George Harris Hees: Yesterday, in the remarks I made in answer to the suggestion put forward by the hon. member for Danforth, I outlined how already section 21 (a) did precisely what the hon. member has suggested. However, with regard to his proposed amendment I would refer the committee to section 54 of the British North America Act which reads as follows:
It shall not be lawful for the House of Commons to adopt or pass any vote, resolution, address, or bill for the appropriation of any part of the public revenue or of any tax or impost to any purpose that has not been first recommended to that house by message of the Governor General in the session in which such vote, resolution, address or bill is proposed.
Therefore, Mr. Chairman, I submit that the proposed amendment, having not been first recommended to the house by message of the Governor General, is clearly out of order.
(Translation):


Gilles Grégoire: Mr. Chairman-
(Text):


Gordon Campbell Chown: Is the hon. member speaking to the point of order?


Gilles Grégoire: May I speak on that?


Gordon Campbell Chown: Until the relevancy of this amendment has been ruled upon by the Chair, I just want to hear hon. members on the point of order, if I may.


Frank Howard: Mr. Chairman, on the point of order, as I understand it, the minister has indicated already that in the proposed paragraph (a) of the bill the word "importer" is taken to mean and include the government of another country, if such should be the case and the desire. I submit, Mr. Chairman, that all the proposed amendment seeks to do is to say with regard to an importer who is the government of another country that we should establish certain rules and have certain guideposts. There is nothing new whatever in so far as being contrary to section 54 of the British North America Act. It is dealing merely with precisely the same thing with which the minister dealt in paragraph (a). It seeks merely to deal with the question of an importer from the point of view of drawing a distinction between an importer who is a private corporation or a private person in another country and an importer who is in

fact a government or an agency, or an agent of a government in another country. It is merely to draw a clarification so far as our approach is concerned when that importer is the government of another country and raises no tax or impost or appropriation of any part of public funds. It deals alone with that which has already been brought in by way of a message from His Excellency, the one brought in by the minister. It draws only a distinction between those two types of importers, the better to assist other countries in developing economically.


George Harris Hees: Mr. Chairman, in speaking to the point of order raised by the hon. member for Skeena, the proposed amendment would appear to direct the way in which the money would be used, and that is clearly changing the legislation before the committee.


Reid Scott: Mr. Chairman, on the point of order, I have tried quickly to read the Governor General's recommendations, and on page 8 of Hansard, the second column, you will find these words:
Canada's prosperity and growth must ultimately rest in large measure upon its exports. To achieve adequate export levels it will be necessary to increase further Canada's capacity to produce competitively and its ability to sell in export markets. The government's industrial programs are directed toward these ends. Its commercial policy negotiations have the objective of opening additional markets to Canadian producers in fair exchange for opportunities for others to sell in Canada.
It continues along those lines, and a little later goes on:
You will be asked to provide the funds necessary for this increasing trade promotion work. Amendments to the Export Credits Insurance Act will also be placed before you-
And so on. I respectfully submit that the words I have just read clearly envisage the kind of program which is added by the amendment before you, and the minister cannot possibly say that the message of the Governor General did not contain precisely this kind of idea.


Frank Howard: May I expand upon that and point out to the minister that the resolution which preceded the bill, as appears on page 449 of Hansard for October 12 and which the minister moved, reads as follows:
That it is expedient to introduce a measure to amend the Export Credits Insurance Act to increase from two hundred million to four hundred million dollars the limit of the liability of the Export Credits Insurance Corporation under contracts of insurance entered into under section 21 of the act; and to provide further-
I think these are the key words, Mr. Chairman.
-for certain changes in connection with the administration of the act.
Export Credits Insurance Act
This is precisely the section with which we are dealing and to which the minister referred, and to which the explanatory notes in the bill refer. It is in no way directing the expenditure of any moneys; it is dealing precisely with the message of His Excellency, the administration of the act, and the like.
(Translation):


Gilles Grégoire: Mr. Chairman, I should like to say a word about this question of low-interest loans made by the government or by that corporation to other countries.
In my opinion, the amendment is out of order for two reasons. First of all, how can Canada lend money to other countries when it has to borrow some because it does not even have enough for itself? How can one lend money when one has none and one has to borrow elsewhere? That is absolutely ridiculous.
Furthermore, how can we think of lending money at low interest to other countries when our own citizens have to borrow from finance companies to pay for what they need, when they have to pay 24, 28 and even 32 per cent interest?
If we can afford to make low interest loans, let us lend first of all to the Canadian people.
(Text) :


Gordon Campbell Chown: Order. I am now trying to give a decision as to the admissibility of the amendment. If the hon. member would just wait for a moment or two until we have that settled, we can then hear what he has to say.


George Harris Hees: Mr. Chairman, in answer to the hon. member for Skeena, I should just like to read the original resolution:
That it is expedient to introduce a measure to amend the Export Credits Insurance Act to increase from two hundred million dollars to four hundred million dollars the limit of the liability of the Export Credits Insurance Corporation under contracts of insurance entered into under section 21 of the act; and to provide further for certain changes in connection with the administration of the act.
These are not general changes. These are specific changes as outlined in the bill before us, and I submit, Mr. Chairman, that what the hon. member for Danforth has suggested are additional changes which would direct how the money administered should be used. Therefore the amendment, according to section 54 of the British North America Act, is out of order.

Export Credits Insurance Act


Stanley Howard Knowles: Mr. Chairman, may I submit with all respect to my hon. friend, the Minister of Trade and Commerce that, although he may have had in mind what the administrative changes were going to be, those administrative changes were not spelled out in the prior resolution which was brought in with the concurrence of the Governor General. What we have before us in the resolution are two things, a new ceiling of $400 million and authority to make certain administrative changes. This amendment is still governed by the new ceiling of $400 million and does not propose to go through that ceiling. This amendment provides for administrative changes, and I submit that because of the general wording of the latter part of the resolution, hon. members of the committee are entitled to make amendments which come within that general framework. As I say, the word "certain" may have meant something to the minister, but that part of the resolution did not spell out the precise changes to be made. So far as the proposed amendment affects the question of money, I submit it does not involve any expenditure not already provided for in the resolution. The resolution sets a new ceiling of $400 million, and this amendment comes under that ceiling.


Frank Charles McGee: Mr. Chairman, apparently
during the absence from the house of the hon. member for Winnipeg North Centre a certain creakiness has set in to the process by which he approaches procedural matters. If I heard him correctly a moment ago, his statement was that because there was a general statement in the resolution stage, this immediately opened both doors and one would be entitled from any corner of this house to drive through a carriage and four, with a completely different bill, with different particular articles behind them, at a later stage in the resolution. Any resolution by definition states the proposition in general terms. Then, as I understand it, the procedure is that the bill, when introduced to the house, lays out in particular what the references were in general in the resolution and in the same general terms in the speech from the throne. In concluding, might I add that the group in the corner, the lonesome eight as we used to call them, used to complain that they did not have any lawyers in their ranks. It seems to me that perhaps they have too many.


Frank Howard: I would not care to be so unkind as to make any comment about the heady position in which the parliamentary secretary now finds himself. It is quite obvious that he has his eyes on other goals than
the one about which he was speaking a moment ago. I should like to read from section 54 to which the minister referred:
54. It shall not be lawful for the House of Commons to adopt or pass any vote, resolution, address, or bill for the-
And these are not enumerated.
-appropriation of any part of the public revenue,-
This specific amendment does not appropriate any part of the public revenue.
-or of any tax or impost,-
This amendment does not contemplate any tax or impost.
-to any purpose that has not been first recommended to that house by message of the Governor General in the session in which such vote, resolution, address, or bill is proposed.
It does not seek to appropriate any part of the public revenue. That has already been done. That has already been dealt with in an earlier clause of the bill. It does not impose any tax or impost; neither does it deal with those specific things. Neither does it give direction to a course which the Governor General or the corporation may follow with respect to the lending of certain money; for these loans are ones within the general limitation imposed earlier and are permissive in any event because of the preceding words of the proposed section 2 which reads as follows:
When authorized by the governor in council, the corporation may-
Then it enumerates (a), (b), (c) and (d). We propose merely the additional one as a further clarification of this permissive authority given by parliament to the Governor General and to the corporation.


Gordon Campbell Chown: Order. I am not so much concerned whether there is an extension of the resolution on which the bill under consideration was based in terms of expanding the amount of money that may be committed under this section by the crown, although I would quote authority in that respect which I think it would be worth while to put on the record. I refer to Beauchesne's fourth edition at page 207, paragraph 3, which reads as follows:
(3) The guiding principle in determining the effect of an amendment upon the financial initiative of the crown is that the communication, to which the royal demand of recommendation is attached, must be treated as laying down once for all (unless withdrawn and replaced) not only the amount of a charge, but also its objects, purposes, conditions and qualifications. In relation to the standard thereby fixed, an amendment infringes the financial initiative of the crown, not only if it increases the amount, but also if it extends the objects and purposes,-
Those are the words which I think should be especially noted and I will repeat them.
[Mr. Hees.j

-but also if it extends the objects and purposes, or relaxes the conditions and qualifications expressed in the communication by which the crown has demanded or recommended a charge.
I find it a little bit difficult to reconcile the wording of this amendment with the explanatory note in respect of clause 3(1) in the bill which reads as follows:
This amendment would permit the corporation to accept direct obligations of importers under or in respect of export transactions, to lend money to holders of instruments made payable to the corporation and to sell instruments guaranteed by the corporation or made payable to it.
This is the point at which the question of relevancy arises. In this respect I refer the hon. gentleman to May's sixteenth edition at page 556, subparagraph 13, which reads as follows:
Amendments or new clauses creating public charges cannot be proposed, if no money resolution or ways and means resolution has been passed, or if the amendment or clause is not covered by the terms of the resolution.
This gets me back to where I started, namely the possibility that the fundamental basis of the bill might be extended by the terms of the amendment and involve a public charge, and a secondary ground to which I referred briefly in comparing the amendment proposed to the explanatory notes in the bill. On the question of relevancy I find that it extends the meaning of the section and the scope of the entire bill. Accordingly, I am obliged to rule the amendment out of order.
Shall clause 3 carry?


Reid Scott: With the greatest of respect, Mr. Chairman, to the opinion which you have just thoughtfully delivered, I regretfully must appeal your ruling to the house.
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:
The question which has been appealed to the house from the ruling of the chairman of the committee of the whole is as follows:
In committee of the whole, when clause 3 of Bill C-63, an act to amend the Export Credits Insurance Act was being considered, the hon. member for Danforth moved in amendment the following:
"That subclause 1 of clause 3 be amended by adding the subsection 2 of section 21(a), as that subsection is thereby substituted, the following paragraph:
* (f) for the purpose of assisting in the development of other countries, lend money to the government of any other country, or its agent, upon such terms as to interest, if any, and repayment and other terms and conditions as will best fulfil the true intent and spirit of this paragraph.' "
I ruled the amendment out of order as being irrelevant in that it purported to extend the fundamental provisions of the bill and aleo that it probably infringed the financial initiative of the crown. Whereupon the hon. member for Danforth appealed to the house from the ruling of the Chair.
Division
Mr. Speaker put the question as follows:
The question before the house is an appeal from a ruling given by the chairman of committees of the whole house, as follows:
In committee of the whole when clause 3 of Bill No. C-63, to amend the Export Credits Insurance Act, was being considered, the hon. member for Danforth (Mr. Scott) moved in amendment the following:
That subclause 1 of clause 3 be amended by adding to subsection 2 of section 21(a), as that subsection is thereby substituted, the following paragraph:
" (f) for the purpose of assisting in the development of other countries, lend money to the government of any other country, or its agent, upon such terms as to interest, if any, and repayment and other terms and conditions as will best fulfil the true intent and spirit of this paragraph".
The chairman ruled the amendment out of order as being irrelevant, in that it purported to extend the fundamental provisions of the bill, and also that it probably infringed the financial initiative of the crown, whereupon the hon. member for Danforth appealed to the house from the ruling of the Chair.


Mr. Speaker:: I declare the ruling confirmed. It being now five o'clock the house will proceed to the consideration of private members' business as listed on today's order paper, namely, private bills.
There being no private bills the house will consider public bills.



BANKRUPTCY ACT


Mr. David Orlikow (Winnipeg North) moved: the second reading of Bill No. C-7 to amend the Bankruptcy Act (wage earners' assignments).


Mr. Speaker:: Order. If there are hon. members who intend to leave the chamber,, may they do so with dispatch and a certain degree of quiet so that the hon. member from Winnipeg North may be heard without undue delay.


David Orlikow: More and more people are finding it impossible to meet payments for purchases made on instalments and are going broke in the process. The old adages we used to hear preached so often about careful management, thrift, and buying only what we can afford have practically disappeared from the Canadian language except, of course, where applied by some stump speakers to government operations. Few people in Canada can ignore the siren calls of the advertisers designed to make us all want to keep up with the Joneses. It is practically a sin if we do not own our home, drive a car or possess a television set, an automatic washing machine or a dryer. Even if we cannot really afford these things we have got to have them. After all, it is easy to charge now and pay later or, as the air lines advertise so effectively, travel now and pay later. And if some people do not know how to get credit, there are plenty of retailers and friendly finance companies who will show them how to do it with a simple stroke of a pen.
Later, many people find it is difficult or impossible to meet the supposedly easy payments; but by then it is too late, the borrower is in trouble. He finds out, then, that he is not nearly as popular as he was, or thought he was, when he was buying. He finds out that he is just a small cog in the wheel, just a statistic. He finds out that the retail store which encouraged him to buy the stove or the washing machine or the television set, and which did not ask too many questions about how many other things he was buying at the same time, or whether he could afford to pay for them or not, wants its money. What is more likely, and even worse, is that the finance company to which the retail store

sold the note wants the money and wants it right away. The borrower is on his own. It is then he gets the nasty telephone calls, the threatening letters, the judgment summons, the garnishee order and all the rest of it. This is the time when the creditor stops answering the telephone; when he stops answering the ring of the doorbell and pulls down the blinds of the front room so that people will think he is not at home. But, of course, by that time it is too late. This is when employers often fire employees because they do not like to be involved in the kind of squeeze represented by garnishee orders. By this time many people are so far in debt that they cannot manage to work their way out in the time allotted to them.
This bill uses the present machinery of the Bankruptcy Act and the bankruptcy courts to protect both the wage earner in trouble and his creditor. The legitimate creditor is entitled to protection. The bill offers an inexpensive procedure by means of which the wage earner can pay his creditors.
Under this bill a new part is added to the Bankruptcy Act following section 26 of the act. This permits an insolvent wage earner to make an assignment to an official receiver who has the power to appoint a trustee to handle the case. The wage earner is obliged to submit his future wages to the trustee's control, so that the trustee may make regular payments to the wage earner's creditors.
The trustee can apply to the bankruptcy court for relief of the wage earner against unconscionable contracts, and the court has the power to exempt the wage earner from payment of excessive interest charges of which there are far too many.
The court has the power to enforce obedience to the arrangements worked out by the trustee. The court has the power to discharge the wage earner when he has fulfilled his obligations under the proposal. If the debts have not been paid off after three years, the wage earner must apply to the court for an extension of time in which to do so.
This bill would help both wage earner and creditor. The wage earner would be aided in the orderly payment of his debts, and the creditor would be more likely to get the money which he has loaned to the wage earner, usually in the form of goods sold.
Mr. Speaker, similar bills have been enacted in the United States and have helped thousands of creditors there. This bill would prevent financial ruin for many people and deserves the support of all hon. members.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, the general idea behind this bill is commendable. There has long been 27507-3-38
Bankruptcy Act
a need in this country for legislation of this kind which will simplify the procedure for people who are not in business and to whom the bankruptcy legislation does not presently apply. These are people who want to make an arrangement of some kind with their creditors but do not have the assets or the ability to proceed under the Bankruptcy Act as it presently stands.
Legislation similar to this particular bill has already been introduced into other legislative bodies, as has been said by the hon. member who introduced the bill. Specifically in Canada there was a bill in the province of Alberta which was passed in 1959 and had similar objectives, but was a much different bill. This bill was the orderly payment of debts act of 1959 of the province of Alberta. That legislation was passed in order to permit debtors who wanted to make an assignment or an arrangement with their creditors to do so. The Supreme Court of Canada ruled in 1960 that the measure was invalid because it infringed on the powers of the federal parliament to make bankruptcy laws. This decision is reported in 1960 Supreme Court Reports, page 571. The supreme court held that, although there may have been some provincial rights involved, the legislation which the province of Alberta had passed was in substance bankruptcy legislation and therefore beyond the power of a provincial legislature.
Following this declaration, of course, it is obvious that the power to pass such legislation rests solely within the parliament of Canada, and this legislation now proposed appears to be quite in order from the constitutional viewpoint. Although the bill is not yet before us, Mr. Speaker, I think we should take note of the fact that in the other place the government has already introduced legislation of a similar type, and it is to be found in Bill S-2 of the Senate. I would not want to discuss this bill because it has not yet come before us, but I think we should take note of the fact that there is similar legislation proposed, although somewhat different in form and content, to the bill we are now discussing.
Mr. Speaker, I should like to point out a few matters which are deficiencies in the bill which is now presented to us. The bill we have before us is applicable only to persons classified as wage earners, and I believe there are others who should also be covered by this legislation. I think it could very well be extended to include anyone who is not normally included in the present bankruptcy legislation. The present legislation makes provision for companies, and persons carrying on a trade or business, to go into bankruptcy, but it does not make provision

Bankruptcy Act
for the private individual. I think this bill would be improved if it were expanded to include any private person, not just an individual wage earner as defined in the bill.
I think there is a second deficiency we should look at very carefully, and this is that under Bill No. C-7, the wage earner has to go into bankruptcy before he can get the protection or the benefit of the act. I think there should be a simplified way of allowing debtors to make a compromise or consolidation of debts other than by going into bankruptcy. I feel that the wording of clause 26(b), although we are not permitted to discuss it, indicates that the wage earner must have filed an assignment, and therefore at that point he would be a bankrupt; and if he had the ability in subsequent years to pay off his debts bit by bit and finally get released, in the meantime he would have been classified a bankrupt even if his debts were not large and he was asking merely for an extension.
There are a couple of other things I should likewise mention. The most difficult part of this bill, I believe, is the clause which allows a trustee to apply to the courts to modify existing contracts. This particular clause is a most difficult one, particularly from the constitutional aspect, because contracts are certainly property and civil rights, and normally come within the jurisdiction of the province. However, the supreme court might very well hold that, if it were ancillary to bankruptcy legislation, it would be valid. But we have another matter to consider, a moral matter rather than a legal or constitutional one, and that is whether we should allow a court or a trustee to alter an existing contract. We know that such a course has recently been followed in certain provincial legislation, in which contracts which were binding were permitted to be altered. But contracts generally are considered to be sacred once they are signed by parties who know what they are doing when they sign them. Any other type of contract which is fraudulent can be declared void by the courts and set aside. But I believe we are entering into a very dangerous field, Mr. Speaker, in the particular clause of this bill which permits the court to revise a contract already signed and in force at the time the trustee takes over. I think that is a very difficult matter and that the clause as it presently stands does not contain the proper safeguards that we should like to have in connection with the validity and sacredness of contracts properly signed. This particular clause causes me some considerable difficulty.
I would also suggest to the hon. member that the bill is not clear as to whether or not debts have to be paid in full before a debtor can obtain a discharge. The notes in connection with the bill indicate that they must be,

but the bill itself is not clear. There is provision for the discharge of a person who has lived up to whatever is provided for. I think the bill could be improved considerably were it made more clear whether or not debts must be paid up in full before a discharge could be received.
There is one other difficulty which I can see in the bill as it stands at present. It relates to the provision that all other sections of the Bankruptcy Act shall apply to this amendment. The Bankruptcy Act is an extremely complicated and difficult statute, of course. It contains provisions which apply to large bankruptcies or to persons who have extremely large debts. It may be the case that there are a great many sections of the Bankruptcy Act which should not apply. The difficulty with regard to this type of legislation was pointed out in a case in the Ontario supreme court. It was styled as Be W. Hanna Company and is found in Canadian Bankruptcy Reports 1961, volume 2, at page 70. In that particular case a proposal under the Bankruptcy Act was being considered and it was found most difficult to apply all the provisions of the Bankruptcy Act to proposals. I believe the present bill is one further extension of the proposals which at present are in the bill. Hence in this particular case I think it would be much better if there were a more detailed spelling out of the provisions of the Bankruptcy Act which should apply to wage earners.
Notwithstanding the criticisms I have made, Mr. Speaker, the principle behind the bill is a good one. I believe the principle of Bill No. S-2 which may in due course come before us should be left open, and that we should consider this Senate bill when it comes here, prior to making a final decision on Bill No. C-7 which is now before us. I believe the major difficulty is that the debtor himself must go into bankruptcy. I think there should be a provision which would allow him merely to consolidate his debts and to make a proposal to his creditors which would be sanctioned by the courts and by law, without the need of going into bankruptcy.
There is in the bill a provision that the trustee shall be appointed without being bonded and that any person other than a licensed trustee can be appointed. I believe this is a rather dangerous procedure. I realize that it is necessary to make provisions under which it will be easy for the debtor to make an application under this act. However, to make an application to any person, whether a licensed trustee or not or whether bonded or not, I believe is a rather dangerous proposal. In the result, Mr. Speaker, while I commend the principle of the bill, I would prefer that we do not make a final decision on

it until amendments could be made in order to bring it into conformity with some of the suggestions I have made, and perhaps until after we have had an opportunity to consider Bill No. S-2 which no doubt will in due course come to us from the other place.


James Allen (Jim) Byrne: Mr. Speaker, the hon. member for Winnipeg North Centre (Mr. Knowles) is to be commended-


Stanley Howard Knowles: The hon. member means the hon. member for Winnipeg North (Mr. Orlikow).


James Allen (Jim) Byrne: Yes, the hon. member for Winnipeg North. The hon. member for Winnipeg North Centre is on his feet so often in the house that one can probably be given some consideration and understanding with regard to errors that are made. The hon. member rises quite frequently, to his credit I must admit.
This bill now before us is one that takes into consideration the serious financial situation in which an individual wage earner or other individual may find himself through over-extending his credit. The hon. member has pointed out the many inducements that are put before the buying public in these days of mass production and as an indication that it is becoming more widespread and that there should be some legislation which would assist the individual as opposed to the corporation, has referred to the fact that even the chartered banks have now gone into the consumer credit business. However, there is one thing which we must bear in mind, namely that the creditor, in extending credit, will with respect to each application give consideration to the trustworthiness of - the applicant. As we constrict the collecting possibilities or, for that matter, in many instances the interest rates, we narrow the field in which the applicant may be able to obtain necessary financing under circumstances that may be extremely urgent. For that reason I think we should be careful that we do not, by enacting too many measures, restrict the ability of the individual to obtain cash when it is required.
I was unable to hear the hon. member too well when he was speaking and I am not sure whether he referred to the Lacombe act which is in effect in the province of Quebec. This act seems to work successfully, I have been told, in that a person who finds himself in circumstances of imminent bankruptcy may apply to the court for permission to consolidate his debts and to make restitution on a monthly basis as a percentage of his salary. The hon. member for Parry Sound-Muskoka has indicated that such an act was declared to be ultra vires the powers 27507-3-38)
Bankruptcy Act
of the provinces in respect of the province of Alberta. There must therefore be some difference in the two acts to which I am referring. It might be possible that this matter could be given consideration by the various provinces.
We believe that the principle of this measure is worthy of the consideration of the house. I as a member on this side of the house would not wish to delay action of the house. For that reason I think any further discussion by me on the matter is perhaps superfluous.
(Translation):


Gilles Grégoire: Mr. Speaker, first, I should like to make an observation. A while ago, I heard a member from which constituency I do not know, mention that similar legislation had been passed in Alberta only to be found ultra vires by the supreme court.
Well, I must say, Mr. Speaker, it does not mean that the legislation is bad, because, in Alberta, the Social Credit government tried some time ago to have seven pieces of legislation concerning money and provincial banks adopted, and they were all rejected by the privy council in London. Yet, they were the best ever put forward either by a provincial government or a federal government.
Mr. Speaker, when one reads the bill now before the house, one cannot fail to see how good it is, especially when it is seeking to protect the consumer from the excessive practices of the finance companies, which are only thinking of taking advantage of the consumer and getting rich at his expense.
Right now, I just happen to have, in the riding of Lapointe and in the whole Saguenay area, an example of consumers who have been taken in by finance companies and sewing machine salesmen. More than 80 people bought sewing machines or rather, were supposed to get them free. But before receiving them, they were asked to sign a financing contract, after which the selling firm agreed to make the monthly payments.
The selling firm discounted all contracts and notes through a finance company, the Seaboard Finance, and did not continue to make payments on behalf of the buyers. Today, those customers who got their sewing machines free have to pay them double their value.
If this Bill No. C-7 carried, the contracts would have to be revised so that the customers would not have to pay double the normal selling price simply because of a salesmanship scheme.

Bankruptcy Act
I think this bill would also provide a protection for the consumers who, in many cases, because we have tight money, must use finance plans to get what they need or else do without it. Very often the consumer has to borrow from some finance company to buy living room or bedroom furniture and then he may be out of work because that is a consequence of our present system. He may wish to buy a house with a repayment period of 25 years, but even then, he may happen to lose his job.
When that happens, the finance companies never lose, they repossess the articles, refrigerators, electrical stoves or furniture and then, the consumer loses not only the amounts he has already paid, but he is also deprived of what he had bought by the finance company which manages to resell those articles to friends, at a price much lower than the ordinary sale price. The finance company has the right to sue for the balance, that is the difference between the sale price and the instalments the first purchaser could not make.
Those are, Mr. Speaker, the situations in which the Canadian consumers find themselves. I could give you so many instances where it is always the little man who is crushed by the big finance companies. However, if one goes to the heart of the matter, one finds that in most cases those finance companies are branches of chartered banks which, finding that they do not make enough money when they make loans at 6 per cent, subsidize finance companies which make loans at interest rates of up to 24, 28 and even 32 per cent.
I know what I am talking about, Mr. Speaker, because in order to buy my car which is parked near the parliament buildings, I had to pay an interest rate of 32 per cent.
Then, the finance companies are subsidized or assisted by the chartered banks which are used to take unfair advantage of the small wage earner who is always facing great difficulties and paying more than others because he does not have the purchasing power with which to buy our goods.


Mr. Ouellel:: You are not the only one who has to pay for his car through a finance company.


Gilles Grégoire: No, I am not the only one to have bought a car through a finance company. Fortunately I finished paying for it fourteen months ago. But a great many persons in Canada will lose everything because they cannot make their payments.

Having consulted with the Social Credit group and for the reasons that I have just mentioned, and in order to bring into line the finance companies which take advantage of the small wage earner, I can say that we are going to vote for Bill C-7.
(Text):


Mr. R. G. L. Fairweaiher (Royal):: Mr. Speaker, I realize, of course, that the matter we are discussing will not quicken the hearts of many Canadians but I do agree that it has very important implications for what I might call a credit cushioned society. I think the hon. member for Kootenay East is naive when he suggests to us that all those sellers who are anxious to extend credit investigate the people to whom they are advancing credit. This has not been my experience. I think it is one of the deplorable aspects of today's commercial practice that the ability of the purchaser to repay is all too often forgotten.
Having said that, I think that as a lawyer I must admit that on many occasions the commercial statutes of the provinces and of this parliament do not in any way keep pace with the facts of commercial life. I suggest that the amendment to the Bankruptcy Act which has been introduced in another place satisfies many of the provisions of Bill No. C-7 now before us. I share the views of the hon. member for Parry Sound-Muskoka about the constitutional problem involved in this bill. I am not one of those who worship at the altar of provincial rights but on the other hand I do not think this house should walk into a constitutional problem when we have been forewarned about it.
I also feel, as has been said by the hon. member for Parry Sound-Muskoka, that the grave deficiency in the present bill is that a wage earner-apparently the bill is intended to include only wage earners-must make an assignment before this legislation becomes effective. In other words, he must go bankrupt. This is a tragic thing. As I understand it, he could not even be sent to the other place if he was a bankrupt, at least an undischarged one, and we can think of many other disabilities that might face him. Not the least of these is the disability of being known as a bankrupt.
I think this is a grave deficiency in the bill before us. I suggest that the bill introduced require a longer period than that normally

in the other place makes no such drastic provision and therefore it would be well if we waited for the progress of that bill from the other place to this place.
(Translation):


Mr. Clement Vincent (Nicolel-Yamaska):: Mr. Speaker, I am sure that the reasons which led the hon. member for Winnipeg North (Mr. Orlikow) to introduce this bill are praiseworthy.
Like the hon. member for Lapointe (Mr. Gregoire), I must say that even if all salesmen do not act that way, some high-pressure salesmen nowadays do not even take the trouble of inquiring about a person's income before they sell him all kinds of merchandise. We have often met people who have gone bankrupt after signing contracts with such companies.
We must examine this question in the light of those facts, but I feel that the bill introduced by the hon. member for Winnipeg North is somewhat of a replica of the legislation presently under consideration in the Senate. In fact, I had the opportunity of discussing a similar bill with high officials of the government and they referred me to the bill which is before the Senate at present. I have read and re-read that bill, and I really think we should wait until Bill S-2 is passed in order to determine whether it really protects our fellow citizens, wage earners or others in the province of Quebec and in the other provinces of Canada. And if later we, the representatives of the people, both of the wage earners and farmers, find out that that bill does not provide enough protection to wage earners or farmers, it will then be up to us to introduce again in the house a measure to amend that bill, a measure which certainly will be adopted.
As I was saying a moment ago, Mr. Speaker, the reasons which have led the hon. member for Winnipeg North to introduce this measure are good and commendable. On the other hand, I am of the opinion that all members must clearly express their opinion on this bill, in order that we may introduce the best possible measures to protect our wage earners, our farmers and the people in general.
Besides, I noticed that the hon. member for Lapointe agrees wholeheartedly with me when he talks of those high pressure salesmen who, through certain finance companies, go around selling sewing machines, aluminum windows or what have you. The discussion could go on for hours and hours as to why the workers buy these machines or those different articles. However, we could also remind them that when they purchase
Bankruptcy Act
some article, when they sign a contract, they have to pay for it. This does not mean, obviously, that these people are always responsible for those purchases, for too often, the salesmen have tried to lure the customers with what they claim are fine things but which, in fact, are not.
Mr. Speaker, I am in favour of the principle of the bill, but I think we should wait and see what will happen to the bill which is before the other place, in order to be able to see whether there is anything wrong with it and then propose amendments which would certainly benefit the whole country.


Mr. Vincent Drouin (Argenieuil-Deux-Mon-tagnes):: Mr. Speaker, I shall be brief as I do not want to speak until six o'clock.
I should like to point out, however, that the principle of the bill now before us should not be discussed by this house for the good reason that it raises a point of civil law which, in my humble opinion, comes essentially within provincial jurisdiction. Besides, as was stated earlier, the province of Quebec has assumed its responsibilities with regard to the problem caused by the insolvency of the small wage earners.
Therefore, under the pretext that this bill could be related to the Bankruptcy Act, we should not connect to that legislation measures of all kinds which would actually be appended to an act of an exceptional nature, because the Bankruptcy Act is an exception to the general rule providing that all matters of civil law come essentially under provincial jurisdiction.
In concluding, Mr. Speaker, I state once again that under the British North America Act, this matter falls strictly within the competence of the provinces and should not be considered by this house.


David Ouellet: Mr. Speaker, members have talked about salesmen, bankrupt people, all sorts of things.
I am a salesman myself, maybe not the kind of high pressure salesman referred to, but selling has been my profession for 25 years.
I have seen all sorts of things in my life. So I have not much sympathy for certain finance companies, because I have seen so many people robbed by them in a masterful way.


Some hon. Members:: Hear, hear.


David Ouellet: I will refer to a case which may seem somewhat ridiculous. When I was

Bankruptcy Act
working for a big company in the province of Quebec which had sold goods to a certain person, with note after note, I remember that the goods were completely worn out after ten years and the customer still owed more than at the time he purchased the goods.
Legal proceedings are taken against those people. On the other hand, we must admit that some public trustees press people into declaring bankruptcy, when the amount involved is only some $300 or $400, thus freezing their credit, reflecting on their good name and causing them a lot of trouble practically for the rest of their lives.
Earlier today, I heard two hon. members state that there always were lawyers to protect those people. Of course, those lawyers are members of a very distinguished profession, but we should keep in mind that the business of those gentlemen is said to have prospered only during the depression, which means that a good many people had accounts to collect.
In all those matters, it is not so much the individual who is to blame, because, on the television as well as on the radio, he is told all day long: ladies and gentlemen, if you want to be happy, you must have this, and you must have that.
On the other hand, if we were to object too much to those people buying on instalments what they have to buy now and if they were to stop buying, we would really And ourselves living in a period of austerity. You can be sure that that situation would be worse than the former, because the manufacturers would stop producing.
There is something wrong and the house must take the matter under discussion and consider it in the interest of the Canadian people.
(Text):


Mr. J. H. Horner (Acadia):: In rising to speak oh this particular bill, Mr. Speaker, I must say that while I agree with the greater part of the principles behind the bill, there are a few objections that I should like to point out in the short time remaining. The first objection is that this bill is mainly for wage earners. It makes no provision for the small farmer or other individuals who could not rightfully be classed as wage earners. Mention has been made in this debate so far of the the fact the bill makes no classification of individuals earning money. The bill provides protection only for wage earners. For this reason, I prefer Bill No. S-2 to Bill No. C-7.	*
Reference has been made to the fact that similar measures have been introduced in provincial legislatures. The one introduced in Alberta was ruled invalid by the supreme court.


Mr. Speaker:: Order; the hour appointed for private members' business having expired, the house will now revert to the business that was interrupted at five o'clock.



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
The house resumed consideration in committee of Bill No. C-63, to amend the Export Credits Insurance Act-Mr. Hees-Mr. Paul in the chair.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at 8 p.m.
On clause 3-Power to lend or guarantee, etc.
Mr. Drury:: Mr. Chairman, I had occasion to suggest to the minister yesterday that the additional sum of $200 million might more properly be applied to the regular business of the corporation rather than the section 21 business; namely, the section 14 type of business rather than section 21. Could the minister explain why the order in council procedure has been chosen rather than giving effect to the remarks that have been made as to the highly satisfactory degree of performance of this corporation irt the past, its ability to transact business and the desire of the government to avoid red tape, including the passing of orders in council. All these arguments lead to increasing the section 14 authorization rather than section 21.


George Harris Hees: Mr. Chairman, I am glad to answer that question. Under section 14, which is the section under which regular business is transacted, there is the $200 million available to the corporation which is considered by the corporation to be quite sufficient to handle the regular business which it transacts, because as the hon. member will realize, this is regular, short term business and the amount of money used at any one time to provide this insurance is continually revolving as transactions become completed in a relatively short space of time. There is no need, in the opinion of either the corporation or the government, to increase the amount of money available to allow the corporation to carry out all of the regular insurance business it is called upon to carry out.
However, there is a considerable increase throughout the trading world in the type of transaction which section 21(a) is called upon to handle; that is, large transactions which

required under section 14. There are two reasons we require an enlargement of the amount of money available to insure this kind of transaction. First of all, these transactions are usually very large ones covering shipments of wheat, grains, machinery, industrial raw materials, and so on, and governments, particularly those of the United States and Great Britain, and also governments such as those of Germany, France and other industrialized countries, are using this kind of special, large scale insurance on a longer than normal term to make it possible for their exporters to obtain this kind of business in the world market. We are faced with the alternative of either meeting the terms which are made available to exporters in these other countries, or forgoing the business.
As the hon. member knows very well, the trading world of today is becoming an increasingly competitive market place and this government believes it is necessary to make available the kind of insurance that section 21 makes possible in order to obtain for Canada the large scale orders which otherwise could not be obtained for this country, orders which provide not only revenue for the country but a great deal of additional employment for Canadians and also enable Canada, like any other country, to better meet its international payments.


Charles Mills (Bud) Drury: Mr. Chairman, if I might ask a further, supplementary question. As I understand it, sections 14 and 21 do not make any distinction in regard to term, upon which the minister appears to be dwelling; that is, that section 21 business is a different term business. As I recollect, the term is not mentioned in section 14.


George Harris Hees: Mr. Chairman, under section 14 the corporation handles all business which in the normal trading world of today is considered normal business. In other words, there is a recognized period of completion of a transaction for practically every type of commodity, a period during which it is reasonable to expect that the transaction for that particular type of commodity should be completed.
When requests are made to the corporation for insurance to cover a normal period at a normal rate of charge for that service, the corporation covers those transactions on its own under the authority provided it in section 14. But if the terms requested by the exporter in order to meet the competition from foreign countries are such that the directors of the corporation consider that such business is not normal business, it is of a longer period than that which would normally be allowed for the completion of the transaction; or if it is
Export Credits Insurance Act for an amount of money which is considered to be abnormal compared with what is considered normal for a single transaction for that type of business, then the corporation appeals to the Minister of Trade and Commerce, to the governor in council, for authorization by the governor in council to insure that extra large transaction for an extra long term.


Mr. Smith (Simcoe North):: Now that we have come to the third section of the proposed amendments I should like to direct two questions to the attention of the minister. Last Friday the hon. member for Leeds made two statements in speaking on this measure, and one of them got some small notice in the press. The first was that the function of this legislation has changed over a period of time from being primarily an insurance function to being primarily a banking function. The second statement was to the effect that we were now publicly subsidizing a financing operation.
I have read the act, together with the proposed amendments, with some care and it does not seem to me that the amendments in any way increased the lending function of the corporation. Further, neither in the original act nor in any subsequent amendment can I find any reference to any subsidy. I should like the minister to tell me, if he can, whether or not this is the case.


George Harris Hees: Yes, I am glad to answer those two questions. Whereas the function of the corporation has changed somewhat due to the addition of section 21(a), it is still primarily that of an insurance corporation with financing added by the section I have mentioned. However, I stress that the primary function of the corporation is insurance. For example, if this bill passes the house, and I hope it will, there will be $600 million devoted to the insurance function and $300 million to the financing function.
The hon. member also asked whether the operation of the corporation subsidized the Department of Finance or the government. The answer is that it does not. As I said in my opening remarks on Friday, these operations, whether they involve insurance or financing, cost the taxpayers of Canada not one penny. The premiums for insurance and the interest charges for financing are fixed as far as possible on a break even basis, the object being that the corporation should neither make nor lose money. Naturally, in the interest of the taxpayers we tend to be on the black side of the ledger and, if anything, there is a slight profit made. But, as I said in answer to a question asked earlier in this debate, the profit over the period since

Export Credits Insurance Act the corporation began operating 17 years ago amounts to only one fifth of 1 per cent. Thus I believe all hon. members will agree that the corporation operates on a break even basis and does not subsidize the government in any way.


Arthur Laing: I think the committee has benefited greatly tonight from the frank statement by the minister that this legislation is designed primarily to reach into foreign markets for Canadian goods in a strongly competitive world. I believe everyone agrees that the world today has come to a point where competition is extremely brutal. I was assured by a gentleman from Europe about a month ago that his firm had retained a bloc of business in Europe by investing in Florida real estate and owning several thousand bales of United States cotton. This sort of thing is increasing around the world and the minister is to be commended for pointing out to the committee that this is one of the techniques being used by foreign countries and now being adopted by ourselves to get Canadian goods into markets where they might not otherwise go.
I think, however, that the committee is entitled to have from the minister a series of answers to questions relating to the past experience to the corporation, because I note that the amendment provides for an extension into a number of activities not normally associated with a crown corporation or with this type of corporation.
I note that subsection (2) of section 21(a) empowers the corporation to lend money to an importer on the security of an instrument given by an importer in respect to an export transaction. It also extends to the corporation the right to purchase a guaranteed instrument or to lend money to the holder of a guaranteed instrument, or to sell to any person a guaranteed instrument. This means, I suggest to the minister, that the corporation is getting into that ancient but honest business of factoring, if I may use the term, and this is new to a corporation of this kind. I note that the powers given to the corporation in the past are not unlike those to which the amendment addresses itself, because formerly the corporation when authorized by the governor in council could guarantee by a proper endorsement or otherwise the payment of an instrument, or it could purchase a guaranteed instrument or lend money to the holder of such an instrument. I think the minister might well tell the committee what has been the experience in the past in this area of operations and I should also like to know where in the trading of these instruments he hopes the corporation will find a free and competitive market, because it would
fMr. Hees.]
seem to me they would be handled by banking institutions or discount houses rather than offered freely to the public. I am not suggesting that the corporation which trades in these instruments becomes the prisoner of the export credits corporation but I do fear a situation where, due to the unusual nature of the instrument, the corporation might become the prisoner of the two or three institutions who would trade in them.
Earlier, the minister replied to the hon. member for Rosedale and suggested that while the transactions had been carried out with banking institutions it might be the intention of the corporation to offer these instruments freely. I ask the hon. gentleman in connection with the items in the annual report listed under section 21(a) and involving, I think, the lending of some $41 million to four different countries, or corporations in those countries, if there is any experience in connection with the handling of these bonds or commitments by the countries concerned which he thinks would be profitable for the committee to know. I notice that the interest rate is listed at 6 per cent. Have these bonds been sold and if so were they sold at a discount?
I have listed a number of questions of the minister and I want to thank him for telling the committee tonight very frankly that this is a very competitive world and that this is one of the weapons we are using to fight it. The minister might also tell us the reason for the advance of the insurance rate under section 14 from 88 cents per $100 in 1954 to the average of this last year of about $1.35 per $100.


George Harris Hees: Mr. Chairman, in answer to the last question I am advised that the rate has gone down from 88 cents to less than 66 cents on the business done under section 14. I am advised that the hon. member for Vancouver South is referring to the business done under section 21, under which section the length of term of the transactions has been increasing. It has been necessary to allow this increase in the rate and the length of term in order to meet terms made available to their exporters by other governments. I do hope the hon. member understands what I mean. In reply to the question before that, the answer is that we have not sold any paper whatsoever. The reason why we ask for the right to adopt these new techniques of selling paper and of allowing loans to be made on paper which is bought is because this is the practice which has worked out well for the export-import bank of the United States and the export credits guarantee department of Great Britain. They have found that the techniques for which we are asking in this legislation have worked well for them. We have the same kind of operation here, and

are therefore asking parliament to give the Export Credits Insurance Corporation of Canada the right to operate in the same way.


Mr. Berger:: Mr. Chairman, this afternoon the minister assured the hon. member for Danforth that the proposed subsection (2) of section 21(a) empowered the corporation to lend money to the government of a foreign country. This, of course, was something that we were most anxious to know and delighted to hear; but in view of the fact that when section 21(a) was first brought into existence a year ago it contained a definition of "importer" which said that an importer means "a person carrying on business or other activities outside Canada", can the minister assure the house that he has been advised by those responsible for giving such opinion to the corporation and to his department that a government of a foreign country is included within the definition of "importer" contained in the act when it was amended last year? That is when section 21(a) was first inserted into the act. If the minister is able to assure us that that is so, then there can be no problem; but if he cannot, then an amendment might be required.


George Harris Hees: Mr. Chairman, as I mentioned earlier in this debate the importer may be either a private firm or a department of a foreign government. Does that answer the hon. member's question?


Thomas Rodney Berger: Well, Mr. Chairman, I and the other hon. members who sit in this corner would be most happy if we could be assured that a legal opinion had been given to the minister to the effect that section 21(a)(1)(c) of the Export Credits Insurance Act in fact included the government of a foreign nation within the meaning of "importer". Our concern is that the minister might find himself, after the legislation presently before the committee has gone through, in the position where he may be advised that the corporation in fact has no legal power to make a loan to the government of a foreign nation. Because paragraph (c) of the amendment brought into the act last year says that an importer means a person carrying on business or other activities outside Canada. For some of us it may seem unlikely that a person, as those words are used in the act, is meant to include the government of a foreign country. Some of us might be led to the view that the words "a person" were designed only to cover persons outside Canada wishing to purchase exports and wishing to obtain loans from Canada. That is the difficulty that some of us feel. We are not trying to hold matters up; we just want to make sure that the government has every legal power at its command to enable it to carry out the provisions of the act.
Export Credits Insurance Act


George Harris Hees: Mr. Chairman, I appreciate very much the concern of the hon. member about this matter, and I wish to assure him that the corporation has the right to deal directly with the government, and has been doing so during the past year. If he would look at the annual report of the Export Credits Insurance Corporation, page 13 lists a number of transactions carried out under section 21(a) in various countries. All of those transactions have either been carried out directly with the government of the country concerned or guaranteed by that government.


Mr. Carter:: Mr. Chairman, I should like to ask the minister two questions arising out of his reply to the question put by the hon. member for Simcoe North. If I understood the minister correctly, he said that the corporation conducted affairs in such a way as to stay in the black and not be a charge to the taxpayers. However, I also gathered that the operations were conducted so as not to make any exorbitant profit. My two questions are these. Does the corporation pay income tax and, if so, how much income tax was paid last year?


George Harris Hees: Mr. Chairman, the answer to the first question is yes, the corporation does pay income tax; and last year the corporation paid $740,427 in income tax.


Mr. Ryan:: Mr. Chairman, this would seem to be good legislation if wisely and efficiently administered, and in respect to administration I should like to ask the Minister of Trade and Commerce if under this third amendment the conditions of approval of an export contract have been determined as yet. That is, the conditions of the contract and approval of the contract. If so, are they analogous to the United States export-import bank requirements of which he spoke? If they are, where can we see the catalogue?


George Harris Hees: Mr. Chairman, if the hon. member had been in the committee last night he would not have asked the question, because I answered it then.


Sylvester Perry Ryan: I was here but that was in respect of the guarantees.


George Harris Hees: The requirements for eligibility for financing which I gave last night are set out in a pamphlet entitled "Government Export Financing" and also at page 16 of the pamphlet entitled, "Export Credits Insurance Corporation, What it is and How it Operates". In the first pamphlet "Eligibility for Financing" they are set out in this way:
The guiding rules that determine the eligibility of transactions for financing are:
1.	that the extended credit terms are clearly necessary and justifiable;

Farm Credit Act
2.	that the transaction gives promise of continuing export trade;
3.	that the Canadian content is of a high order, in the range of 80 per cent or better;
4.	that the transaction gives rise to significant employment and industrial benefits in Canada;
5.	that the export transaction is substantial in value;
6.	that the foreign buyer and the country of purchase have a satisfactory credit standing.


Sylvester Perry Ryan: In order to clear the situation up may I inquire whether these regulations apply to the third amendment similarly to the way in which he said they applied to the guarantees? Is that what I am given to understand?


George Harris Hees: Yes.
Clause 3 agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.


Hon. Alvin Hamilton (Minister of Agriculture) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Farm Credit Act to increase the capital of the Farm Credit Corporation from $12 million to $16 million so as to increase the lending capacity of the corporation from $300 million to $400 million and to provide further for certain changes in
connection with the administration of the act.
Motion agreed to and the house went into committee, Mr. Paul in the chair.


Francis Alvin George Hamilton: Mr. Chairman, since the amendments that are being proposed to the Farm Credit Act require the spending of money, it is necessary to have this resolution passed by the House of Commons before I bring the bill up for first reading. Under the rules I cannot refer to the details of the amendments but I am duty bound to the committee to explain why I am asking for this greater spending of public money.
It has been over 30 years since the federal government decided to provide long term loans to farmers. At that time there was a need and I submit that the need is even greater today. As evidence I should like to put on the record first the amounts of money that have been borrowed from 1929 up to the present time by the farmers from the farm loan board and the Farm Credit Corporation. I am going to have to ask permission, Mr. Chairman, to put these tables into Hansard.


Some hon. Members:: Agreed.


The Deputy Chairman:: Is it agreed?


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



FARM CREDIT CORPORATION

[Stage Direction]
Statement of Loans Disbursed and Outstanding by Fiscal Years to March 31, 1962
Cumulative total of	Principal of loans outstanding
Loans disbursed	loans disbursed	End of year
[Stage Direction]
 Average 

:- 
[Stage Direction]
Fiscal Year	No.	Amount	Loan	No.	Amount	No.	Amount$	$	$	$1929-30	
1,270	2,630,377	2,070	1,270	2,630,377	1,270	2,613,6711930-31	
2,102	3,517,489	1,670	3,372	6,147,866	3,109	6,033,8051931-32	468	1,996,344	4,270	3,840	8,144,210	3,492	7,878,7411932-33	i	
655	1,276,114	1,950	4,495	9,420,324	4,394	8,927,9851933-34	
307	558,630	1,820	4,802	9,978,954	4,652	9,125,5131934-35	
352	547,207	1,550	5,154	10,526,161	4,866	9,332,3291935-36	
3,593	7,423,779	2,070	8,747	17,949,940	8,322	16,178,5161936-37	
5,385	11,074,156	2,060	14,132	29,024,096	13,588	26,506,3081937-38	
2,523	5,264,308	2,080	16,655	34,288,404	15,829	30,336,7491938-39	
2,232	4,338,843	1,940	18,887	38,627,247	17,747	33,065,4701939-40	
2,361	4,342,662	1,830	21,248	42,969,909	19,756	35,411,7291940-41	
1,425	2,727,507	1,920	22,673	45,697,416	20,782	35,947,8831941-42	
1,112	2,133,514	1,920	23,785	47,830,930	21,333	35,256,1881942-43	
642	1,320,256	2,060	24,427	49,151,186	21,020	33,120,4841943-44	
590	1,336,103	2,260	25,017	50,487,289	19,447	28,716,6961944-45	
695	1,661,410	2,390	25,712	52,148,699	16,929	24,199,3881945-46	
877	2,121,207	2,420	26,589	54,269,906	15,721	22,513,8631946-47	
1,286	3,273,811	2,520	27,875	57,543,717	15,032	22,119,0051947-48	
1,218	3,185,240	2,620	29,093	60,728,957	14,790	22,327,2581948-49	4,595,036	2,620	30,844	65,323,993	15,006	' 23,890,3891949-50	
1,841	4,942,930	2,680	32,685	70,266,923	15,566	25,821,4261950-51	
1,800	4,693,079	2,600	34,485	74,960,002	16,184	27,802,7741951-52	
1,508	4,469,091	2,970	35,993	79,429,093	16,497	29,238,8101952-53	
1,514	5,118,559	3,380	37,507	84,547,652	16,667	31,005,2501953-54	
1,908	7,000,540	3,670	39,415	91,548,192	17,267	34,591,6451954-55	
2,137	8,207,003	3,840	41,552	99,755,195	18,111	39,455,9311955-56	
2,087	8,254,323	3,960	43,639	108,009,518	18,931	44,075,2681956-57	
2,826	12,183,992	4,300	46,465	121,193,510	20,372	52,730,1981957-58	
3,500	19,343,560	5,540	49,965	140,537,070	22,494	67,112,2061958-59	
4,659	28,368,265	6,080	54,624	168,905,335	25,471	89,301,0221959-60	
5,169	35,840,882	6,950	59,793	204,746,217	28,453	117,233,2471960-61	
5,162	52,305,266	10,120	64,955	257,051,483	31,054	158,447,3921961-62	
6,027	68,886,875	11,400	70,892	325,938,358	34,175	212,138,3071962-63	
80,000,000 (estimated)
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[Stage Direction]

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Farm Credit Act
[Stage Direction]
Farm Credit Act
I am not going to read all the figures in this rather lengthy table. However, it is a record of the loans disbursed and outstanding by fiscal years to March 31, 1962. When hon. members see this table they will note that the loans have risen from the amount of roughly $2 million or $3 million a year in the early stages to $68 million or nearly $69 million last year and the figure will be even higher this year. 1 submit that this growing demand for long term loans by the farmers of Canada is evidence as to why the capacity of the board to loan money under this act has to be extended.
Second, I should like to put on Hansard the amount of loans under the Farm Improvement Loans Act in the past few years. This act is under the Department of Finance as hon. members know. It is carried out by the private banks under guarantee from the government. The interest rate is the same, namely 5 per cent. If I am allowed to put these figures on the record, it will give to hon. members information to show how the intermediate type of credit is being handled by the Farm Improvement Loans Act.
Rémi Paul: Is it agreed?


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

FARM IMPROVEMENT LOANS ACT Summary of Loans Classified by Purposes
1961	1960	Total 1945-1961No.	Amount	No.	Amount	No. AmountS	$	$Purchase of agricultural implements	50,483	76,486,097	52,811	79,942,352	779,482	943,550,919Construction, repair or alteration of or making additions to any building or structure on a farm	7,080	15,410,464	5,196	10,064,430	59,341	90,606,743Purchase of livestock	9,547	12,675,959	7,744	9,624,919	62,416	64,054,750Works for the improvement or development of a farm designated in the regulations 	2,545	2,234,332	1,558	1,312,991	24,240	16,753,231Irrigation system	242	466,494	152	277,889	829	1,471,781Purchase or installation of agricultural equipment of farm electrical system and the alteration and improvement of a farm electrical system	499	664,033	404	470,996	5,539	4,192,744Erection or construction of fencing or works for drainage on a farm	219	209,786	176	162,169	1,627	1,299,359TOTAL	70,615	108,147,165	68,041	101,855,746	933,474	1,121,929,527
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Mr. Argue:: I wonder whether the minister, as he goes on, will give us the highlights of the figures that have now been placed on the table?


Francis Alvin George Hamilton: Yes, I think that would be sensible. The figures I gave in the last table show annual loans ranging from $2 million to roughly $69 million. The figures I am quoting now are figures for the last few years under the Farm Improvement Loans Act of $108 million and $101 million for the last two years respectively. The total amount of loans under this act in the 17 years of its existence is roughly $1.1 billion or an average of $66 million a year. Hon. members can therefore see the extent of the demand by farmers for medium or intermediate term loans.
Third, farmers get money from private banks for short term operational credit. The extent of this can be gauged by the figures I have here from the private banks that compare the amount outstanding from ordinary loans for agricultural purposes by the private banks and the Farm Improvement Loans Act. This table is given in the form of outstanding loans and is cumulative. The figures for the ordinary type of loans by private banks for agricultural purposes are these: 1957, $223 million; 1958, $228 million; 1959, $229 million, 1960, $241 million and 1961, $290 million. On the table you will find the comparable amounts under the Farm Improvement Loans Act which show the same ascending scale, even if the amounts in millions outstanding at any one time are not quite the same. May I have permission to put this on the record too, Mr. Chairman?


Rémi Paul: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: The table above referred to is as follows;3
Statement of outstanding bank loans made for agricultural purposes as at December 31 each year
December 31	Ordinary Loans Millions	F.I.L.A. Millions1957 	
223.7	125.41958 	
228.5	139.31959 	
229.3	160.21960 	
241.5	178.11961 	
290.7	194.3
Note: Figures are not available from banks on amounts loaned each year for agricultural production purposes.
In 1958, Mr. Chairman, the Prime Minister outlined the national agricultural program, which was an attack on the fundamental weaknesses of agriculture. One of the points in this program was the Farm Credit Act. When the Farm Credit Corporation was established in 1959 its capital was set at $8 million, which authorized it to borrow up to $200 million from the Minister of Finance. In 1961 the capital was increased to $12 [The Deputy Chairman.]

million and now, just after the third anniversary of the formation of the corporation, it has been found necessary to increase the capital to $16 million, thus authorizing the Minister of Finance to advance up to $400 million to the corporation.
Canadian farmers quickly recognized that they could, individually, make tremendous improvements to their standard of living by using the credit provided by this government to reorganize their farms on a more profitable basis. I believe the need for this additional capital can best be demonstrated by referring briefly to the large and expanding volume of loans made by the Farm Credit Corporation, which I view as tangible evidence of the success of this legislation.
In a moment, Mr. Chairman, I am going to ask for permission to put a fourth table on Hansard. This table is a statement by provinces of farm loans approved by the Farm Credit Corporation. The reason for putting it on Hansard is so that members can examine this record and see in which provinces the legislation seems to be working the best and also at the same time and by the same logic see in which areas the legislation does not appear to be working as well. It must be kept in mind that each member should apply to this table the number of farmers in each province so that he can form some sort of estimate of how farmers are using the credit provided by the federal government.
A second factor that should be kept in mind by an hon. member as he studies this table, which gives figures of the loans province by province, is what type of provincial legislation is in existence and operation. For instance, in the province of Quebec there is provincial legislation under which money is lent at a much lower rate than the Farm Credit Corporation lends money. Hon. members will notice the sudden increase in loans in that province last year and this is because of the fact that the province of Quebec is now paying half the interest on federal loans. In other words, if a Quebec farmer takes out a loan from the Farm Credit Corporation, which is a federal institution, the provincial government then comes in and pays 2| per cent of the interest on that loan up to a certain amount. This, of course, is probably the biggest reason why there was this increase last year in these loans in the province of Quebec. I should now like to put this table on the record. I do not think any particular purpose would be served by going through all the provinces. From a quick glance at the table it will be seen that the five western provinces seem to be making very wide use of this legislation.


Rémi Paul: Is it agreed?


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



[Stage Direction]
Statement by Provinces or Farm Loans Approved during Fiscal Years
April 1,1957 to March 31, 1958	April 1, 1958 to March 31, 1959	April 1,1959 to March 31, 1960	April 1, 1960 to March 31, 1961	April 1, 1961 to March 31, 1962	April 1,1962 to Sept. 30, 1962	Province	Number of loans	Amount approved	Number of loans	Amount approved	Number of loans	Amount approved	Number of loans	Amount approved	Number of loans	Amount approved	Number of loans	Amount approved$	$	$	$	$	$British Columbia	113	735,350	157	1,163,800	158	1,443,900	203	3,002,800	244	4,051,500	171	2,779,700Alberta	590	2,841,500	961	5,125,100	1,421	9,024,800	1,217	13,182,600	1,518	18,447,600	1,266	16,586,500Saskatchewan...	1,122	5,760,900	1,510	8,665,550	1,739	12,582,600	2,008	19,014,550	1,936	19,812,350	1,335	14,461,500Manitoba	412	2,133,100	454	2,505,600	251	1,498,750	317	3,481,300	429	5,024,000	347	3,937,500Ontario	1,084	7,980,500	1,299	10,702,350	1,384	13,164,750	1,590	19,151,700	1,383	17,104,400	956	12,567,500Quebec	118	667,250	154	891,650	179	1,286,450	106	1,646,550	109	1,786,100	262	4,086,100New Brunswick.	67	325,150	71	303,650	39	250,350	46	362,050	111	1,109,700	63	777,400Nova Scotia	54	290,500	49	219,450	43	260,700	20	264,500	41	499,900	40	465,700Prince Edward Island	142	544,200	150	567,800	125	518,950	90	598,000	113	733,200	74	554,400Newfoundland...	1	6,100	1	20,0003,702	21,278,450	4,805	30,144,950	5,339	40,031,250	5,597	60,704,050	5,885	68,574,850	4,515	56,236,300
* During this fiscal year to September 30,1962, 4,515 loans have been approved for a total of $56,236,300 as compared to 4,002 loans for a total of $46,063,400 during the same period last year. During the past five and one half years the Farm Credit Corporation and its predecessor, the Canadian farm loan board, approved 29,843 loans for a total of $276,969,850.
[Stage Direction]


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[Stage Direction]
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Finally, Mr. Chairman, most hon. members have received by this time, I believe, the report of the Farm Credit Corporation in English and in French, and on page 10 of the report there is a chart which I should like to have incorporated in Hansard because in a very dramatic way, along with the tables, it
gives a pictorial presentation of the tremendous increase in borrowing by farmers in the last five years.
Rémi Paul: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: The chart above referred to is as follows :]
65 H 60 55 50 45
-	40
-	35 30
-	25
-	20 [DOT] 15
h 5



TOTAL ANNUAL LOAN DISBURSEMENTS IN MILLIONS OF DOLLARS 20-YEAR TREND

[Stage Direction]
***llllllllll
42 '43 '44 '45	'46	'47	'48	'49	1950 '51	*52	[DOT]53	'54	[DOT]55	1 ** 1	'57	[DOT]58	'59 1960 61	M3	CO O f-	[DOT]-1	o	M3	O	Ch	O'	o	CO	CO	CM	o	in	CM	vO	iniT)	0 - 0	*-H	o-	CO	CO	r-	O'	iD	[DOT]^r	o	CM	O'	vD	v£>	CO	M3	r~-CNI	-H ^ CM	00	CM	o	o	o	o	in	in	o	CO	O'	in	CM	00	CM	COO	M3 - -	CO	lO	in	CM	CO	O'	CO	o	r-	CO	CO	ao	o	in	M3CM	CO M3 CM	00	(T'	o-	O'	M3	r-i	o	o	iT>	co	M3	o	00CD	CO vO *-'	CM	1 1	in	Cfc	M3	o	CM	CM	*-	CO	CO	00	CO	00r-H	- -1 CM	CO	CO	O'	in	r-	CO	CO	CM	O'	00 CM	in CO	CM in	CO M3
Francis Alvin George Hamilton: Thank you very much, Mr. Chairman, and through you, of course, the members of the committee. There has been an increase in lending each year, which can be followed from the chart, from an annual total of about $12 million in 1956 to almost $69 million in 1961. During the current year there is a further increase in loans of about 22 per cent and the volume of loans is expected to exceed $80 million by the end of the year. I would suggest that is a considerable record.
[The Deputy Chairman.]
Although I am sure no one can seriously question the success of our credit program, the government has been examining the legislation to see if the Farm Credit Corporation can play a larger role in our rapidly developing agricultural program. It will be recalled that when the Farm Credit Act was being considered in committee on June 29, 1959 it was stated, as found in Hansard, page 5256, that this government would be prepared to modify the credit program established under the new

act if experience showed that this was necessary for the improvement of farm family living, farm operating and farm purchase. The bill now being proposed is intended to fulfil that undertaking.
Some of the proposals which are advanced in this bill are intended to correct some minor anomalies in the act and to remove some restrictions which have been found by experience to be unnecessary. There are other proposals, however, which are more fundamental in nature. For example, an examination of the loans made in each of the areas in Canada will reveal in general a very good record but there are areas which in my opinion are not making full use of this very fine legislation. I refer to some of the eastern counties of Ontario, the provinces of Quebec and British Columbia and the Atlantic provinces. Some of these amendments are therefore intended to broaden the credit program so that farmers will have greater latitude in the use of the money they borrow.
Amendments are proposed which will permit the corporation to lend money, for example, to make improvements to any part of the land the farmer is operating including land, such as that on long term lease, which is not covered by the mortgage to the corporation. Another amendment will permit the corporation to lend money to pay the farmer's operating and living costs during the early period of his loan while he is developing his farm to a self-supporting level or during a transitional period when he is changing from one type of enterprise to another and temporarily has very little farm income.
It will interest many members to know that these amendments are planned to help the farmer to develop non-agricultural enterprises on his farm, such as camping grounds, tourist cabins or cottages and so on, if he can make more profitable use of his land resources in this way. These latter proposals obviously broaden the role of the Farm Credit Corporation in the field of agricultural adjustment. They will make it possible for the corporation to provide much greater support to our program of agricultural rehabilitation and development. This bill, together with amendments to farm credit regulations which are at present under consideration, will open the door for closer co-ordination of the Farm Credit Corporation and the ARDA administration and will mark a new milestone in our attack upon the problem of the low income of an important segment of our farming population.
Mr. Chairman, I commend this legislation to the committee.


Hazen Robert Argue: Mr. Chairman, we have listened with interest to the remarks of the Minister
Farm Credit Act
of Agriculture and his discussion of the proposed amendments that will be put forward in the bill which will follow this resolution. I am pleased that this measure is before the house at this time because it gives all members an opportunity to put before the government their own views, the views of the party to which they belong, and the views of the people in the country as those views have been brought to their attention.
Credit is important to the agriculture industry of this country, and it is of increasing importance. The fact that we are considering at this time a further amendment to the present legislation is an indication that this is so. The farmers need some new methods, some new policies, to increase their income. They need these policies today even more than they needed them a few years ago. In spite of all the flowery language that is used by the Minister of Agriculture-


An hon. Member:: He did not use any.


Hazen Robert Argue: -in talking about ARDA and about the Prime Minister's announced program in 1958, the fact is that under this administration the relative position of the farmers of this country has steadily gone down. The net income position of the farmer has steadily worsened. I have in my hand a statement taken from the brief presented by the Canadian Federation of Agriculture to the royal commission on banking just a few days ago. It says this, in part, on page 8:
-the farmer's position has declined, both absolutely and relatively, since let us say 1949 ... aggregate net farm income today is running at lower levels than those of 6, 12 or 15 years ago.


An hon. Member:: What is your authority?


Hazen Robert Argue: An hon. member says, what is the authority? I give him as my authority the dominion bureau of statistics. I give him as my authority the net income set out by the dominion bureau of statistics for 1961 for farmers as $1,033,675,000, which is the lowest net income of any year since 1954. If you take out the income for the year 1954, it is the lowest net income of the farmers since 1945. There is not, therefore, too much for the government to brag about in so far as the net income position of the farmers is concerned. It has steadily worsened under this administration.


An hon. Member:: You ask the farmers.


Hazen Robert Argue: The farmers of this country need additional credit. The history of farming is that most farmers, when they are young men, buy a farm and go heavily into debt. It takes most of a working lifetime to retire that debt. As the minister has said, and said correctly tonight, part of the reason that the farmer can, at times, increase his income is

Farm Credit Act
the availability of credit, and that credit is needed. The total investment in the agriculture industry of our country is some $11 billion. The total outstanding credit, bank credit, credit from the Farm Credit Corporation, credit from credit unions, obtained by the agriculture industry is just over $880 million. This means that the farmers have only some 8 per cent of their assets in outstanding indebtedness. In other words, the agriculture industry is in a position to bear the burden of increased credit in order to improve the efficiency of its operation.
Let no one think that the farmer is not a good risk. I do not say anybody in this chamber thinks the farmer is not a good risk.


An hon. Member:: That is good.


Hazen Robert Argue: But the record of farmer payments under the Farm Credit Corporation, shows that the agriculture producers of this country are amongst Canada's very best businessmen.


Mr. Bigg:: They are now.


Hazen Robert Argue: I do not know why, Mr. Chairman, I should be heckled when I am saying some very factual things, some very complimentary things about the farmers of this country.


Some hon. Members:: Order.


Mr. Caron:: Laugh at the farmers.


Mr. Robichaud:: That's right, laugh.


Rémi Paul: Order; I would be interested in hearing the hon. member for Assiniboia. Please give me a chance.


Hazen Robert Argue: I thank you, Mr. Chairman, for your very kind remark. I had the good fortune for a few years to have an office very close to yours in this building. I found you a very congenial member, a very fair member, and I congratulate you on receiving this appointment by this house.
If I may go on, Mr. Chairman-


Some hon. Members:: Order.


Hazen Robert Argue: The record of the Farm Improvement Loans Act carried on by the chartered banks of this country under guarantee from the federal government shows that losses were almost negligible. The record of loss over the years has been about one tenth of one per cent. If you go back to some of the early loans under this legislation, back to the early forties, the repayment record is in excess of 99.99 per cent. I point out to the minister, and to hon. members opposite, that the loans granted through the chartered banking system are, generally speaking, smaller than those granted by the Farm Credit Corporation. They are more widely dispersed.

They are loans to people who, some hon. members might think, are high risks. Yet, the repayment record is 99.99 per cent. I suggest to the government and to the minister, therefore, as well as to the officials who administer this act, that they should be thinking a great deal more of promoting and providing loans for smaller farmers, for low income farmers, for farmers who need loans to the greatest extent. The farmer will repay his loan because the record of repayment is there.
There are some losses under the act, it is true. However, these losses have been almost negligible. What is the record of this corporation? Well, Mr. Chairman, the record of this corporation, the record of the Canadian farm loan board, its predecessor, generally speaking is a good record. As far as they have gone, the loans that have been made have been put to good use and the repayments have been good.
The minister said there are going to be amendments to the act and he outlined a few of them. We are going to be interested to see those amendments. The minister went on to tell us something of the record of loans in the various provinces of this country. He said, and I do not argue with this, that in the four western provinces, relative to the other provinces there has been a great deal of activity by the Farm Credit Corporation; somewhat less activity in Ontario, but more activity than in some other provinces. Hon. members from Ontario will be putting forth in this debate some of the things they are asking for. The record of the number of loans in the province of Quebec is exceedingly low, it is exceedingly low for all the years under the Farm Credit Corporation legislation.


Mr. Chalierton:: How about this year?


Hazen Robert Argue: It is even very low for the year that has just ended, being 109 loans, according to the annual report.


George Louis Chatterton: How about 1962?


Hazen Robert Argue: The figures are, 118 in 1957-58; 154 in 1958-59; 179 in 1959-60; 106 in 196061 and 109 in 1961-62.


George Louis Chatterton: How about 1962?


Hazen Robert Argue: There were 109 in the province of Quebec, 1,383 in the province of Ontario, 1,936 in Saskatchewan, 1,518 in Alberta and 244 in British Columbia.


George Louis Chatterton: Mr. Chairman, would the hon. member permit a question?


Hazen Robert Argue: There is a great field for increased activity in the province of Quebec-


George Louis Chatterton: Would the hon. member permit a question?


Hazen Robert Argue: -and hon. members from that province will be pointing out to the minister what should be done.


George Louis Chatterton: Would the hon. member permit a question? Quoting the statistics on the number of loans in Quebec, he stopped at the end of 1961. Would the hon. member quote the number of loans in Quebec in 1962?


Hazen Robert Argue: The loans for 1961-62, up to March 31, 1962, were 109.


George Louis Chatterton: Subsequent to that?


Hazen Robert Argue: Well, we are just in that year. If my hon. friend is a crystal gazer-


George Louis Chatterton: It is 300.


Hazen Robert Argue: -he can gaze in his crystal or he can ask the Minister of Agriculture. But I have the latest figures given to me. If the minister has received ones that are a kind of a day-to-day run down on what the loans are, we shall be glad to hear them.


George Louis Chatterton: Why don't you keep up to date?


An hon. Member:: Ask Caouette; he'll tell you.


Hazen Robert Argue: In the province of New Brunswick the record is poor, 111 loans last year; in Nova Scotia the record is even worse, 41 loans; Prince Edward Island, a smaller province, a bit better, 113 loans. The record in Newfoundland is there, but it is not too good; one loan in that province in 1961.


Mr. Bell (Saint John-Albert):: That was
Joey.


Hazen Robert Argue: Was the minister not correct when he^aid there could be more activity in the eastern provinces and the Atlantic provinces? This legislation has been a relative failure in the Atlantic provinces. This is a place where the minister should be doing a lot more and the legislation should be used a great deal more; it should be promoted by the administration in the years ahead.
Mr. Chairman, the minister gave us some basis for comparison. In making his presentation to the house the minister referred to the Farm Improvement Loans Act. He also referred to the chartered banks. He said that in two years-I . believe this was the figure- the amount was $108 million in one year and $101 million in total loans the next year. What were the total loans? The total loans under the Farm Credit Corporation for the year just ended amounted to 5,885. Under the Farm Improvement Loans Act the total number of loans amounted to 68,041. The chartered banks, through their system of loans, have made more than ten times as many loans as have been made by the Farm Credit Corporation. Therefore the record of
Farm Credit Act
the corporation is one of improvement, one of an increased number of loans, but it is slow; there are not as many as there should be; it is not going fast enough. Therefore I would suggest there is room here for a great expansion.
Mr. Chairman, I said there should be greater encouragement, greater emphasis on loans being made to the smaller farmers, to the low income farmers. In 1957-58 there were 3,702 loans made, in total; in 1961-62 the total number of loans was up to 5,885, an increase of some 57 per cent. In size of loan this had more than doubled. In other words, as the time has gone on there has been an increasing emphasis on larger loans and, within that context, lesser emphasis on the smaller loans. I am not complaining that these larger loans were made. There may be even a place for still larger loans for certain individuals, perhaps larger loans than are provided for by the ceiling of this legislation. But even if those who requested larger loans received them and needed them and put them to good use, in my judgment there is no reason for such a small proportion of the business of the corporation being in the field of the smaller loan to the smaller farmer.
Why has this come about? The minister brags about increased activity. When this legislation was before the house at an earlier period, this government said it was going to do something for the small farmer. They have been crying in this house for years on behalf of the small farmer. What have they done? The farm loans board had an assessment fee, an appraisal fee of $10. That was the barrier or the deterrent between a farmer wanting to apply for a loan and having his farm, or prospective farm, appraised-a $10 fee. But it was this government who, to help the small farmer, increased the $10 fee to $50, and there is now a $50 barrier to a small farmer getting a loan, because the appraisal fee has been increased to $50. If a farmer comes in and says "I would like a loan", they say, "well, it will cost you $50 to have your farm appraised. If it does not go through, you will lose your $50." They tell him in advance, very likely-and this has happened, I am sure, in thousands of cases -"Well, there is probably no use your applying for a loan. You cannot get a loan any way". They point to statistics to show that in connection with those who applied for a loan, who put down the $50, the record is not bad. But what of the hundreds, yes thousands of farmers, who were told, "Don't you even try, because there is no point in your trying. You will not get a loan even if you do try".
According to the report we have received 14,517 people who have gone into Farm

Farm Credit Act
Credit Corporation offices have been so serious in discussing a possible loan that personnel of the Farm Credit Corporation took a statement from them. It was a detailed statement, a comprehensive statement; they were asked a lot of questions. How many of those farmers who applied or who went in and talked about a loan and made a statement actually obtained a loan? Of 14,517 interviews during which a record was made -not just a casual interview but an actual discussion with a record kept-only 5,885 were granted loans.


Mr. Pugh:: Over what period of time?


Hazen Robert Argue: In this past year; the record in one year.


David Vaughan Pugh: One year?


Hazen Robert Argue: One year. In one year 55 per cent were rejected; 55 per cent did not get anything. I suggest to hon. members opposite -and I know what a number of them want because I have been talking to them personally; they are interested in seeing this program expanded-that a 55 per cent rejection is too high, there is something wrong, and whatever is wrong should be corrected. I do not think it is too hard to find out what is wrong. The mistake was made when this legislation was brought in by the present government in 1959. It is a mistake which has been continued, and it is a mistake which has been set forth in black and white. Let no one misunderstand it. I have in my hand a document called "Farm Credit Corporation Lending Policy for 1961". On page 1, this is what it says in part:
While not explicitly stated, this thinking is implied in the legislation and in the regulations made under it, and was very well expressed by the Minister of Agriculture when he defined the object of the legislation as follows:
This is the object-this is in quotation marks:
"To assist Canadian farmers in the voluntary reorganization of their industry into economic family farm units, each of which will be of sufficient size to produce, under the operation of the owner, the farm income necessary to meet all operating and maintenance costs, provide an adequate livelihood for the owner-operator and his dependents, and retire any required credit, with interest, within an appropriate term."
Here is what they say to the farmer: When you receive this loan, will you be in possession of an economic family farm unit of a sufficient size to produce an income for the family, to provide an adequate livelihood and to retire your debt with interest? This means that if a small farmer comes in and asks for a small loan the people administering this legislation say: will this small loan which the farmer is requesting, together with the property he now has, make his farm into an

economic unit so that he can have a good standard of living and retire his debts? Often they say: no, it is not enough-which is probably true-and instead of providing this small farmer with a relatively small loan to improve his position they say: until you get a bigger farm so that you can take a bigger loan we shall not give you anything at all. That is the policy. That is the basis upon which the whole thing is done. So a farmer in the Gatineau valley asks for a loan, and they say: "Well, you did not make much money last year and you do not have much property. You only want a small loan. We shall not give you one; you are a poor risk". That is the attitude. That must be the reason. I do not know any other. Yet the record of repayment shows that the small farmer as well as the large farmer has an excellent credit record, and the corporation has lost practically no money in the period of its operations.
The annual report was given to us a little while ago, and what did it say about losses? Well, the farmers did not pay some money, so they had to write off loans of- how much?-of $12,496 in one year, with well over $200 million outstanding. Still, there was a loss of $978,915. Why? Because this government has brought interest rates so high that the corporation cannot operate without losses on the basis of a 5 per cent interest charge. The farmers have been a good risk. The farmers have paid their debts. But the government, through its failures, is responsible for the high interest rates in the country. I do not hold the Minister of Agriculture individually responsible for this; he does not always agree with his colleagues in many important ways. However, the losses have occurred not because the farmers were poor risks but because this government was a poor risk.
I have outlined what they say to a farmer when he comes in for a loan, and I have done so on the basis of the minister's own statement. If that needs underlining-and I really do not see why it should-all one needs to do is to quote from the farm credit regulations themselves. This is what they say:
12(1). No loan shall be made on the security of farm land that is not part of a farm unit of sufficient size to produce, under the operation of the applicant, crops and fodder which, whether fed to livestock with or without normal purchased feed supplements-
It does not matter if he purchases a lot of western feed grain; that is not taken into account.
-marketed directly or both, will produce revenue sufficient to

(i)	pay the cost of operating and maintenance of the farm unit,
(ii)	provide a livelihood for the applicant-
Then, when a farmer comes in and has a talk with them, before they take his $50, they have a report made out and there is a question asked there of the officer of the corporation: "Does it appear the enterprise will qualify under regulation 12(1)?" That is the regulation I have just quoted. Thus, by arbitrary action, as stated by the minister and by the regulations themselves, a large proportion of the agricultural producers of this country are barred from deriving any benefit whatsoever under this legislation, and the proportion barred is relatively higher in the eastern provinces.
What kind of regulations should there be? I will suggest some changes in this regard to the minister, if I may. I would suggest that instead of the statement which the hon. gentleman himself has used it should read something like this: "This money shall be such as to aid farmers in the voluntary reorganization of their industry into more economic family farm units, each of which, under the operation of the owner, will meet all operation and maintenance costs, retire any credit with interest within an appropriate term and, with the credit obtained from the corporation, provide a more adequate livelihood for the owner operator and his dependents. In other words, will the loan improve the farmer's position-not whether it will make up an economic unit. This is the basis upon which we suggest, from this side, the whole act should be operated. The test should be: will it help an individual applicant to improve his position, not whether it would give him an economic unit. I say this because how can a small farmer ever get an economic unit if he is not to be allowed the credit in stages which would help him to improve his business?
I would like to suggest, now, on behalf of the official opposition that this legislation should be referred to the standing committee on agriculture and colonization. The minister brags about this legislation. That is fine. Let us have the committee meet; let us have the officials from the department come before the committee. Let us hear evidence from the minister. Let the officials deal with some of the statements which have been made this afternoon and let us see how, together, we as members of parliament on this committee can make suggestions to improve the operation of this act. We should like to have the agricultural committee meet to consider certain suggestions and proposals. These would be designed to increase the number
Farm Credit Act
of loans in all parts of Canada with particular emphasis on increasing the number of loans in those areas where they are in relatively small numbers at the present time. We should also consider what further action is required both by regulation and by administrative decision to make more loans available to low income farmers.
We would suggest that there should be amendments to the legislation and to the regulations to make it possible to lend money on a poultry operation as well as a livestock operation. We would suggest to the minister that the definition of "livestock" should be extended to include not only cattle, sheep and hogs but also horses. I do not see any reason why a farmer who raises horses for the ranching country and for use in the farming industry should be barred from getting credit for this part of his operations. In other words, the scope of the act should be extended to provide a broader definition of the word "livestock" and also to include poultry enterprises within the farming operation. We would ask that consideration be given either to the complete removal of the $50 deterrent or to a very substantial reduction in this deterrent. A $50 bar is a substantial one which should not stand in the Way of small income earners who are obtaining a loan. We would also suggest that under this legislation consideration should be given to providing loans for farm housing on the security of the house, and a very small amount of property immediately surrounding the house, and that the farmer should not be required to tie up his whole operation in order to get decent living quarters for his family or his hirelings.


Gordon Campbell Chown: Order. I am sorry to interrupt the hon. member but his time has expired.


Francis Alvin George Hamilton: Mr. Chairman, I should like to ask a question of the hon. member, but before doing so I would request the committee to allow him to finish.


Gordon Campbell Chown: I am sorry to interject again, but the hon. member's time having expired I require unanimous consent on the part of the committee. Is it agreed?


Some hon. Members:: Agreed.


Hazen Robert Argue: Mr. Chairman, I have just a few more suggestions to make. The minister said in his statement that consideration should be given to working this legislation in with the ARDA program. It might have been the case that certain amendments would be necessary to provide moneys to producers on a group basis who wished to take part in any ARDA program. I would have put much greater emphasis on this a few days ago, but after the announcement of the minister that

Farm Credit Act
the ARDA program is going to be composed of a number of pilot projects and research over a three year period, the need for this kind of proposal may not be as great as I had anticipated. Another suggestion we would make is that consideration be given under this legislation, or by some other action if it seemed more appropriate, to provide emergency or disaster loans to agricultural producers who suffered tremendous losses because of storms, floods, or other acts of God. There was a tremendous storm on the coast of British Columbia recently, and this merely suggests that this kind of . proposal has great merit. It is not crop insurance. It does not go that far; it is a moderate suggestion. It is asking for just this, that farmers who suffer tremendous losses and who lose a large part of their assets because of an act of nature should be eligible for an emergency or disaster loan without interest for a period of time until they have had some time to rehabilitate their business. We further suggest that under this act there should be further emphasis on research and an expansion of the work of this corporation.
Lastly, Mr. Chairman, we would suggest that the amount involved at this time, even under the minister's own terms, does not seem to be a sufficient amount of money except for a brief period of time. This measure means an increase in available funds of $100 million. The minister said that he hopes this year that there may be loans totalling $80 million, and it would seem to me to be a great encouragement to the Farm Credit Corporation if we were to provide sufficient funds for a two year or a three year operation so that their funds would not be of an order which would last probably for only 16 or 18 months. Mr. Chairman, no matter where hon. members sit in this house, no matter to which party hon. members may belong, I believe the members who represent agricultural communities are interested in this legislation and would like to see improvements made. We suggest to the Minister of Agriculture and to this committee that this legislation should be referred to the committee on agriculture, where the important proposals that we have put forward may be considered, and we express the hope that these recommendations will be brought back from the committee and put in legislative form.


Francis Alvin George Hamilton: Mr. Chairman, one of the reasons why I was going to ask the committee for unanimous permission to extend the time of the hon. member for Assiniboia was to give me the right to ask this question. I wonder if the hon. member would confirm for me what I understood from his statement,

namely that he is now the official spokesman for agriculture of the official opposition?


Hazen Robert Argue: Mr. Chairman, I do not know why the Minister of Agriculture should wish to give me all this prominence and publicity by asking that question; I do not know what it does for him, I am sure. All I can say to the Minister of Agriculture is that I have put forward on behalf of the Liberal party some suggestions that he would be very wise to consider in the interests of this country.


Robert Norman Thompson: Mr. Chairman, I think that the hon. member for Assiniboia should be congratulated for covering the complete scope of the Farm Credit Corporation. In fact, from the familiar way he speaks about it, I have almost come to the conclusion that he himself must be one of the 55 per cent who have tried to get a loan.


Hazen Robert Argue: I think I should rise on a point of order. The hon. member well knows that members of parliament are not entitled to loans, and I am sure none of us has ever tried to get one.


Robert Norman Thompson: That does not bar one from trying.


Hazen Robert Argue: Well, I have never tried; I have never even inquired.


Robert Norman Thompson: Nevertheless, the suggestion that this legislation should go before the agricultural committee is a good one, I think, as far as discussion is concerned, but I hardly see the need for that after having listened to this very eloquent discourse; and with all the propositions which have been put up, we should be able to get on with the legislation very quickly and probably manage to get through with it in less time than the one we have just been dealing with.
I speak only generally tonight, because I think it would be fairer to the minister to hear some of the suggestions and the amendments which he has said are coming before we go into too much pre-judging or discussion, which will arise as we proceed with this matter. But in principle we agree with this legislation. I think any of us who are familiar with the workings of the Farm Credit Corporation believe that the corporation does good work. That does not necessarily mean that it is the ultimate as far as what can be done, but nevertheless, in principle we support this measure. Again, in this regard there is one thought which comes to mind which concerns the finance which is behind this type of corporation. If our financial system were rearranged so as to be more in tune with the times and the conditions of which we are a part, then I believe the capital for this type of credit, rather than

coming from tax capital, ought to be available from private investment capital because it is productive capital.
However, at this point it is not necessary to discuss this matter in detail. In the present situation the Farm Credit Act performs a very useful function. In the practical application of the act there is one weakness with which I am personally familiar and it is concerned with the determining of what is an economic farm unit. In this regard I agree entirely with the remarks made by the hon. member for Assiniboia as to the need of making this credit available to the smaller farmer.
I believe that the basic outworking of the act, whether or not that is the intention, has been to assist the farmer to become an economic unit and the basis of this has been to enlarge the farms. There are many ways in which a farm can be made an economic unit other than by just expanding the area. I believe that in this regard particularly careful consideration should be given. I am thinking of other matters such as land levelling, the construction of storage facilities on the farm, root cellars and other types of storage; land clearing, drainage from low lying areas; and also the necessary improvements so far as productive capacity on a farm is concerned.
I say this principally because we are very much concerned about what is happening to the family farm unit. Year by year the number of farm units gets smaller and smaller. In this regard it is a very interesting sidelight to observe that we are gradually approaching the stage of industrial farming, whereas those countries in the world which have tried collective farming on a large scale, which is actually industrial farming, are coming back again to the smaller farm unit.
I think we must understand the place the family farm unit has in the hard core life which we know in Canada. I think that everything we deal with in this House of Commons as it relates to agriculture should be considered with the thought in mind that we must assist and protect the family farm unit as it attempts to survive, rather than to eliminate more and more of them and thus increase the size of that farm unit. I am acquainted with farmers who have been required to buy additional land in order to qualify as an economic unit when actually perhaps that had not been their basic need, and when the money could just as profitably have been applied to improving the land they already held.
The increase in the number of credits granted under the Farm Credit Corporation is commendable. As we listen to some of the suggestions the minister has for us, I hope they
Farm Credit Act
will be aimed at reaching those areas, particularly here in the eastern part of the country, where the participation on the part of the farmer has not been as widespread as it is in the west. Again I think the factor to which I have just been referring is very important, namely the recognition of the potential of improving the smaller farm units. We shall not talk more in that regard now. Another point which I think the hon. member for Assiniboia has already made concerns the assessment fee which is required and which is now $50. If this legislation is getting at a root problem in agriculture, surely the department and the minister should be considering the need of eliminating this fee altogether in order to encourage as many farmers as possible to take part in the Farm Credit Corporation.
I agree that the need for this legislation is more urgent now than it has been in any of the years past. Again, the decrease in the aggregate farm income which is running at a lower level today than it has run for a number of years, is a satisfactory indicator that there is a real basic need for this type of legislation.
On behalf of those in this corner of the house, I wish to assure the minister and the house that we are dealing with a positive piece of legislation and there is a certain amount of urgency. Again I say that, in so far as the over-all financial picture in the country is concerned, we should get on with it as quickly as possible.


Herbert Wilfred Herridge: Mr. Chairman, I listened with interest to the minister's statement and as a result I am sure we all anticipate the bill and the revelations it will bring with respect to the proposed administrative changes.
I listened with interest to the hon. member for Assiniboia. While I agree with a great deal that he had to say, I am a bit under the impression that he is suffering from dyspepsia this evening. He referred to the minister's speech as flowery. I think that was really an exaggeration. Anyone who can call a succession of short statements linked together with statistics a flowery speech has rather an unusual understanding of the English language. I have a great respect for the minister, and I know of his wholehearted concern with this problem. However, he tread so softly across the grass of agricultural policy that I am almost reminded of Gray's "Elegy in a Country Churchyard".
The members of this group give their wholehearted support to this resolution. We recognize the value of the family unit in the maintenance of a democratic, diversified and sane society in Canada. I speak this evening as a countryman who has lived practically all his life in the country, and enjoyed it. I

Farm. Credit Act
would not live anywhere else if I could possibly help it. We recognize the need for this type of legislation in order to promote the development and improvement of the economic family farm unit. In recent years in some quarters we have heard a great deal, in some cases from agricultural economists, to the effect that the family farm is disappearing, that it is inefficient, that the countryside will soon be farmed by large corporate institutions and that the village hall, the village church and the village school will disappear. We in this group wholeheartedly disagree with that conception.


Mr. Kindt:: Will the hon. member name the economists who have said that?


Herbert Wilfred Herridge: No, I cannot remember the names of those economists. However, I remember reading several books which indicated that in the future farming would be undertaken in large units. I am sure the hon. gentleman has read some of that literature. I hope the hon. gentleman does not think I was referring to him just because I happened to look in that direction. He is guilty of many things in this house but I would never accuse him of that sort of thing. I am sure his heart is in the country.


An hon. Member:: What about the hon. member for Davenport?


Herbert Wilfred Herridge: 
An hon. Member:: Why?


Herbert Wilfred Herridge: Because Brigadier Rutherford is a farmer at heart. He has had experience. He knows what raising cattle is, he knows what tilling the land is and when it comes to farm questions there is nothing like experience to enable one to speak with some common sense and with some authority. His services in his work as director of the Farm Credit Corporation have been recognized by farmers organizations, by many farmers with whom I have had the opportunity to discuss the matter and by farm papers across Canada, and I think we should pay a tribute to the services of a very capable civil servant who served his country well. Although he is now retired as director, his services are still available in an advisory capacity. I want to say that he has been succeeded by a gentleman who is equally interested in this question and is carrying on in his spirit, with his purpose and in his footsteps.
We talk about the decline of agriculture and the declining rural population, and we are talking like that when the need for farm products is growing daily with the increase in population in the world and not only with respect to our home market but with respect to the large populations of the world who need our agricultural production. To support my argument I want to quote briefly from page 17 of the report of the resources for tomorrow conference held in Montreal from October 23 to 28, 1961. There is a lot of good material in these reports. The thesis to which I wish to refer is headed "Demand Outlook for Canadian Agriculture" and reads in part as follows:
In Canada, over the next 20 years, we foresee a doubling of meat consumption and a 70 per cent increase in the total physical volume of foods consumed. At the same time we foresee an 80 per cent increase in the world demand for food, primarily for staple cereals. Therefore, while Canadian wheat exports may face some difficulty in the next five to ten years, the long term outlook is more hopeful. Since growth in domestic demand will shift Canadian agriculture strongly toward a livestock economy, there should be no great problem apart from short run variations in finding export outlets for the limited supplies of coarse grains which
Farm Credit Act
are surplus to domestic requirements. Agriculture can therefore expect, in the longer run, to enjoy the almost forgotten privileges of an expanding industry.
There is no question that that statement is a sound analysis of the opportunities for marketing in the years ahead. I have a few suggestions to make on behalf of this group with respect to this legislation. First of all, let me say that while the legislation is sound I would say it is not quite all we think it should be from the point of view of making progress in agriculture and I want to make a few suggestions as to the necessary things that should be added. We believe that a constructive over-all agricultural policy must be devised as a result of co-operation between the federal and provincial governments. There can be more of that done at these dominion-provincial agricultural conferences. We believe in a policy that provides for the promotion of farming as a way of life for increasing numbers, not decreasing numbers, and for the development of the economic family farm, which we have dealt with on numerous occasions. An economic family farm varies according to geography, the type of soil the farmer is cultivating, the crop he is growing and the circumstances under which he is farming. It is a variable; it changes all the way from the large grain farms of the prairies to the five acres of cherries or peaches that are grown by the fruit farmers in my district and from which they receive a gross income of about $6,000. This can be established very easily indeed.
Then, I believe there is another place where this legislation can be improved in its administration; possibly the regulations require amendment. There was something in what the hon. member for Assiniboia had to say in respect of the smaller farms. I would say there is an opportunity for the development of what I call the modest maintenance farm for those who find satisfaction and happiness living under rural circumstances. We are so inclined to think everybody wants to make money. I have hundreds of farmers of this type in my constituency whose material standard of living is lower than the average of many, but whose real standard of living is quite high because of the circumstances under which they live.


Lawrence Elliott Kindt: May I ask the hon. member if the Freedomites live in his constituency?


Herbert Wilfred Herridge: The hon. gentleman has not been reading the newspapers recently. I am glad to report that they are now living in the constituency of the hon. member for Fraser Valley.
I say there are a good many of these people who live on small farms, who produce many of their own requirements, and have sufficient

Farm Credit Act
to buy the things they need. They are quite happy living modestly. In many cases they have nice homes, lawns, gardens, good libraries and things of that sort. This type of modest maintenance farm should receive some consideration in this type of legislation. As I say, I have hundreds of people of this type in my constituency who farm in this way, and who are not concerned with money. They simply want to enjoy the country in which they live. I want to say that I represent the garden of Eden in more than one sense. It is geographically beautiful; and then we have other features that were found in the garden of Eden in the early days. I do suggest that consideration should be given to what I call the modest maintenance farm, the people who enjoy this type of life and who are really happy.


Robert Norman Thompson: Come over and join us.


Herbert Wilfred Herridge: I can see that I am making converts wholesale amongst the Social Credit members. It is wonderful to see how they change once they come here.
Then, there is another type of farm that should receive some consideration and that is the part time farm related to industry, such as the tree farm. This type of farming is growing. The industrial worker can come home, and because of the equipment that is available today he can raise 3,000 chickens or farm four or five acres of orchard. I think this part time farming should be encouraged and the legislation should give some consideration to this type of farming. The more Canadians you keep close to the soil, the safer Canada will be.
Then, there should be a program to provide research into the social and economic problems of agriculture. I should like to quote from a statement to the federal-provincial agricultural conference by the Canadian Federation of Agriculture on this question. I quote:
The Canadian Federation of Agriculture is increasingly convinced of the urgent need for increased and more effective independent research into the economic and social problems of agriculture. It fully supports the findings of the Winnipeg national conference on farm policy research, and in particular the view that there is a great need for research into the effects and implications of agricultural policies, and into the probable effects and implications of policy alternatives which are open to us.
I think there could be considerable research in that direction. So far as production is concerned, we are getting along fairly well. So far as marketing is concerned, I think a good job has been done. However, I feel we need more research into the economic and social problems of various

types of agriculture, and how federal and provincial governments can be of assistance in meeting these problems.
I believe also we have to have an agriculture policy that provides for a complete revision of the tax policies at provincial and municipal levels. I know that is not within the compass of the federal government. I believe this is something that can be worked out at dominion-provincial conferences on agriculture. This is a very serious problem to the farmers all across Canada, the question of provincial and municipal taxes. I think there is a great deal that can be done to assist the development of the farm and the extension of rural life by a change in our agricultural taxation policy.
I think there is need for a policy to provide for further studies into all aspects of financing the family farm, the modest maintenance farm and the part time farmers, as I would call them. In that connection, I want to quote again from this conservation bible of mine, the report of the resources for tomorrow conference. This is a brief paragraph which is found on page 114. It is headed "Financing the farm firm" and states:
It is very difficult to obtain a comprehensive picture of the problems associated with the current capital and credit position of Canadian farmers. A greater quantity of credit is now available to farmers as a result of recent federal and provincial credit legislation. For the present it would appear that the available credit is reasonably adequate for the development of efficient family farm units in Canada. However, several problems need to be anticipated from the standpoint of financing the farm firm of the future. Consideration needs to be given to the following areas:
(a)	Beginning farmers: Studies need to be carried out to discover how the present credit legislation applies to the beginning farmer. Considerable research needs to be devoted to the area of supervised credit, and how far the public credit agencies should go in substituting supervision for equity collateral for the beginning farmer.
(b)	Use of credit consistent with the required adjustments of the agriculture industry. For example, studies might be initiated to examine the problems associated with the attempt by the lending agencies to lay a more positive role in the use of credit in agriculture.
(c)	Study needs to be devoted to the possibilities of tenancy as a method of obtaining much needed sources of long term capital in agriculture.
(d)	Steps need to be taken to see that more liberal credit policies are not capitalized into higher land values.
(e)	A comprehensive study is needed to examine the problems associated with, and the continued feasibility of, the farm operator accumulating the full value of the farm assets once every generation.
(f)	Study needs to be given to the problems and possibilities of adopting the share capital method of financing the agricultural industry consistent with the ideal of the family farm.


Mr.   Kindi@: Is that national planning or local planning?


Herbert Wilfred Herridge: Our policy is one of planning which permits co-operation between federal

and provincial governments, farmers and farm organizations. You note, Mr. Chairman, although we suffer temporarily from the disability of a Progressive Conservative government, we have much to be grateful for in this country. I think we have always got to remember this: There are many things that should be done for a great number of Canadians, but we should be grateful that we are Canadians, live in Canada and have opportunities.
I am going to tell you a story before I conclude. When I was in Britain-


Some hon. Members:: Ten o'clock.


Herbert Wilfred Herridge: I shall finish in three minutes. When I was in Britain I met an old lady, 75 years of age and I talked with her. I told her that I admired her. She said, "Mr. Herridge, I was born in this street and I am dying in this street, and no blooming Hitler will ever blow me out." She went on to tell about the hardships of her life, her modest income, and so on. She was an old age pensioner or something of that sort. She said, "We have always got something to be grateful for. I have had a hard time in my life, but I have a lot to be grateful for." I said, "Madam, what have you got to be grateful for, you seem to be living in extremely modest circumstances". She said, "I'll tell you, sir, what it is. First of all, I am grateful that I live in Britain. Second, I am grateful that we live in freedom. Third, sir, I have something personal to be grateful for. Do you know, sir, that from the time I was a girl, up to the battle of Britain I had to take medicine for my bowels. I have never had to take any since".
Som


a hon. Members:: Oh, oh.


Robert Norman Thompson: What has that got to do with farm credit?


Some hon. Members:: Ten o'clock.
Business of the House


Gordon Campbell Chown: Order. Shall the resolution carry?


Herbert Wilfred Herridge: Mr. Chairman, in concluding may I say that the dear old lady said to me, "Do you know how I am showing my gratitude. I have been participating in government ever since. I am doing all I can to make things better for the folk on our street".
I think we can learn a lesson from that old lady. We have much to be grateful for. We have a duty and a responsibility to promote farming as a way of life, to promote the restoration of rural Canada to its former greatness and its position in Canadian society. We want a policy that provides purpose and opportunity for participation, planning by governments, co-operation among farmers and community organization, all based on the initiative and virtues of farm folk.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I inquire from the house leader what the business will be for tomorrow?


Mr. Churchill:: We will continue tomorrow with the business that was announced last night, starting with the resolution in the name of the Minister of Agriculture.


Lionel Chevrier: May I ask, in view of the statement made by the Minister of Finance today, what the business will be for Thursday and Friday?


Gordon Minto Churchill: Mr. Speaker, I hope to be in a position tomorrow at six o'clock to give the house information as to what will be occurring on Thursday and Friday and the next week.


[Stage Direction]
It being three minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
27507-3-39i
[Stage Direction]
Wednesday, October 17, 1962