1963-10-16

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Ottawa, October 15, 1963.
Sir:
I have the honour to inform you that the Honourable Robert Taschereau, P.C., Chief Justice of Canada, acting as Deputy to His Excellency the Governor General, will proceed to the Senate chamber today, the 15th of October, at 5.45 p.m., for the purpose of giving the royal assent to certain bills.
I have the honour to be, sir,
Your obedient servant,
A. G. Cherrier,
Assistant Secretary to the Governor General.



PRIVILEGES AND ELECTIONS


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, on motions I should like to ask the unanimous consent of the house in order that the report of the committee on privileges and elections be considered this very day.
devoted to government business, while Mondays and Tuesdays are normally reserved for matters brought up by the opposition.
Then the leader of the "Ralliement des creditistes" stated in Quebec city, last Sunday, that his group was giving parliament only three days to recognize the thirteen Creditistes members. On that occasion, he also stated: we will find the means, through independence, to have the existence of French Canadians recognized-


Mr. L. P. Antoine Belanger (Charlevoix):: Mr. Speaker, on a point of order.


Mr. Speaker:: Is this a point of order?


Louis-Philippe-Antoine Bélanger: Yes, Mr. Speaker.
I do not think the hon. member for Sherbrooke has the right to raise a discussion at this stage. He is only entitled to say whether or not he is giving his consent. If he does not wish to have us deal with the motion today, then he is simply opposed to the unanimous consent of the house and we do not have to know about anything else.


Mr. Speaker:: I think you are right.


Mr. Chapdelaine:: Mr. Speaker, I believe I may explain why I do not give my consent-


Louis-Philippe-Antoine Bélanger: You have no right to.


Gérard Chapdelaine: -to a debate on the motion today.


Hon. J. W. Pickersgill (Secretary of State):: Although perhaps this procedure is slightly irregular, I think we should deal with the suggestion made by the hon. gentleman. I may say I have consulted my hon. friend from Hull, and if there was unanimous consent, and if there seemed to be a reasonable disposition on the part of the house to dispose of this matter today-this is, after all, a short day-the government would be disposed to agree to proceeding on the basis of unanimous consent. However, the matter rests with the house.


Louis-Philippe-Antoine Bélanger: Mr. Speaker, the hon. member has no such right.


Mr. Speaker:: This is not the time to submit arguments, but simply to find out whether or not there is unanimous consent.


Mr. Real Caouelte (Villeneuve):: Mr. Speaker, I rise on a question of privilege. When the hon. member for Sherbrooke refers to the Caouette group in the house, he is grossly mistaken. For his information, we are Social Crediters sitting in the House of Commons.


Gilles Grégoire: Mr. Speaker, since I am the one who asked-


Mr. Speaker:: Does the house give unanimous consent?


Gérard Chapdelaine: Mr. Speaker, I find myself constrained to prevent unanimous consent from being given to a discussion of the Caouette group's claims, and that for two reasons. First, because Wednesdays, Thursdays and Fridays are usually


Some hon. Members:: Order.


Gilles Grégoire: Mr. Speaker, now that the barkers of the Liberal party have finished-


Mr. Speaker:: Is the hon. member rising on a question of privilege?


Gilles Grégoire: Yes, Mr. Speaker. Since I am the one who asked for the unanimous consent of the house, I must say that the very ones who object are those who are trying to stick

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with us, when we want to get rid of them as soon as possible.


Some hon. Members:: Agreed.


Mr. Speaker:: It seems obvious that unless unanimous consent is given I am obliged to proceed with the orders of the day in accordance with the rules.


Some hon. Members:: Agreed.


Mr. Speaker:: Am I under a misconception? Does the house give unanimous consent or not?


Some hon. Members:: No.


Gérard Chapdelaine: Mr. Speaker, I am against giving consent. I wanted to state my reasons, but I was prevented from doing so.



QUESTIONS

['Mr. Speaker, may I revert to the question put to me by the hon. member for Compton-Frontenac (Mr. Latulippe)?\n\nIn reply to his question, I may say that there was no reaction at all from the Cuban government.']
John Whitney Pickersgill: Mr. Speaker, the following questions are being answered today: 873,
Location and Riding Newfoundland (1)
Cornerbrook (Humber-St. George's)
Nova Scotia (2)
Halifax (Halifax)
Sheet Harbour (Halifax)
Quebec (2)
Montreal (Dollard)
Repentigny (Joliette-L'Assomption-Montcalm)
Ontario (5)
Lambeth (Middlesex East)
Meaford (Grey-North)
Prescott (Grenville-Dundas)
Sauble Beach (Riviere Sauble)
(Bruce)
Tavistock (Oxford)
Alberta (1)
Calgary (Calgary South)
British Columbia (4)
Fort Nelson (Cariboo)
Sooke (Esquimalt-Saanich)
Victoria (Victoria)
Victoria (Victoria)
1,022, 1,088, 1,119, 1,169, 1,174, 1,202, 1,220, 1,234, 1,243, 1,278, 1,284, 1,286, 1,287, 1,288, 1,289, 1,290, 1,292, 1,294, 1,312, 1,313, 1,332.
I would ask that question No. 1,141 be made an order for return. If Your Honour would be good enough to call starred questions 1,236, 1,256, 1,264, 1,271 and 1,274 I would ask that the remaining questions be allowed to stand.
(Questions answered orally are indicated by an asterisk.)



Mr. Pigeon: 1.	What are the projects of the Department of Public Works which are included in the estimates but which will not be carried out in 1963-64?
2.	What is the number of these projects, by provinces, and by constituencies, and the amount allocated for each project?


Mr. Badanai:: 1 and 2.
Projects	Amounts
Improved premises for federal
services	$130,000
Public building	350,000
Public building	40,000
Building to house U.I.C. office for
for north section	115,000
Dredging	200,000
Public building	40,000
Harbour improvements	75,000
Public building	150,000
Harbour improvements	60,000
Public building	30,000
Public building	300,000
Public building	50,000
Dredging	90,000
Public building	300,000
Harbour improvements	135,000


CLASSIFICATION OF PRINT SUPPLIERS, P.P. AND S.
Mr. Fisher: 1.	Does the Glassco commission report, volume 2, page 305, paragraph 2, regarding the Department of Public Printing and Stationery, report that "classification of printers based on the quality of printing jobs previously undertaken is inadequate and, therefore, contracts for prestige or specialized
work may be let to printers without the necessary capacity or equipment" and, if so, which classification of suppliers results in contracts being let to printers without the necessary capacity and equipment (a) the classification on which the print buyer bases his selection of tenderers or (b) the classification on which the chief purchasing agent may alter the selected tenderers or (c) the classification of those other than in the purchasing and stores branch who have the authority to alter the print buyer's selection of tenderers?


IS, 1963
[Stage Direction]
2.	Does the print buyer maintain records of print suppliers pertaining to (a) to equipment capacity (b) are suppliers with insufficient capacity and equipment classified or known from printing jobs previously undertaken (c) do government departments inform the print buyer of poor quality printing bought by the purchasing division?
3.	Are any purchasing records pertaining to (a) printers' equipment and capacity (b) classification of printers from printing jobs previously undertaken (c) classification of any suppliers whatsoever maintained in any office of the Department of Public Printing and Stationery other than purchasing and stores branch and, if so (d) in what office (e) for how long and (f) what are the various divisions of the classifications?
Mr. Drury:: 1. Yes. Since the Glassco commission report gave no specific detail as to which printing jobs were referred to under this section, it was not possible to comment upon which classification of suppliers might have been responsible for the allocation of work to printers considered to be "without the necessary capacity or equipment".
2.	(a) Yes; (b) yes; (c) yes.
3.	(a) Yes; (b) no; (c) yes; (d) the office of the queen's printer; (e) two years; (f) e.g., engravers, typesetters, carbon interleaved forms manufacturers, printers by size of equipment, calling cards manufacturers.


INDICATION OF PRICE ADVANTAGE ON RETAIL PACKAGES
Mr. Orlikow: Is the government considering legislation or regulations to prohibit the printing on packages of information stating or implying that the product is being offered for sale at a price lower than the customary retail price or that a price advantage is being accorded to the purchaser because of the size or quantity of the package (but this does not apply to the ultimate retailer) ?


John Whitney Pickersgill: None beyond that now in effect.


CRIMINAL CODE AMENDMENT RESPECTING PRE-SENTENCE REPORTS
Mr. Orlikow: Is the government considering amending the Criminal Code along the lines recommended in the Fauteux report so as to provide that (a) where a convicted person is between the ages of 16 and 21 years or where a maximum term of imprisonment of two years or more may be imposed, no offender should be sentenced to any term of imprisonment without consideration by the court of a pre-sentence report (b) no sentence involving corporal punishment should be imposed upon any offender without prior consideration of a presentence report concerning the physical and mental condition of the offender (c) no sentence of corporal punishment should be executed until full inquiry has been made by the remission service and the responsible authority has ordered that there will be no interference with it?


Mr. Chevrier:: As to (a) and (b) the desirability of such amendments is being studied in the Department of Justice in connection with the continuing criminal law amendment program. As to (c), while no amendment has 28902-5-231
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been made to this effect, the national parole board is expressly empowered, upon application, to revoke or suspend any sentence of whipping and as a matter of practice, any such sentence is suspended by the board pending such investigation.


PAROLE BOARD
Mr. Orlikow: Is the government considering separating the functions of the chairman of the parole board and director of the parole service so that these two be administered by two separate people rather than one person as is now the case?


Lionel Chevrier: The answer is no, because the functions of the chairman of the parole board and the director of the parole service are administered by two separate people. This is in accordance with the organization proposed by the Fauteux report which quotes as follows:
"The chairman of the board should be the chief administrative officer for the purposes of all the operations of the board. The day to day administration of the parole service should be the responsibility of an executive director who should be responsible to the chairman of the board. It would be the responsibility of the executive director to see to the proper investigation of cases and the preparation of material in relation to them for consideration by the board and also the supervision of parolees."


DETAILS OF CERTAIN PAYMENTS LISTED IN PUBLIC ACCOUNTS
Mr. Thompson: 1.	In reference to payments by privy council, as recorded in the public accounts 1961-62, page 28.6, as follows:
Leatham, Simpson Limited, management consultants, Montreal, Quebec-$69,693;
Peat, Marwick, Mitchell & Company chartered accountants, Ottawa, Ontario-$217,040;
MacDonald Currie Ltd., Ottawa-$59,365;
Price. Waterhouse and Company, Ottawa and Montreal-$47,255;
G. Tilley, Ottawa-$27,120;
W. Wallace, Muir Associates Limited, Ottawa- $37,520.
(a) what was the basis of the engagement of this type of personnel (b) what was the rate of remuneration and the controls, if any, on the quantity of services rendered?
2.	Under the Department of Public Works, public accounts, page 31.24, is listed the payment for the Ottawa Car and Aircraft building, $164,500, (rented), landlord L. Mayzel; and also for Albert, Kent and Slater streets, $173,678. With reference thereto: (a) what are the terms of leases (b) for what is this spaced used?


John Whitney Pickersgill: 1. (a) Engagement was by an exchange of correspondence between the royal commission and the firm or individual concerned, setting out terms as approved

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by the treasury board, under authority of P.C. 1960-1269 of 16 September, 1960.
(b)	The rate of renumeration varied according to the qualifications and experience of the individual; supervision of the work was provided in the usual way by the directing staff of the royal commission.
2.	Ottawa Car and Aircraft building-2 leases:
Lease No. 1-(a) From February 1, 1960 to September 30, 1960, and monthly thereafter at $21,000 per annum. Lease was terminated on September 30, 1961, so only half the annual amount ($10,500) was entered in the 1961-62 public accounts; (b) this space was used by the Department of Public Works, purchasing and stores branch, for furniture storage.
Lease No. 2-(a) From February 1, 1960, and runs to January 31, 1965, at an annual rental of $154,000; (b) This space is used by the Department of Veterans Affairs, war service records.
Albert, Kent and Slater streets (Kent-Albert building)-4 leases:
Lease No. 1-(a) From March 19, 1956 to March 31, 1966 at $111,065.07 per annum; (b) For space occupied by the national film board and the Departments of Public Works and Northern Affairs and National Resources, for office accommodation.
Lease No. 2-(a) From May 28, 1956 to May 31, 1966 at $39,644.63 per annum; (b) For space occupied by the national film board and the Departments of Public Works and Citizenship and Immigration, for office accommodation.
Lease No. 3-(a) From September 24, 1956 to March 18, 1966, at $18,800 per annum; (b) for space occupied by Department of Citizenship and Immigration, for office accommodation.
Lease No. 4-(a) From December 15, 1957 to December 31, 1962, at $4,167.96 per annum; (b) For space occupied by the civil service commission, for office accommodation.


GORDON SHEPPARD
Mr. Fisher: 1.	What office does Gordon Sheppard hold in the government?
2.	What is his age, place of birth, institutions of education attended and educational qualifications, governmental or business experience (position held, length of experience, name of firm or employer), and initial and present salary with the government?
3.	What length of time has this gentleman undertaken to serve the government and/or what engagement in length of time was given to him?
4.	In brief, what particular qualities of Mr. Sheppard led to his engagement?


John Whitney Pickersgill: 1. Mr. Gordon Sheppard was appointed special assistant to the Secretary of State effective October 1, 1963.
2.	Mr. Sheppard, 26, was born in Montreal and is bilingual. He received his senior matriculation at the University of Toronto schools, Toronto. Subsequently, Mr. Sheppard studied political science and economics at the University of Toronto (B.A. 1957) and history, under A. J. P. Taylor, at Magdalen college, Oxford University, England (B.A./M.A. 1960).
In the summer of 1957, Mr. Sheppard worked as a reporter for the Quebec Chronicle-Telegraph.
From 1957-1960, he wrote feature articles for the Toronto Telegram.
From 1960-1961, Mr. Sheppard worked for the Canadian Broadcasting Corporation (public affairs-television and radio), as interviewer, story editor, writer and film director.
In 1961, Mr. Sheppard co-founded InterVideo Productions Limited to produce television programs and films. From 1961-1963 he was vice president and director of InterVideo Productions Limited. Included among Mr. Sheppard's television productions was a unique C.T.V. program featuring Mr. Douglas Fisher, M.P.
Mr. Sheppard's salary is $10,000 per year.
3.	During pleasure.
4.	His education and experience.


BEAUCEVILLE, QUE., POST OFFICE CONSTRUCTION
Mr. Perron: 1.	Why was it necessary to start building tho Beauceville post office again?
2.	Were the changes that have been carried out provided for in the plan originally accepted?
3.	Are the changes to the initial project expected to increase the cost?
4.	What is the estimated cost of the increased expenditures brought about by these changes?
5.	Why was the original project changed after it had been accepted?


Hubert Badanai: 1. Part of the structure had to be rebuilt due to an error in the plans.
2.	No.
3.	Yes.
4.	$2,450.00.
5.	Because, in the original plans, the floor level was too low as compared with the sidewalk level.


DAWSON CITY, Y.T.  AIRPORT IMPROVEMENT
Mr. Nielsen: Has the government received any representations for the improvement of the airport at Dawson city in the Yukon Territory and, if so, from whom were such representations received, and what action is intended by the government in respect thereto?


Mr. Mcllrailh:: No representations have been received for improvement to the Dawson city airport since those received from the Dawson city chamber of commerce in March, 1961. These representations requested that the runway be lengthened to provide for the increased traffic anticipated for the 1962 gold rush festival. An economic study was subsequently made which did not support the expenditure of federal funds at that time for that purpose, and Mr. Nielsen, M.P., was advised by the Minister of Transport on July 31, 1961, that a case could not be made for this work.


* RAMPART DAM PROJECT, ALASKA
Mr. Nielsen: 1.	Has the government of Canada, or any official or employee of the government, had any consultations with, or exchange of notes or correspondence from the government of the United States of America, or any official or employee thereof, with respect to the proposed Rampart dam project in the state of Alaska and, if so, what is the nature of such consultations, notes or correspondence?
2.	Does the government of Canada intend to make representations to the government of the United States of America pointing out the harmful effects which the construction of the Rampart dam project will have with respect to the potential hydroelectric development of the Yukon river and its watershed, with all related harmful effects which would result from the flooding of the areas adjacent to the Yukon river, if the Rampart project were to proceed.


Mr. Martin (Essex East):: 1. Informal consultations have been held between officials of certain departments of this government and the appropriate departments of the government of the United States with a view to obtaining such preliminary information as is available with regard to this project, which is still in the research stage. Some correspondence has been directed by departments of this government to the United States authorities with the same objective.
2. In view of the very limited knowledge of this project that is available at the present time, no decision with regard to such action is now possible.


COASTAL TRAFFIC
Mr. Beaule: 1.	How many ships are registered in Canada at the present time?
2.	What proportion of the total quantity of iron ore shipped out of Seven Islands in each of the past five years has been carried by ships registered in Canada?
3.	What proportion of Canadian coastal traffic was borne in each of the past five years by ships registered in Canada?


John Whitney Pickersgill: 1. 22,629 as of October 1, 1963.
2. Percentage of total quantity of iron ore shipped out of Seven Islands, carried by ships registered in Canada:
28902-5-2314
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1958, not available; 1959, not available; 1960, 24.0; 1961, 32.4; 1962 (estimate only), 34.8.
3.	The percentage of Canadian coastal traffic borne by ships registered in Canada:
1958, 87.5; 1959, 88.7; 1960, 85.8; 1961, 85.1; 1962 (estimate only), 86.6.


* TRIALS OF INMATES, ST. VINCENT DE PAUL PENITENTIARY
Mr. Howard: 1.	How many inmates of St. Vincent de Paul penitentiary have been tried and convicted for offences arising out of the riot in that penitentiary on June 17, 1962, and what were (a) the charges, and (b) the sentences imposed in each case?
2.	How many such inmates are still awaiting trial for charges laid as a result of the said riot?


Mr. Macdonald:: 1. Eight inmates have been tried and convicted.
The charges and sentences in each case are as follows:
Inmate No. 3605, Nicholas G., charged with taking part in riot, causing damages to property and assaulting a peace officer. Sentenced to 14 years consecutive.
Inmate No. 4318, Bernier G., charged with interfering in the duty of a peace officer. Sentence suspended, awarded a $200 bond to keep peace.
Inmate No. 6262, Bonenfant P., charged with taking part in riot, causing damages to property and assaulting a peace officer. Sentenced to seven years concurrent.
Inmate No. 7043, Young W., charged with taking part in riot, causing damages to property and assaulting a peace officer. Sentenced to nine years consecutive.
Inmate No. 7166, Gunn, A., charged with taking part in riot and causing damages to property. Sentenced to one day concurrent.
Inmate No. 7451, Beaulieu M., charged with taking part in riot and causing damages to property. Sentenced to five years concurrent.
Inmate No. 5142, Drapeau E., charged with taking part in riot and causing damages to property. Sentenced to 23 months concurrent.
Inmate No. 6462, Boloyan G., charged with taking part in riot and causing damages to property. Sentenced to 23 months.
2. 22.


*SITE FOR PENITENTIARY, ST. PIE DE BAGOT, QUE.
Mr. Ricard: 1.	Did the government purchase four farms located on the Grand Rang Saint-Francois at St. Pie de Bagot for $83,000 in 1962 as the site for a medium-security penitentiary?
2.	Has the government cancelled this project and, if so, for what reason, and what use will be made of this property by the government?


Donald Stovel Macdonald: 1. Yes.

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2. The uprising at St. Vincent de Paul penitentiary convinced us that it is more urgent to build a special detention unit and a maximum security penitentiary than the proposed institution for juvenile delinquents. Therefore, the construction program was slightly changed.
To facilitate access to those two institutions of St. Vincent de Paul penitentiary, it was found necessary to build on the north shore of the St. Lawrence and steps have been taken in that connection.
The properties at St. Pie de Bagot will be kept by the penitentiary service for future use.

*	ACREAGE PAYMENTS TO WESTERN FARMERS


Mr. Rapp: 1.	What was the total amount of acreage payments made to the Western Prairie farmers by the previous government during the three years these payments were made?
2.	What was the total amount received by Alberta farmers, Saskatchewan farmers and Manitoba farmers, separately?


Mr. Beer:: 1. Acreage payments totalling $120,322,467 were paid to western prairie farmers on three occasions. These payments commenced in October 1958, September 1960 and February 1962.
2. Alberta, $39,652,725; Saskatchewan, $59,118,114; Manitoba, $21,551,628.
*	CONSTRUCTION OF VETERINARY COLLEGE,


SASKATOON
Mr. Forbes: Was an agreement entered into with the province of Saskatchewan for the construction of a veterinary college at Saskatoon and, if so, (a) what is the amount of the federal government's contribution towards the cost of same (b) will the college be constructed in time to accommodate students in the fall of 1964?


Bruce Silas Beer: The government has undertaken to contribute 25 per cent of the capital cost of establishing a veterinary college in western Canada, to a maximum of $625,000, the location of the college to be decided by the western provinces. The decision of the western provinces has been to locate the college in Saskatoon at the University of Saskatchewan. The contribution of the government of Canada will, therefore, be available towards the capital cost of a veterinary college at that location.
It is a condition of the federal assistance that students who have completed their first year of veterinary studies at a pre-veterinary course at other institutions be accepted into the second year of veterinary studies at the new college not later than the fall of 1964.


SUMMER COURSES, GROSSE ILE EXPERIMENTAL STATION, QUE.
Mr. Berger: Does the Department of Agriculture, production service (health of animals division) sponsor summer courses at Grosse lie experimental station, Montmagny county, Quebec, and, if so (a) by whom are these courses organized, and of what do they consist (b) how many courses are so given every year (c) who is permitted to follow these courses, and how many persons follow them (d) what personnel is required for the purpose of conducting the courses, and what is the detailed annual cost of the said operation?


Mr. Hays:: Yes, the Department of Agriculture, health of animals branch does sponsor courses at Grosse He experimental station, Montmagny county, Quebec.
(a)	The health of animals branch, Canada Department of Agriculture organizes these courses. The courses consist of demonstrations and lectures on exotic animal diseases and applicable control measures.
(b)	Usually one course of 10 days or two weeks duration is given each year. In June, 1963 the United States department of agriculture operated a similar course at Grosse He for their own veterinarians, with two Canada Department of Agriculture veterinarians attending. The cost of this course was borne by the United States department of agriculture.
(c)	Veterinarians of the health of animals branch, Canada Department of Agriculture and, occasionally, veterinary officers of national foreign governments. As an example, this year, at the request of the Australian department of agriculture, two veterinarians from that country attended. Twenty veterinarians attend each course.
(d)	To conduct the normal course the personnel required are as follows:
(1)	Professional and technical full time staff of the animal pathology division, health of animals branch, Canada Department of Agriculture, who are on instructional duty four or five at a time with a total of 12 involved during the course period.
(2)	Casual staff to attend animals, perform cleaning services and prepare meals. The number of casual staff employed is eight.
The detailed cost of operating the 1963 course which is about average, was:
Wages of casual staff	$2,738
Experimental animals	560
Animal feed and other	
supplies	300
Food for meals	1,100
Total	$4,698


MILK AND CHEESE PRICES, QUEBEC
Mr. Vincent: 1.	How much did milk, used for making cheese, cost in the province of Quebec in June, July and August 1962 and 1963?
2.	What was the price of white Quebec Cheddar, grade 1, in June, July and August 1962 and 1963.
Answer: 1. Average cost of milk used for making cheese, f.o.b., factory, Quebec.
1962	1963
$ per cwt. $ per cwt. June	2.85	2.90July	2.85	2.90August	2.85 not yet available
2. Average price of Cheddar cheese, 1st grade, Quebec white, wholesale, Montreal.
1962	1963
0 per lb.	0 per lb.
June	32.0	34.2July	32.0	35.2August	32.2	35.3


QUEEN'S PUBLISHER
Mr. Fisher: Has Mr. Roger Duhamel, the queen's printer, been offered the proposed post of queen's publisher and, if so (a) has he accepted (b) will his salary remain unchanged (c) what are his major responsibilities (d) to whom is he immediately responsible, and (e) on what date did he first act in an acting capacity?


Charles Mills (Bud) Drury: The creation of the proposed post of queen's publisher and the related changes in legislation are still under consideration.
(a)	Mr. Roger Duhamel continues in his post as queen's printer.
(b)	His salary is unchanged.
(c)	, (d) and (e) As a result of P.C. 19631254 of August 21, 1963, and P.C. 1963-1450 of October 3, 1963, his major responsibilities are the sale of publications for both houses of parliament and departments of the government of Canada, and include the procurement of print for these publications. He reports to the Minister of Industry.


RESPONSIBILITIES OF QUEEN'S PUBLISHER
Mr. Fisher: Will it be a responsibility of the proposed branch of queen's publisher to (a) choose the printing jobs which will be submitted to the printing bureau (b) choose the printing jobs which will be submitted to commercial printers for tendering, and (c) supervise completion of the printing jobs in the printing bureau?


Charles Mills (Bud) Drury: The creation of the proposed post of queen's publisher and related duties is under consideration. For current duties see answer to question 1,286.
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calling tenders (c) awarding the contract (d) supervising completion of the printing (e) classifying those printers eligible to be invited to tender?


Charles Mills (Bud) Drury: The creation of the proposed post of queen's publisher and related duties is under consideration, as indicated in answer to question 1,286.


RESPONSIBILITIES OF DIRECTOR OF PRINTING
Mr. Fisher: On September 30, 1963, what divisions and parts of divisions of the Department of Public Printing and Stationery, and how many employees of each have become the responsibility of the Director of Printing?


Charles Mills (Bud) Drury: Order in Council P.C. 19631254 dated 21st August, 1963, authorized the transfer to the Department of Defence Production of certain functions formerly part of the Department of Public Printing and Stationery.
Subsequently, the following functions and employees became the responsibility of the acting director and superintendent of printing:
Branches and/or	No. of employees
parts thereof	(as of Sept. 30/63)
Office of the acting director and
superintendent of printing . .	2
Departmental secretary 		9
Personnel services		11
Financial services 		70
Printing production 		787
Outside printing production . .	406
Total	1,285


DIRECTOR OF PRINTING
Mr. Fisher: Has Mr. C. B. Watt, assistant queen's printer, been offered the proposed post of director of printing and, if so, (a) has he accepted (b) will his salary remain unchanged (c) what are his major responsibilities (d) to whom is he immediately responsible, and (e) on what date did he first act in an acting capacity?


Charles Mills (Bud) Drury: The post of director and superintendent of printing is provided for under section 14 of the Public Printing and Stationery Act, R.S. 1952, chap. 226.
(a) Mr. C. B. Watt has accepted this post in an acting capacity; (b) his salary is unchanged; (c) his major responsibilities are to manage the printing operations of the government of Canada at the main plant in Hull and all other plants in Ottawa and in various cities across Canada; (d) the deputy minister of defence production; (e) August 23, 1963.


SERVICE TO DEPARTMENTS BY QUEEN'S PUBLISHER
Mr. Fisher: Will the facilities of the queen's publisher serve departments by (a) establishing specifications (b)


PERSONNEL OFFICE, QUEEN'S PUBLISHER
Mr. Fisher: Will the personnel office of the queen's publisher be established in the printing bureau and if not,

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(a) where is it to be located (b) are the offices being prepared (c) when did the preparations begin (d) when will the queen's publisher move there?


Charles Mills (Bud) Drury: The creation of the proposed post of queen's publisher and related duties is under consideration, as indicated in answer
to question 1,286.
PROCUREMENT OF PRINTED MATERIAL BY queen's PUBLISHER


Mr. Fisher: Will the responsibility for procuring and buying all print for federal government departments be a responsibility of the queen's publisher, and, if so, what categories of printed material?


Charles Mills (Bud) Drury: The creation of the proposed post of queen's publisher and related duties is under consideration, as indicated in answer to question 1,286.


UNEMPLOYMENT STATISTICS
Mr. Lalulippe: 1.	How many persons were unemployed in Canada during the month of August?
2.	Of this number, how many were women and, amongst these (a) how many were married (b) how many were there whose husband was working (c) how many were under 20 years of age?
3.	How many men were unemployed during the
same month and, of these, (a) how many were married and had children (b) how many were under 20 years of age?	.
4.	Of the total unemployed during this month, how many were only temporarily out of work and expected to return to their work or to take a new job before August 31.
Answer: 1. In the week ended August 24, 1963, it is estimated that 270,000 persons were unemployed.
2.	Of the total unemployed, 59,000 were
women:	(a) There were 16,000 married
women unemployed; (b) not known; (c) of the 59,000 unemployed women, 26,000 were under 20 years of age.
3.	Of the total unemployed, 211,000 were men: (a) There were 101,000 married men unemployed. It is not known how many of these had children; (b) of the 211,000 unemployed men, 47,000 were under 20 years of age.
4.	It is not known how many of the unemployed expected to return to their work or to take a new job before August 31. However, of the total unemployed in the week ended August 24, 1963, 18,000 were on temporary lay-off with instructions to return to work within 30 days of date that the lay-off commenced.


INCREASE IN COST OF LIVING
Mr. Latulippe: 1. What was the increase in the cost of living index during the last five years?
2 What proportion does this increase represent in relation to the tax increase during these five years?

3.	What was the price increase during these five years of (a) paper (b) steel (c) aluminum (d) copper (e) wool (f) sugar?
4.	What was the proportional price increase for manufactured products during these five years?
Answer: 1. The annual average consumer price index increased 7.2 per cent from 1957 to 1962.
2.	Not known. A corresponding index of tax increase is not available.
3.	Percentage changes in the annual average commodity indexes of the general wholesale index during the same five year period were as follows: (a) paper products, +10.1; (b) iron products, +1.4; (c) aluminum products, - 1.4; (d) copper products, +7.8; (e) wool, raw, domestic, +8.6; (f) sugar and its products, - 25.6.
4.	The percentage change in the annual average index of fully and chiefly manufactured goods was +4.7.


EXHIBITION COMMISSION, TRADE AND COMMERCE DEPARTMENT
Mr. Horner (Acadia): 1.	How many people are employed by the Department of Trade and Commerce under the exhibition commission?
2.	Is the main purpose of the exhibition commission to assist in exhibiting Canadian produce in order to promote trade?
3.	Did the minister specifically inform the exhibition commission to develop and frame his picture and send copies to every trade and commerce office throughout the world and, if so, how many were developed and framed, and at what cost to the government?
Answer: 1. As of September 30, 1963:
Under certificate of the civil service commission	35
Prevailing rate	75
Locally engaged (London, England) 8
Total	118
2.	Yes.
3.	No.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Matheson: What public offices were filled or public appointments made by orders in council dated between February 5 and April 22, 1963?


MOTIONS FOR PAPERS
[Stage Direction]
Motion No. 62-Mr. Barnett:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of the cabinet minute or other official document which authorized the Secretary of State for External Affairs to notify the executive director, the international north Pacific

fisheries commission, by telegram under date of May 10, 1963, that the commission's recommendations for the removal of the halibut stocks in the eastern Bering sea and the herring stocks west of the Queen Charlotte islands from the annex to the convention had been accepted by the government of Canada.
Mr.   Marlin@Essex East: The government, as my hon. friend knows, approved the three recommendations of the international north Pacific fisheries commission concerning the removal of halibut stock in the eastern Bering sea and herring stock west of the Queen Charlotte islands from the annex of the north Pacific fisheries convention. This decision was communicated to the executive director of the commission on May 10. Action was taken on the authority of this cabinet decision and no other official documents exist.
With regard to the production of the actual cabinet minute, as my hon. friend I am sure well knows, it is a well established rule in Canadian parliamentary practice that the texts of cabinet minutes are not made public.
I regret, therefore, I cannot agree to the motion, and I ask my hon. friend to be good enough to withdraw it.


Mr.   Barnell@: I would not quarrel with the general principle enunciated by the minister in respect of cabinet minutes, but it does seem to me there are some particular circumstances surrounding the situation which the minister has outlined in connection with this matter. It is apparent from what he has said that there are no other official documents in connection with the action taken by the government.
It seems to me there are some special circumstances attached to this kind of situation. I should like to ask, therefore, following the good example of the present minister in the previous parliament, to have this motion transferred to a place on the order paper where it would become a debatable motion.


Mr. Speaker:: Under standing order 47, it is so transferred.
COLUMBIA RIVER TREATY Motion No. 93-Mr. Herridge:
That an order of the house do issue for a copy of all correspondence and telegrams exchanged between the Prime Minister or any member of the government and any private citizen in Canada with respect to the Columbia river treaty since January 1, 1963.


Mr. Pearson:: Mr. Speaker, the government is very anxious to give the hon. member all the information possible in respect of this matter. The motion as it is now worded, however, is of such a far ranging character it would be very difficult indeed to meet it. I wonder if the hon. gentleman would allow the motion to stand so that I may have a
Motions for Papers
word with him to see if it can be reworded or some arrangement made to enable him to get all the information he requires.


Mr. Herridge:: I am quite willing to agree to the suggestion of the Prime Minister. I am a most co-operative individual.
Motion stands.


ARMED FORCES
[Stage Direction]
Motion No. 94-Mr. Olson:
On the order:
That an order of the house do issue for a copy of all tests given to persons applying for a commission in the armed forces and more specifically those tests of a general nature that are used to evaluate personality characteristics, and intelligence levels.
Mr. Hellyer:: I wonder would the hon. gentleman agree to have this stand until I have a chance to discuss it with him.


Mr. Olson:: Yes.
Order stands.


COMPLAINT BY H. W. HICKS AGAINST SUN LIFE ASSURANCE CO.
[Stage Direction]
Motion No. 95-Mr. Thompson:
That an order of the house do issue for a copy of all correspondence and telegrams exchanged between the superintendent of insurance and Mr. H. W. Hicks, presently of 32 Queen's road, Horley, Surrey, England, relating to a complaint of the said H. W. Hicks against Sun Life Assurance Company of Canada.
He said: Mr. Speaker, I would ask permission to have this motion withdrawn from the order paper. It was through some error that it appeared today because I did receive the information that was pertinent to this, and had intended that it should be withdrawn before it appeared on today's order paper.
Order discharged and motion withdrawn.

[Stage Direction]
Motion No. 96-Mr. Soulham:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of all telegrams, correspondence, reports, briefs and memoranda, and any subsequent replies thereto between the federal government and any of its departments and the province of Saskatchewan concerning ARDA since April 22, 1963.
Bruce Silas Beer: Mr. Speaker, this motion is quite acceptable subject to the consent of the province of Saskatchewan being obtained to table the correspondence, reports and other documents requested.


Mr. Speaker:: The motion is agreed to, subject to the reservation expressed by the minister.


[Stage Direction]
Motion agreed to.
[Stage Direction]
Motions for Papers

[Stage Direction]
Motion No. 98-Mr. Martineau:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of all telegrams, correspondence, communications and other documents and replies thereto between the government of the United States of America, or any of its departments, and the government of Canada, or any of its departments, concerning the great lakes shipping situation and the proposed trusteeship of Canadian maritime unions since the 6th of July 1963.
Paul Joseph James Martin: Mr. Speaker, may I say with regard to this motion that to table all the confidential papers requested by the hon. gentleman would be both a departure from normal diplomatic usage and not in the public interest. As developments in this situation occur I am sure my colleague the Minister of Labour will continue to keep the house fully informed as he has done in the past.


Mr. Speaker:: I think it is important to put the motion first. Mr. Martineau, seconded by Mr. Winkler proposes:
That a humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of all telegrams, correspondence, communications and other documents and replies thereto between the government of the United States of America, or any of its departments, and the government of Canada, or any of its departments, concerning the great lakes shipping situation and the proposed trusteeship of Canadian maritime unions since the 6th of July 1963.


Mr. Martineau:: Mr. Speaker, in reply to the remarks made by the Secretary of State for External Affairs I would like to point out that the subject matter of this motion is not of a classified nature; and second, that naturally I would accept reservations such as if permission were to be obtained from the United States government for the production of such documents.


Mr. Speaker:: Is the motion accepted subject to those reservations?


Mr.   Marlin@Essex East: No, Mr. Speaker. I have indicated that this would be contrary to practice and it is not regarded as in the public interest by both governments concerned.


Mr.   Nesbill@: Why did you publish it then?


Paul Raymond Martineau: I stand by my motion.


Mr. Speaker:: Under the rules I must put the motion unless hon. members desire debate, in which case it is transferred.


Mr.   Marlin@Essex East: I desire to move that it be transferred.


Mr. Speaker:: It is so transferred.


LISTS OF CONSULTANTS FOR CABINET MINISTERS
[Stage Direction]
Motion No. 99-Mr. Orlikow:
That an order of the house do issue for a list of consultants prepared in the office of the Postmaster General for the guidance of cabinet ministers and copies of all correspondence between ministers of the crown and the consultants in each riding.
John Whitney Pickersgill: Mr. Speaker, I wonder could I raise a question of privilege with respect to this motion. I think Your Honour on reading it will see that the language of the motion is so obscure that it would not be possible for anyone reading the motion by itself-which is all that is before the house- to discern what the hon. gentleman was driving at. I have consulted the Postmaster General, who tells me that in his office no document of any description was prepared for the guidance of his colleagues, and therefore there could be no such document even if the motion were put.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I suggest in addition that if Your Honour would look at page 258 of May's fourteenth edition it would be apparent that the only kind of documents for which motions can properly appear on the order paper are papers and correspondence of a public and official character sought from government departments.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Whatever this purported document-this document that does not exist -might be, it obviously is not a document of a public or official character.


Mr. Diefenbaker:: Mr. Speaker, I am sure we would like to hear from the Postmaster General himself that he has not prepared such a list. He does not usually sit so quietly and taciturnly, and we would like to hear from him. The fact that it is a list makes it public, if it actually exists.


Mr. Speaker:: Is there any other hon. member who would like to speak to this motion?


Mr. Denis:: Mr. Speaker, the Secretary of State should know whether he has received such a list for his guidance, but I never sent out any list for the guidance of the Secretary of State or any other minister. It does not exist. Therefore I do not think we should answer in regard to something that does not exist.


Mr. Orlikow:: Mr. Speaker, I am surprised that we have-


Azellus Denis: Like anybody else, Mr. Speaker, I can have in my own office a list of my relatives, friends-


Some hon. Members:: Oh, oh.


Azellus Denis: Mr. Speaker, I challenge any member in this house to say that he has not a list in his own office for Christmas cards and other purposes.


Some hon. Members:: Oh, oh.


Azellus Denis: I challenge any member of parliament who does not know about the defeated candidates-


An hon. Member:: Here it is.


Azellus Denis: -and the Conservatives must have a long list of them.


Mr. Mandziuk:: What about your list in 1958?


Mr. Douglas:: Mr. Speaker, could I ask the minister whether it is possible to get on the list if one is not a relative?


Mr. Speaker:: Order. Are there any other hon. members who wish to help the Chair in this respect?


David Orlikow: Mr. Speaker, the other day when I put a similar motion the Secretary of State said he had no such list. I immediately took his word and withdrew my motion. But it has taken so long for the two ministers to say, or try to say, that there is no such list that I think we ought to discuss this matter further. I would therefore like to have this motion transferred for debate. I wish it were true that the house and the country could feel that this government had discontinued the practice of patronage that existed in the past.


Mr. Winkler:: But that is not so.


Mr. Speaker:: Order. The Secretary of State has raised a question of privilege which in my opinion is not a question of privilege. In anticipation of some advice from the house I took the trouble to prepare a few notes, and I think it might be useful if I put them on the record, with regard to the production of papers.
The general principle concerning the character of papers which may be asked for is set out in May's sixteenth edition, page 270, where it is stated:
Parliament is invested with the power of ordering all documents to be laid before it, which are necessary for its information.
Bourinot's fourth edition, at page 246, states in part as follows:
On the other hand, it is the constitutional right of either house to ask for such information as it can directly obtain by its own order from any department or officer of the government.
Obviously it is impossible for the Chair to scan every notice of motion for papers in an effort to determine whether or not such papers actually exist or whether the papers are in the nature of confidential documents.
Motions for Papers
Indeed there is no rule which states that confidential documents may not be asked for, and in some instances what are ordinarily considered to be confidential documents are tabled. At page 273 of May's sixteenth edition it is stated:
However ample the power of each house to enforce the production of papers may be a sufficient cause must be shown for the exercise of that power; and if considerations of public policy can be urged against a motion for papers, it is either withdrawn, or otherwise dealt with according to the judgment of the house.
Therefore it seems that the duty of the Chair in regard to motions for papers is to decide whether or not a motion is in order from a procedural point of view, and I am of the opinion that this motion is in order from this point of view. In this regard I would like to quote from a statement by Mr. Speaker Beaudoin which is found at page 3014 of Hansard, April 3, 1957. It reads as follows:
The motion that has been placed on the order paper is in order, and that is why I have put it to the house. It is opposed and when it is opposed, according to standing order 47 it must be transferred for debate if desired. This has not been asked for, but it has been asked that the minister should say briefly why he is opposed to the motion. At this moment, therefore, the only duty I have is to put the question to the house and let the house pass judgment on it.
In the same regard, at page 1036 of Hansard, July 11, 1958, Mr. Speaker Michener is reported as having used the following words:
Order. This motion is not debatable. It Is a motion for an order of the house to issue in respect of certain papers. It is not debatable, and the only course is to accept or reject the motion. I am advised by the Clerk that that is the method of disposing of such a motion as this. I ask, then, whether it is the pleasure of the house to adopt the same motion.
As will be seen in Hansard of February 15, 1960, page 1055, Mr. Speaker Michener held the view that his responsibility was to see that the motion was before the house in the proper form, but that the house had to decide by its vote whether or not the document was to be produced, and that it would be improper for the Speaker to substitute his decision for that of the house.
On February 27, 1961, as will be found at page 2442 of Hansard, Mr. Speaker Michener also stated that it was for the house to determine whether such a motion for the production of papers should be withdrawn or whether it should be passed.
Basing my action on those precedents, and on standing order 47, I propose to put the motion and allow the house to make a decision in regard to the production of the papers unless such a motion is either withdrawn, allowed to stand or transferred for debate.

Motions for Papers


John Whitney Pickersgill: Mr. Speaker, in view of what you have said the government is quite prepared to accept the motion and allow it to pass.


Mr. Speaker:: The hon. member has asked that the motion be transferred for debate. He has the right to do that. This is in conflict with the suggestion of the Secretary of State, and I would ask the hon. member to state his desire.


David Orlikow: Mr. Speaker, I would be quite happy if the motion were allowed to pass.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 100-Mr. Howard:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of all correspondence, telegrams or other documents exchanged between the government and any agency or branch thereof and any other government, organization or person since January 1, 1962, dealing with the proposal that another or second trans-Canada highway be built.
Mr. Deschaieleis:: Mr. Speaker, this motion can be accepted subject to the usual reservations with regard to personal and confidential documents, and the prior consent of the provincial governments concerned.


Mr. Speaker:: The motion is accepted, subject to the reservations as expressed by the minister.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 101-Mr. Howard:
That an order of the house do issue for a copy of all reports received by the government or any agency or branch thereof dealing with the grain elevator at Prince Rupert, B.C., since January 1, 1959.
John Whitney Pickersgill: Mr. Speaker, I wonder whether this motion could stand in the absence of the minister, and also No. 102?


Mr. Speaker:: Does the hon. member agree? Stand.
Motion stands.


TOBACCO ADVERTISING ON RADIO AND TELEVISION
[Stage Direction]
Motion No. 103-Mr. Knowles:
That an order of the house do issue for a copy of all correspondence exchanged between the Winnipeg school division No. 1 and the Minister of National Health and Welfare, dated since April 22, 1963, concerning the subject of tobacco advertising on radio and television.
Motion agreed to.

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to ask the Prime Minister whether, in view of the various difficulties which have arisen between the United States and Canada, he has given any consideration to inviting President Kennedy to Ottawa?


Lester Bowles Pearson: No, Mr. Speaker.


John George Diefenbaker: Then, Mr. Speaker, may I ask whether there have been any further attempts at conversations with the President since Sunday with regard to the difficulties about which the Prime Minister spoke at that time; and have there been any letters or communications received from the President showing the attitude or setting out the view of the United States toward the matters in respect of which the Prime Minister offered objection?


Lester Bowles Pearson: Mr. Speaker, there have been consultations between members of the two governments, but no further consultations between myself and the President in this matter since last Saturday morning.


John George Diefenbaker: Have any communications been received from the President or anyone on his behalf setting out his side of the picture?


Lester Bowles Pearson: No, Mr. Speaker.


[Stage Direction]
On the orders of the day:
Mr. Henri Lalulippe (Compton-Frontenac):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs?
In view of the telegram that the Cuban Red Cross recently sent to the American Red Cross, calling it hypocritical in its offer of aid following hurricane Flora, can the minister tell us what kind of reception the Canadian offer got in Cuba?


Paul Joseph James Martin: Mr. Speaker, I did not understand the question very well, but I shall try to answer tomorrow or Monday next.


Paul Joseph James Martin: Mr. Speaker, may I revert to the question put to me by the hon. member for Compton-Frontenac (Mr. Latulippe)?

In reply to his question, I may say that there was no reaction at all from the Cuban government.



PRIVILEGE


Louis-Philippe-Antoine Bélanger: Mr. Speaker, I wish to raise a question of privilege about a statement made yesterday by the hon. member for Mercier (Mr. Boulanger) who is also chairman of the committee on railways, canals and telegraph lines.
After mentioning my name, in the course of his remarks, as reported on page 3578 of Hansard for October 15, 1963, the hon. member said:
Even with a continuous interpretation service, they did not deem it advisable to attend the committee for more than ten or fifteen minutes.
Mr. Speaker, I wish to point out to the hon. member for Mercier that I arrived at the committee meeting at ten o'clock and left at 11.30 to attend a meeting of another committee. In my opinion, I was there more than 15 minutes.
The second part of my point of privilege concerns the following remarks made by the hon. member for Mercier:
I therefore raise a point of privilege in connection with this lack of responsibility-
Mr. Speaker, I feel that the most responsible is certainly not the hon. member for Mercier who does not seem to know that there are 90 minutes in an hour and a half and not only 15 minutes.


Gilles Grégoire: He should resign as chairman of that committee.


Mr. Speaker:: I do not like to lecture the house, but I doubt very much whether that is a question of privilege.


Gilles Grégoire: He should resign as chairman of the committee.


Mr. Speaker:: It is more in the nature of a complaint.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I should like to ask a question of the Minister of Justice. Has he received the report from the special counsel who were appointed by the government to investigate the possibility of legal charges arising out of the
Inquiries of the Ministry Norris report and, if so, has the government arrived at a decision in this regard?


Lionel Chevrier: Yes, Mr. Speaker. As I have already indicated,
I have received a preliminary report which we are still studying, and the result will emerge in due course.



WHITE PASS AND YUKON RAILROAD


[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: I have a question for the Minister of Labour. In view of the fact that labour difficulties continue to shut down the operations of the White Pass and Yukon route in the Yukon and the operation of their motor vessel, the Rogers, and the growing economic difficulties this is causing, can he state whether he is taking any action to have his officials assist in negotiating a settlement of these labour problems?


Hon. A. J. MacEachen (Minisier of Labour):: Mr. Speaker, I have nothing to add to the report I made to my hon. friend some days ago on this matter.


Erik Nielsen: I have a question related to the one I asked the Minister of Labour a moment ago and which I shall direct to the minister of northern affairs. In view of the fact that the railroad is not running into the Yukon territory, can he say whether the offer of Governor Egan or his officials to keep the Haines road open this winter will be accepted by the government?


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: As my hon. friend knows, all these matters are under discussion.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to ask the Prime Minister whether he will consider introducing fairly soon the motion on the order paper dealing with the setting up of a parliamentary committee to review the procedures of this house in order to bring about a more businesslike transaction of public affairs. I know the Secretary of State has already indicated that the government would be prepared to do so if he could get some guarantee that there would be no debate. My question to the Prime Minister is, would he be prepared to consult either through the house leader or with the leaders of the various
3630	HOUSE OF
Inquiries of the Ministry parties to see whether we cannot get agreement, if not to having no debate then to having some limited period of debate, so the committee could be set up and we could bring about a more efficient dispatch of the affairs of this House of Commons?


Lester Bowles Pearson: Mr. Speaker, I agree entirely with the hon. gentleman that the setting up of this committee for the purpose which he has mentioned is highly desirable. I hope that as a result of the kind of consultation he has suggested difficulties in the way of setting the committee up with a minimum of debate can be overcome and the committee set up this week.


John George Diefenbaker: So that there is no misunderstanding as far as the opposition are concerned, we would welcome any action in this regard; however, not without debate. We want to place before the house our views so as to be helpful to the committee. There is just one matter I might mention, in connection with voting procedure. I think consideration might well be given to a practice which would save a great deal of time.


Some hon. Members:: Order.


John George Diefenbaker: If we were able to follow the system in the United Kingdom of going into-


Some hon. Members:: Order.


John George Diefenbaker: I am trying to expedite the business. I said that we could arrive at a point where we would save a great deal of time voting by going into our respective lobbies. That is one suggestion which would save time, time which today is unnecessarily wasted. Anything which can be done in that connection would certainly receive our support now.


Lester Bowles Pearson: The right hon. gentleman apparently agrees to the setting up of this committee. I would hope that it could be set up at once, that debate could take place in the committee, and then the committee could report back to the house and the house could debate the report of the committee.



TRANS-CANADA AIR LINES INQUIRY AS TO PURCHASE OF CARAVELLE PLANES

[Stage Direction]
On the orders of the day:
Mr. Guy Rouleau (Dollard):: Mr. Speaker,
I should like to direct a question to the Minister of Transport. Is the minister in a position to make a statement on the acquisition by Trans-Canada Air Lines of a new aircraft type in light of the reported statement 

by the Quebec minister of national resources regarding the Caravelle?


George James McIlraith: Mr. Speaker, I have received no report or recommendation from Trans-Canada Air Lines on this subject, and until such report or recommendation is received the matter cannot be considered by government.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I should like to direct a question to the Secretary of State.
Following the promise he made in the house in the last days of July that a survey would be made on biculturalism in all departments of the federal government, can the Secretary of State indicate the progress of that survey and tell us whether he has a preliminary report to give us in relation to that survey?


John Whitney Pickersgill: Mr. Speaker, I have been advised by the civil service commission that the document to which the hon. gentleman referred on August 1, I think it was, a document which would be submitted both to the royal commission and to this house, is in course of preparation at the present time. I have also indicated to the civil service commission that any preliminary information which could be made available to the house would be most welcome, and I am very hopeful that they will be able to give us some information before very long.


Gilles Grégoire: A supplementary question, Mr. Speaker. Can the Secretary of State tell the house whether information requests have been sent to all members of the federal civil service, and whether the replies to those information requests are now in the hands of the civil service commission?


John Whitney Pickersgill: That is a question I would have to put to the chairman of the commission. I shall be glad to do so and give an answer as soon as possible.



ESTABLISHMENT OF OFFICE OF QUEEN'S PUBLISHER

[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct a question

related to a speech made yesterday by the man who may be associate minister of agriculture, on the matter of the queen's printer and the queen's publisher. Can the Minister of Industry explain the fact that the speech as reported indicated that there now is the office of queen's publisher, yet today I received answers to a number of questions which suggest that the office has not yet been created?


Charles Mills (Bud) Drury: Mr. Speaker, the answer to the question is correct. I have not seen the report to which the hon. member makes reference, but if in fact it was reported that there was an office of queen's publisher that report is incorrect.



RESOURCES


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I wish to direct a question to the Secretary of State for External Affairs, and ask him whether his attention has been drawn to the statement made yesterday by the secretary of the interior of the United States to the effect, as I understand it, that consideration is being given to the creation of a gigantic pool of resources. Has there been any discussion between the governments of Canada and the United States in this regard? Furthermore, what progress has been made in relation to the United States market price for Canadian electric power to be generated as a result of the prospective Columbia river development, to which Mr. Udall also made reference?


Paul Joseph James Martin: The Leader of the Opposition may recall that in the communique following the meeting between the President of the United States and the Prime Minister of Canada reference was made to the desirability of studying co-operation in the rational use of the resources of this continent. Also, a short time ago when my colleague the Minister of Trade and Commerce was in Washington, progress was made in discussions between the two governments concerning the undertaking of joint studies to determine to what extent an exchange of energy resources would be beneficial. At the recent ministerial meeting in Washington between Canadian and United States ministers this subject was discussed in a general way.
With regard to what the U.S. secretary of the interior had to say about the Columbia river development, I can only comment that if what he said was correctly reported, then he fully expects that a satisfactory price will
Inquiries of the Ministry be paid for the purchase of the downstream benefits. This will indeed be welcome news. One of the essential conditions of the Canadian position, supported, of course, by the owners of the resource, British Columbia, is that the price paid for these benefits must be commensurate with the value of the transaction and the interests of Canada.


John George Diefenbaker: I thank the hon. gentleman for his answer, and I would ask him if he was referring to the communique issued after the meeting on May 11 between the President and the Prime Minister, which was supposed to herald the arrival of a new heaven and a new earth in Canadian-American relations?


Mr.   Marlin@Essex East: I was referring to that communique, which is one that marked a most constructive and important exchange between the heads of two countries which are dedicated to the mutual interests of their peoples and the cause of peace in the world.



TRANSPORT


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, my question is intended for the Minister of Public Works.
Has he received some representations concerning the construction of a tunnel between Quebec city and Levis? If so, what action has the department taken in connection with this request?


Mr. Speaker:: This, surely, is a question for the order paper.



LEAKAGE BY U.S. OF CONFIDENTIAL INFORMATION

[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, I should like to return to a subject which I have raised several times previously in the house. In the absence of the Minister of Trade and Commerce, I should like to direct my question to the Prime Minister.
In view of the continued leakage of confidential information from the Canadian wheat board to the United States public by officials of the United States government, would the Prime Minister consider asking the Minister of Trade and Commerce to accept the suggestion I made last week that a telephone call, or some form of protest, be made to the hon. gentleman's counterpart in the United States

Inquiries of the Ministry so as to prevent if possible this continued harmful leakage of confidential information -information which was only supplied after a solemn agreement between the two countries that it would not be disclosed?


Lester Bowles Pearson: I will be glad to take this matter up with the Minister of Trade and Commerce, though I am confident that he has already been in touch with his counterpart in Washington on this matter.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: I wish to address a question to the Prime Minister. I apologize for not having given him notice, but the matter cropped up just before I came into the house. My question is based on the interest and concern shown by some well known people in Canada with regard to agricultural policy.
I ask the Prime Minister whether, in the spirit of fair play, he can inform the house as to the nature of the business which the Minister of Agriculture and his alter ego, the expectant Minister without Portfolio, considered so much more important than the debate and the votes on agricultural policy that they found it necessary to be absent for such a considerable time during the debate yesterday.


Lester Bowles Pearson: The Minister of Agriculture and his associate, having taken part in this debate on agriculture, left the house to attend engagements previously undertaken for the Minister of Agriculture with farmers of Canada in the west. They got in touch with the grass roots while the hon. member remained in the house.


Mr. W. H. Jorgenson (Provencher):: I should like to direct a supplementary question to the Prime Minister. Can he explain why, for a period of approximately one and a half hours yesterday afternoon in the course of that debate, there was not one single minister in this house?


Lester Bowles Pearson: That statement is incorrect. Therefore I do not have to explain it.


Mr. L. E. Cardiff (Huron):: I should like to make this statement: yesterday, from five minutes to five until twenty minutes after five there were no ministers in this house. I should like somebody to get up and deny that.


John Whitney Pickersgill: I shall do so immediately. I was in the house myself.


Some hon. Members:: No.


John Whitney Pickersgill: I looked at the clock as I went out. It was two minutes to five, and at that time the Minister of Justice, the Minister of Public Works and the Postmaster General were all in the house.


Mr. Maclnnis:: On a point of order, Mr. Speaker-


Mr. Speaker:: Order. I am quite able to hear when an hon. member speaks to a point of order, but there is such a thing as allowing a minister to complete his statement. I am sure that 30 seconds more and a little courtesy would be very much appreciated. The question period is turning into a debate, particularly on this issue, and it seems to me that the word of a minister should be accepted, especially in these circumstances.


Some hon. Members:: Oh, oh.


Donald MacInnis: On the point of order-


An hon. Member:: Louder.
Another hon. Member: They are trying to howl you down. That is the way they do it.
Another hon. Member: How about courtesy now?


Mr. Knowles:: Order.


Donald MacInnis: Mr. Speaker, on the point of order, I am not aware of anything in the rules of the house that distinguishes a backbencher from a cabinet minister, and if the house is going to maintain the order you wish I say, as I said before, that no speaker, minister or not, is entitled to rise in his place and have the advantage of saying something in the house without first receiving recognition from you. Box scores are becoming very popular these days, and I am keeping one on the Secretary of State. It would surprise you very much, Mr. Speaker, to find how often he is getting away with rising to speak without recognition.


Mr. Clement Vincent (Nicolet-Yamaska):: Mr. Speaker, I should like to put a question to the Secretary of State.
Could the minister tell us whether himself or one of his colleagues were in the house when I said yesterday in French and in English, as reported on page 3596 of Hansard:
There is not one minister in the house: not one.
I said that yesterday in French and in English in the course of my speech.


John Whitney Pickersgill: I apologize to the hon. gentleman, but I was not paying attention to his speech.


Clément Vincent: I rise on a question of privilege, sir. When I spoke yesterday I said at that time there was not a minister in the house. What I said was true. The Secretary of State has no right to say I was wrong when I said yesterday no ministers were in the house when I was speaking.


Lionel Chevrier: Mr. Speaker, the statement made by the last speaker is entirely inaccurate. I was in the house at my place during a large part of the time the hon. member was delivering his speech.


Mr. L. J. Pigeon (Joliefte-L'Assomplion-Montcalm):: On this same matter, Mr. Speaker-


Mr. Speaker:: Order, please.


Louis-Joseph Pigeon: The hon. member for Argen-teuil-Deux-Montagnes (Mr. Drouin) confirmed this fact in the official report.


Mr. Speaker:: Order. I am sure all hon. members will agree we have discussed this question sufficiently. The hon. member for Elgin.


Mr. J. A. McBain (Elgin):: I had a question for the Minister of Agriculture which I was going to direct to the Prime Minister. However, because of the lateness of the hour and the short sitting day, and in view of the fact the minister will be back tomorrow, I will hold my question until then.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, my question is intended for the Minister of Labour.
I have received many letters and resolutions from municipalities protesting against the decision of the government to shorten the period for winter works and as the northwestern area of Quebec has a very cold climate in addition to being recognized as a depressed area, would the minister reconsider the possibility of setting the winter works period as before, namely from October 15 to May 30, 1964?


Mr. Speaker:: May I suggest this is a question for the order paper.
Inquiries of the Ministry


Gilles Grégoire: Mr. Speaker, I rise on a point of order with respect to the question of the hon. member for Chapleau (Mr. Laprise) which you had put on the order paper. He was asking that the winter works period start on October 15. But yesterday was October 15. Therefore, I feel that this question is urgent and that the Minister of Public Works (Mr. Deschatelets) should have the opportunity to state his position on that issue. [Text]


Mr. Speaker:: May I point out to the hon. member that it is, I hope, a well established custom, within reason, that when the Speaker decides that in his view a question should go on the order paper, that ends the matter. In particular reply to the point the hon. member has raised, may I say that the same question has been asked once or twice before, I think, and the Minister of Public Works is certainly aware of the urgency of the matter. I am sure that allowing the hon. member to state his question at length, as he did, will impress it even more on the Minister of Public Works.



DAUPHIN, MAN.    BENEFITS FROM INCLUSION AS DESIGNATED AREA

[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to direct a question to the Minister of Labour in relation to the recently announced designated areas, and with particular reference to Dauphin, the sole area in Manitoba which has been classed as a designated area. Can the minister say whether any benefits which may accrue under this legislation will apply to the municipal district of Dauphin or to the district which normally comes within the administration of the Dauphin branch of the unemployment insurance commission?


Allan Joseph MacEachen: Mr. Speaker, I will be glad to answer that question in detail if it is placed on the order paper.


Robert Simpson: A supplementary question on the same subject to the Minister of Industry. On October 3 in answer to a question of mine in relation to designated areas the minister stated that the department would consider holding consultations with the Indian affairs branch in relation to setting up certain Indian reserves as designated areas. Can the minister say whether any such consultations have taken place yet?


Charles Mills (Bud) Drury: Mr. Speaker, the consultations are not complete.

Inquiries of the Ministry HEALTH AND WELFARE



INQUIRY AS TO COMMITTEE ON USE OP TOBACCO

[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. When does the minister intend to set up the committee to look into the harmful effects of tobacco as claimed by the hon. lady?


Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: As has happened more than once in the past, the hon. member is mistaken in his facts. There was never any suggestion that a committee of this house should study smoking. There is, however, to be a national conference on this subject, the date of which has been announced. Representatives of all bodies likely to be interested have been invited. A number of briefs have already been received from those invited and they are being circulated now. I think the date is November 25-27 inclusive.



FAMILY ALLOWANCES


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquette (Lotbiniere):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare.
In view of the pressing needs of a great number of Canadian families and in view of the fact that the party in office always goes ahead in the matter of social legislation, I should like the Minister of National Health and Welfare to tell the house whether she intends to amend the family allowances system in order to bring in supplementary benefits, to be paid to the beneficiaries of those allowances.


Gilles Grégoire: That is what we have been asking for all along.


Mr. Speaker:: This is a question for the order paper.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a question for the Secretary of State for External Affairs which I at least think is of some importance to Canada as well as to the whole world. Has the minister

any comment to make in respect of the announcement that the Soviet union and the United States government have agreed to support a United Nations resolution to ban nuclear weapons from space?


Paul Joseph James Martin: Mr. Speaker, I think we will all agree that this is an important matter and the hon. gentleman need not apologize for putting the question. The proposal now embodied in a resolution presented by the United States, and which according to reports, Mr. Gromyko says will be supported by the Soviet union, provides for the banning of nuclear weapons in outer space. This is a proposal that will be welcomed by Canada and will be welcomed, I am sure, by all countries at the United Nations. It is a proposal that was put forward earlier in the 18 power disarmament conference at Geneva.
I hope we may conclude from this further agreement that we have an additional indication of the extent of the detente between east and west at the present time.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, I should like to address a question to the Secretary of State. In view of the fact that the municipal elections in Edmonton are over, perhaps it would now be possible to comply with the order of the house, No. 55, for the production of papers which was passed on July 24.


John Whitney Pickersgill: Mr. Speaker, I will be very glad to make an inquiry and let the hon. gentleman know at the first opportunity.


Mr. Speaker:: The hon. member for Me-gantic.


John George Diefenbaker: Mr. Speaker, would the Secretary of State be prepared to table in the house a list of the various questions-


Some hon. Members:: Order.


Stanley Howard Knowles: I rise on a point of order.


John George Diefenbaker: -that have been-


Some hon. Members:: Order.


Mr. Speaker:: Order.


Stanley Howard Knowles: Mr. Speaker, a number of times the hon. member for Cape Breton South has raised the question of people speaking only when they are recognized. You, sir, recognized the hon. member for Megantic. Why is he not allowed to speak? Why does

the Leader of the Opposition get in after an hon. member has been recognized?


An hon. Member:: Where is the box score?


John George Diefenbaker: Mr. Speaker, I thought you recognized me. You looked in my general direction.


Some hon. Members:: No.


John George Diefenbaker: Mr. Speaker, these
people in the government do not want me to speak any more.


Some hon. Members:: Oh, oh.


John George Diefenbaker: I bow immediately to the point of order. I thought you recognized me. I am very sorry that I stood up, but I was continuing along the line of the question that had been asked.


Mr. Speaker:: I think we have had enough points of order for the next few minutes. The hon. member for Megantic.


Mr. Valade:: Mr. Speaker, I rise on a point of order. I believe I am entitled to raise a point of order as much as the hon. member for Winnipeg North Centre. Many times in the house, out of sheer courtesy, members of the official opposition have given up their place to the leader of the New Democratic party and I think the Social Credit party should do the same thing in the case of the leader of the official opposition.


Mr. Langlois:: Mr. Speaker, if the hon. member for St. Mary wants that courtesy I think he should at least ask for it.


John George Diefenbaker: When I was interrupted on a point of order I was asking the Secretary of State if he would give consideration to tabling a list of questions which had been made orders for returns and which had not yet been brought down.


John Whitney Pickersgill: I shall be glad not only to table a list of those questions that have been made orders for returns which have not been complied with as yet, but the orders of the house as well, so there will be a complete picture of those things that have not yet been done.



INDUSTRY


[Stage Direction]
On the orders of the day:
Raymond Langlois: I should like to direct my question to the Minister of Industry. On Monday the Minister of Labour gave a report concerning regions in which unemployment was most felt. In view
Inquiries of the Ministry of the fact that Thetford Mines is one of these regions, and in view of the fact this region has the world's largest asbestos deposit, will the minister consider the possibility of establishing asbestos industries in this region so that we can turn the raw material into finished products at home and, in so doing, decrease unemployment in that area?


Mr. Speaker:: Will the hon. member put that question on the order paper?



REPORTED INTENTION TO ABOLISH CANADIAN COMMERCIAL CORPORATION

[Stage Direction]
On the orders of the day:
Georges-J. Valade: Mr. Speaker, may I ask the Minister of Industry a question?
Could the minister inform the house whether he intends to eliminate the Canadian Commercial Corporation, a crown corporation, by making it part and parcel of the Department of Industry?


Charles Mills (Bud) Drury: The answer is no, Mr. Speaker.



NOVA SCOTIA


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: I have a question for the Prime Minister. On September 30 I posed a question to him concerning the location of a heavy Water plant in Nova Scotia. He very kindly replied that urgent consideration was being given to this very important question and a decision would be announced shortly. I wonder if the right hon. gentleman is now in a position to enlighten us further on this rather urgent matter?


Lester Bowles Pearson: No, Mr. Speaker, I am sorry I am not in a position to announce a decision at the moment. I hope to be able to do so very shortly.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: In view of the interesting revelations earlier by the Secretary of State and the Postmaster General, I wonder if I could ask the Postmaster General if he would agree to referring the estimates of his department to the appropriate standing committee?


Azellus Denis: Mr. Speaker, I suggest that such a question

Income Tax Act
should not go to a special committee on estimates. If the hon. member will be good enough to remind me when my estimates are under consideration, I shall be glad to answer every question he may ask.


Frank Howard: I wonder if the minister would mind if I reminded him every day of this request to refer the estimates of his department to a committee, so that we could get at the facts?


Gilles Grégoire: Mr. Speaker, may I ask a supplementary question?
Can the Postmaster General assure the house that there are only members of the house on that special list of people?


Azellus Denis: Mr. Speaker, I would even add that the name of the hon. member for Lapointe appears on the list.


Gilles Grégoire: I am pleased to hear that my name appears on the list, but, at the same time, I should like to be consulted sometimes.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Before the orders of the day are called, Mr. Speaker, may I say that I had consultations yesterday with representatives of hon. gentlemen opposite and there seemed to be a disposition at that time, in view of the important debate now coming up and the desire to let as many members as possible participate today, to forgo the private members' time today. If that was the sense of the discussion, perhaps it could be settled now so that we would know how to proceed.


Mr. Churchill:: We agree.


Thomas Clement (Tommy) Douglas: This group is agreeable. [Translation]


Gilles Grégoire: We agree, Mr. Speaker. [Text]


Mr. Speaker:: I take it that rarely have we had such unanimity.



INCOME TAX ACT

Hon. Waller L. Gordon (Minister of Finance) moved: the second reading of Bill C-95, to amend the Income Tax Act.
He said: Mr. Speaker, like other acts to amend the Income Tax Act, this bill is rather long and complex. It is based upon the very detailed resolution that was approved by the house on July 23.

It does not contain anything new, other than a very few refinements of a technical nature, which I shall point out when we come to the discussion of the bill clause by clause; and it does not include anything of a contentious nature that was not debated fully in July. The proposed amendments follow the order of the original act, but taken as a whole, with one or two exceptions, they fall into three main categories.
First there are amendments to close loopholes in the act. Second, there are amendments to provide incentives to industries which are intended to raise the level of production and employment in certain areas of slower growth. Third, there are changes in non-resident withholding taxes designed to reduce the cost of borrowing abroad, and to provide incentives to the foreign owners of Canadian subsidiaries to take in Canadian partners in the years to come.
The exceptions that do not fall into any of these three categories include a proposal which will require corporations to pay their taxes over a period that is more comparable to the payment time table for individuals than at present, and a clause to deal with taxations of estates in bankruptcy. I shall go into these items fully when we come to the respective clauses in the bill.
First I should like to say something about the proposals contained in the first of the three categories mentioned, that is, those that are designed to close tax loopholes. The public, including the business public, tends to lose respect for any tax administration when advantage can be taken freely of obvious loopholes in the law. When the royal commission on taxation submits its report it may be desirable to make extensive changes in the taxing statutes. In the meantime it seems desirable to stop some clear opportunities for tax avoidance, and I should like to mention four examples of what it is intended to do about them.
First it is proposed to discourage the widespread practice of gaining a tax advantage through the operation of lease-option arrangements. Under the present law, taxpayers who have entered into lease-option agreements are allowed to deduct from their taxable income capital cost allowances which sometimes greatly exceed both the amount of the annual rentals and the actual cost of the properties concerned. The joint tax committee of the Canadian Bar Association and the Canadian Institute of Chartered Accountants has advocated for some time that action should be taken to prevent this.
The second example that I would like to mention is the one that at present provides an opportunity, under the act, for companies which incur losses in one year to carry them

forward and apply them against profits earned during subsequent years.
As a result of this, a practice has developed of trafficking in the shares of companies whose businesses have been discontinued, but which technically have certain tax loss carry forward entitlements. For example, a man with a profitable business may purchase the shares of one of these companies and transfer his prosperous business to it, and having done so he can apply the losses incurred previously, and often in a quite different class of business, against the taxable income of his own business. I suggest that surely this was never the intention of parliament when the original proposal was incorporated in the act, and that this practice should be stopped.
The third and rather glaring example of a tax loophole-and one that has been much talked about-is known as dividend stripping. In the normal course when a company pays a dividend to its shareholders who are individuals, the dividend is taxable in the hands of the recipients. However, in the case of closely held companies it is possible for the shareholders, through a series of transactions often involving the incorporation of one or more new companies, to withdraw the surplus of the original company without payment of any tax. This also is a widespread practice which should be stopped.
A fourth example of ways in which taxes can be avoided or reduced arises because of the lower rate applicable to the first $35,000 of taxable corporate income. A practice has developed of dividing a business enterprise between a number of associated companies, each one of which individually obtains the benefit of the lower rate of taxation.
Mr. Speaker, I do not criticize those who have taken advantage of these loopholes in the past, nor those officials who are responsible for administering the law in its present form. However, I do suggest that when loopholes of this kind are brought to our attention it is the responsibility of parliament to deal with them, and in doing so I do not suggest that any of the necessary amendments should be made retroactive in their effect.
In two cases, that is, in connection with dividend stripping and with associated companies it is proposed that the minister be given some discretion, subject however to the right of appeal either to the tax appeal board or the Exchequer Court. No one likes giving ministers discretion in these matters, and least of all, if I may say so, the minister who is responsible for administering the act; but we have not been able to find any alternative solution pending completion of the
Income Tax Act
studies being undertaken by the royal commission on taxation.
Following receipt of the report of that commission I would hope that the limited ministerial discretion now recommended could be dispensed with, and I may say that in conversation with the chairman of the royal commission I have said that, if it is possible for him to let us have a report on this particular subject, ahead of his main report, it would be very useful to the administration.
The second category of amendments to which I referred earlier provides incentives for increased production and increased employment in certain designated areas which, for one reason or another, have not enjoyed as rapid a rate of growth as others. It is proposed that new manufacturing or processing enterprises located in designated areas of slower growth be exempted from income tax for three years, if any such new enterprise begins commercial operations within 24 months of the date of enactment of this bill.
Such enterprises will be entitled to write off new machinery and equipment in as little as two years, and new buildings over a period of five years; and they may defer this writeoff rental after the expiry of the three year tax exempt period. These are very substantial incentives. It is hoped that they will induce new businesses to locate in areas which for some years have lagged behind the rest of Canada in their development and in employment opportunities. Considerable success has been achieved in other countries by offering inducements to companies to locate in areas of slow growth. I could mention quite a number of them, but I am hoping that the hon. member for Northumberland (Miss Jewett), who has made a study of the subject, will have something to say about it in the course of the debate. I am sure she will be able to do so much more ably than I could.
The third category of amendments to which I referred earlier has to do with the proposed changes in the rates of withholding taxes. There seems to be general agreement on this. We must give priority in all our economic policies to measures that will bring our international transactions on current account into better balance; and, as has been stated on other occasions, the government is determined to do just that. As I say, I think most people in this house and the public generally will agree with this objective. However some people do not accept, or do not accept fully, some of its implications; they seem to think it is a mistake to make any changes in established ways of doing business. But surely, Mr. Speaker, there is no

Income Tax Act
excuse for Canadians any longer to refuse to face the situation with which we are confronted. We simply must reduce our vulnerability to fluctuations in the international flows of capital. We cannot count on continuing to borrow abroad to pay our bills. We simply must bring our international transactions more nearly into balance. This really means that somehow or other we must secure a larger share of the North American market for our products.
As everybody knows, we have a surplus on current account with the rest of the world, and if we are to bring our international accounts into balance we must look to the North American market as the place for increased exports. If we are to do this, we must strive, among other things, to increase our exports of certain manufactured goods. We all know this is not going to be easy. We know that some 60 per cent of Canadian manufacturing is controlled by people who reside outside our borders, and we know that the corresponding percentages of absentee ownership for mining and refining are higher, and that for the petroleum industry it is higher still. We know also that a much higher proportion of our industry is controlled by non-residents of our country than is the case in any other country in the world.
A number of countries impose restrictions of one kind or another upon foreign participation in resident corporations and upon inflows of foreign capital. These include such countries as Sweden, Japan, India, Mexico, Britain to some extent, Switzerland and France. I think everyone will agree that in Canada we have gained a great deal from the parent-Canadian subsidiary company relationships that are so prevalent. This has meant access to new developments, to management know-how and to research facilities. But these parent-subsidiary relationships are a source of real difficulty when it comes to our objective of increasing exports, or even to reducing imports, especially of manufactured goods. This is particularly true in some cases where the Canadian subsidiary is wholly owned by a single foreign company. Often the managers of such subsidiaries have no real authority. The important decisions are made by the parent company. Understandably, the top officials of the parent company set their sights on increasing the volume of business and the profits of the total enterprise. It would be unreasonable to expect them to give the special requirements of the Canadian economy undue priority. It would be unreasonable to expect officials of a parent company, for example, to encourage their Canadian subsidiary to compete with its parent in the parent company's home markets or in other countries in which the
parent company is interested, unless there were clear price and profit advantages in so doing.
It is significant, I think, that people who are connected with partially owned Canadian subsidiaries generally consider that having minority shareholding interests is a good thing for Canada. The managers of these companies usually have more autonomy, and apart from that they must keep in mind the best interests of all their shareholders and not just the largest one. In such cases the Canadian partially owned subsidiary is more likely to be allowed to do things that are in the best interests of our country. This is not always true, but I think it is a reasonably valid generalization.
In the budget speech I outlined the views of the government on how harmonious relations with foreign investors can best be preserved. Amongst other things, I referred to the desirability of foreign investors selling minority interests in their enterprises to Canadians and electing a number of independent Canadian directors to represent these interests. I pointed out, of course, that not even a 25 per cent interest in most new or existing enterprises is something that could be realized overnight. It is an objective to be worked towards over a period of years; and when I say that, I mean quite a long period of years.
There was nothing very new in the code of desirable behaviour that I suggested. The same sort of thing has been said by successive governments. But the ever increasing upward trend in foreign ownership of Canadian companies continues. I suggest to hon. members in all seriousness that the time has come when something more than words is needed.


Some hon. Members:: Hear, hear.


Walter Lockhart Gordon: To this end the bill includes some incentives and some gentle pressures to broaden the base of ownership of Canadian companies gradually and moderately over a period of years. I have suggested already that I believe this would be helpful in achieving the objective of increasing exports or to some extent replacing imports through Canadian production, and thus reducing the current account deficit in our international transactions.
It has been rightly stated that Canadians are not in a position to purchase a quarter interest in all the Canadian subsidiary companies of all foreign corporations, even if they wished to do so. The necessary capital is not available, that is true; but no one has suggested that such a move would or should take place overnight or that in practice the owners of all Canadian subsidiaries would be willing to make some of their shares

available. What has been suggested is merely that it would be a good thing if over a period of years there was a greater opportunity for some kind of partnership in the direction of companies that conduct their business in this country, and in this way more autonomy for local management.
There is nothing very harsh or punitive in the measures now suggested. To begin with, it is proposed to exempt certain institutions- pension funds are an example-from the nonresident withholding tax on interest payments in connection with new issues of securities. I should have made it clear that I refer to certain institutions outside Canada. The reason for this, of course, is that if these institutions, such as foreign pension plans, can buy our bonds without paying a tax to the Canadian treasury, they are more likely to do so. This will broaden the market for Canadian bonds, and it will also reduce the cost of borrowing by Canadians, when this becomes possible once again, and help to keep interest rates down.


Thomas Clement (Tommy) Douglas: Will this apply only to bonds or will it also apply to equity securities?


Walter Lockhart Gordon: I am only talking about bonds. I am talking about broadening the market and reducing the cost of borrowing, when this becomes possible once again, and also borrowing abroad once again. Because as all hon. members know, until the legislation dealing with the U.S. interest equalization tax is passed by both houses in Washington there is a virtual shutoff of all borrowing by Canadians in the New York market.
The non-resident withholding taxes on dividends would be reduced from 15 per cent to 10 per cent where foreign parent companies make it possible for Canadians to acquire a small minority interest. The withholding taxes on dividends payable by companies which, for one reason or another, do not wish to do this will be increased from 15 to 20 per cent, but this increase will not go into effect until 1965. I suggest to hon. members that to do less than this by way of incentive or by way of a mild push would surely mean that we did not take this matter seriously. If we mean business Canada must gradually take whatever steps are necessary, even if such steps are not popular in all circles, to regain a greater measure of control over her own economic affairs, including the policy decisions of Canadian corporations. If we do not do this, Canadians may well wake up some day, and perhaps sooner than they think, and find that they have lost control not only of their economic destiny but of their political destiny as well.


Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to say a few words
Income Tax Act
on this bill before it goes to committee and is discussed clause by clause. I would remind the Minister of Finance (Mr. Gordon) that just about one year ago when he sat on this side of the house, namely on November 15, 1962, he then said, as reported at page 1654 of Hansard:
A complete revision of the Income Tax Act is overdue, and I think most hon. members of this house would agree. I hate to think that it is going to be postponed for several years pending the report of the proposed royal commission on taxation.
Then the minister went on to express his regrets at the illness of Mr. Carter, the chairman of the commission. The minister then continued:
However, if the government knows what its objectives are, may I suggest that it should not be difficult for a small group of lawyers and chartered accountants who are familiar with taxation matters to draft a new act in a relatively short time without waiting for the report of the royal commission.
The minister now sits on the other side of the house. He has had the opportunity now to do just what he suggested, but he has brought forward very little except certain amendments to the Income Tax Act, the same as was done last year. He has also said, as he said then, that the Income Tax Act is too complex, too complicated; that it is difficult to understand and there are too many loopholes in it. I could not agree more with him in this respect. As a layman, as a businessman, I find the Income Tax Act and its amendments passed from year to year becoming more complex and difficult for the layman to understand. And here we are, going along the same way, adding more amendments to the act and making it more complicated as time goes on. However, I compliment the minister on closing up some of the loopholes he mentioned, and I think a government is just as responsible as the person who takes advantage of these loopholes, for not having closed them up before they were taken advantage of.
I should like to address my remarks to one section of the act in particular, namely section 16. This is mentioned in the remarks of the minister in the paragraph headed "incentives to industries". As I understand it, the government proposes to give certain substantial concessions to a company which creates a new industry in a designated area. These concessions are threefold. First, these industries will be given a three-year tax holiday from income tax. Second, they will be given a 50 per cent write-off on new machinery which can be completed over a period of two years. Third, they can have

Income Tax Act
a 20 per cent write-off on new equipment and this can be completed over a five year period. I say that these are very substantial incentives, so much so that they have caused great interest and aroused a great discriminatory feeling in the particular area of the country from which I come, southwestern Ontario.
My criticisms on clause 16 are these, and I will try to bring them to the attention of the house without referring to the specific wording of the bill or the clause concerned. This, no doubt, will be done by other speakers in the committee stage. My first criticism would be that this clause is discriminatory. It is discriminatory in its effect because this government did not give sufficient study or attention to working out this incentive program before it was introduced. They did not realize the consequences and the implications of giving this incentive to one particular area in a heavily industrialized region.
When previously discussing the subject in this chamber, I cited the example of a father who had four of his children in a room and who gave to one of them a ten dollar bill while giving the others nothing. Of course, he would have a family row on his hands. This is exactly what the present government has done with regard to this great industrial community. Out of all the cities in this area, they give to one city, the city of Brantford, this particular concession without making it available to the other cities adjacent to it. We have in that area, as a result, a great family row among cities which were members of a very happy family living and working together. We were competitive. There was keen competition among us to get new industries. Then the government asks this house to pass legislation making it possible to grant a concession of this importance to one city and not to another. I say it is absurd for taxpayers to be asked to provide funds to make possible a concession amounting to more than $400,000 for new industry to establish in Brantford, or any other particular city in that area, rather than in, say, Guelph, or some other community.


Eric Alfred Winkler: May I ask the hon. member a question? Is it true that while this area, Brantford, was being designated, certain industries in Brantford advertised in other neighbouring communities such as Kitchener for skilled labour?


Alfred Dryden Hales: That is precisely true. I understand that was the case in the city of Kitchener. I know that in Galt, only 15 miles from Brantford, one industrialist has intimated that after applying for help in the Brantford area papers not one person from

that area came to apply for a position in a city only 15 miles away.
If this legislation is not discriminatory, why have so many resolutions on the subject been sent to the Prime Minister (Mr. Pearson) the Minister of Labour (Mr. MacEachen) and the Minister of Industry (Mr. Drury) by organizations in Waterloo, Kitchener, Guelph, Galt and other places in this area? Why did a delegation composed of mayors, reeves and other men elected by the people visit Ottawa recently? Why did they come here to put their case before the Minister of Industry, who, I may say, refused to make any changes or concessions with respect to this legislation?
Let us see what the labour council of the city which I have the honour to represent had to say on the subject, as reported in the Mercury of October 11:
If the federal government's policy Is going to be one of offering large subsidies to industry to locate in adjacent municipalities, we have no alternative but to disband our (industrial) commission and rely on a depressed area status.
So in my opinion this is discriminatory legislation of the worst kind. We are given a definition of what constitutes new industry. What is a new industry, under this definition? Well, if I am a manufacturer making a chair in any one of these cities and I put three rungs in it, instead of two, the chair becomes a new product. I have a new industry. I might be running a concern called the dominion chair company of Guelph. All I need to do is move from Guelph, set up in Brantford and call my business the dominion chair company of Brantford. I put up a new factory there, introduce new machinery and become eligible for concessions which amount to as much as $400,000, the amount received in one particular case by an industry which was established in our community and which moved to Brantford in order to take advantage of these substantial benefits.
I know what is probably being said by hon. gentlemen on the other side of the house. They are saying to themselves: he is talking this way just because the shoe pinches. That is not the case at all. I am objecting because, as I say, this legislation is discriminatory. It might be acceptable if it applied to distant places in remote areas where help was needed. I would go along with that, and I am sure other members of the opposition would go along with it, too.
My second ground for criticizing this measure is based on the method used to select the designated areas. The criteria which are used are not fair because they cover the last eight years. It appears that a national employment service area qualifies as a designated area, provided it has been classified by the Department of Labour as a

labour surplus area for half or more of the summer months, May to October, during the past eight years and has experienced an employment increase of less than half of the national average over the same period. There are certain other alternatives set out in various subparagraphs. Statistics are all very well in some cases, but they must have a direct application to the situation we are facing. With regard to the case I have brought to the attention of the house, the case of the city of Brantford, I draw the attention of hon. members to the following which appeared in the Kitchener-Waterloo Record of October 11. Here it is, a full page, with the heading: " 'Distressed' Brantford Blushing But Grateful". There is a picture of park benches with only two people sitting on them. There is another picture of the employment service office-an office with not a soul in it except the officials. There is a picture of the main street of Brantford crowded with people shopping. It gives anything but the appearance of a distressed area. Then the text goes on to say this-and I cite the following in order to show that one cannot depend upon statistics alone:
The city has long leaned heavily on its main industry-farm machinery. And in the past, the two giants, Massey-Ferguson and Cockshutt, have produced at full speed in fall and winter for the ripe spring market. But in summer, they have laid off hundreds.
This is a specific case. There are also, in that area, workers in the tobacco fields who enter the district to help in the planting and harvesting of the crop. Many of these people are transients, but after the tobacco season is finished they remain in the area over the winter. I bring these examples to the government's attention to show that you must use more than statistics in picking out designated or distressed areas.
My third criticism is that this is a very contradictory piece of legislation. Why? We have the Minister of Finance (Mr. Gordon) sitting across from us, who has just said he is going to bring in amendments to the Income Tax Act so that fewer and fewer United States subsidiaries will locate in Canada. He is going to tax them so they will not come into this country, or something like that. This is what the legislation means in laymen's language. He is not going to encourage them to come in here. Now we have his partner, the Minister of Industry (Mr. Drury), to whom he is talking at this minute, saying to this United States firm which had decided to locate in Guelph: You go over to Brantford which is a designated area, and we will give you $400,000 on a silver platter. The ministers' actions are contradictory and they are at cross purposes with one another.
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This seems to be the type of legislative policies we have had ever since the new government came into office, with one minister working against another. Solidarity of the cabinet means nothing any more. Here is a concrete example that they are working at cross purposes.
My fourth criticism is that this legislation overrides municipal and provincial autonomy. The mayor of the city of Brantford did not even know his city was a designated area until this firm went over there and bought a piece of property on which to locate. That was the first he knew about it. Ottawa says to Brantford: You are a designated area, and they had nothing whatever to say about it. This is Liberal central control policy.


Mr. Rynard:: Bureaucracy.


Alfred Dryden Hales: Yes. Bureaucracy is the word. Provincial autonomy has been overridden; the Minister of Industry himself has said so. In speaking to the mayor of the city of Guelph he admitted they were overriding the Ontario law which permits no financial concessions to industry. The business of one city outbidding another city for industries got so bad that the province of Ontario said it had to stop and legislation was passed to that effect. It provided that city A could not offer freedom from land tax for five years, and in competition with city A city B could not offer ten years freedom from land tax. This situation was taken care of by the department of municipal affairs in Ontario. Yet the federal government has overlooked this legislation, overridden provincial autonomy and has gone ahead and named Brantford as a designated area.
The psychological effect is very bad. No community likes to be singled out as a slow growing or depressed area. What community wants to be called a depressed area? What community wants to be called a slow growth area? Most municipalities want to stand on their own feet, go it alone and work to develop industrial areas and attract industries in a good, clearcut way, as has been the case in the past.
My fifth criticism is that industrialists are discontented. They dislike having to compete with a new firm that is given concessions and is enticing staff away from them and undercutting prices. The situation is getting to be very bad in Brantford. The controversy has been propelled into the spotlight and new industries are making their contacts with the city through agents, because they do not want to be caught in the glare of publicity.
I hope the Minister of Finance will reconsider this amendment to the Income Tax Act. I summarize my criticisms. First, it is

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discriminatory. Second, the method of selecting or designating areas is not a sound one. Third, it is contradictory. Fourth, it overrides municipal and provincial autonomy. Fifth, it is very ill conceived and industrialists are not happy about it.
I present these reasons to the house why the amendment should be withdrawn completely. I know that when the Liberals were in opposition they hounded and urged us to introduce tax incentives to increase production and employment. Our government proceeded to lower the rate of tax on profits resulting from increased sales. This was an incentive, but we left it to industry to do it themselves. We did not interfere with municipal or provincial autonomy.
In the particular case to which I have been referring a wealthy United States firm came into my community. They were a well-to-do firm and did not need concessions. They are not poor by any means. In fact, perhaps the situation might be elaborated on in this way by using a Biblical expression: "To him that hath shall be given and to him that hath not shall be taken away even that which he hath". This is a case in point.
For these reasons, and many others which I am sure will be brought before the house before this amendment is passed, I would urge the minister to withdraw the whole section dealing with the proposed tax bonuses to new manufacturing and processing businesses in designated areas, until the matter has been given more careful study. I would beg the Minister of Finance and the Minister of Industry to do this.
Ask the chamber of commerce of Canada what they think about it. Ask the Canadian Manufacturers' Association. Ask the association of mayors and reeves. Ask the experts in the field what they think about this type of legislation. If the minister will approach the people who are close to the problem and if he wants a concrete example I would extend to him a first hand invitation to come to the community I have the honour to represent and learn what the people there are saying and thinking. Only last week end I was visiting the store of the man who ran against me as the Liberal candidate in the 1958 election. He said to me, "Al'f, keep up the fight; you are on the right track and they are wrong". While visiting the fair the other day many of my good Liberal friends said, "You are on the right track and they are wrong; keep up the fight". So I say to the Minister of Finance and the Minister of Industry: Give this discriminatory piece of legislation further and more careful consideration.


Mr. Marcel Lessard (Lake St. John):: Mr. Speaker, in taking part this afternoon in this debate on proposed amendments to the Income Tax Act, I have in mind certain suggestions which I shall be happy to offer to the Minister of Finance (Mr. Gordon). But, before I do so, I should like to point out how the general public and I myself feel about those proposed amendments.
If I am not mistaken, the main intention of the minister, in proposing the amendments, is to enable us to gradually become masters of our own economy. He said himself that the tax changes would help primarily to improve our unfavourable trade balance.
Obviously, there are many ways of achieving that objective. The one we are discussing now, that is the levying of taxes or simply tax exemptions in other areas, is certainly a method which can be used.
We have been told again and again for a long time that no other country's economy is under stronger foreign domination than that of Canada. Such an honour is not too enviable and we should all strive to correct that situation.
The interest Americans have shown for over a century in the expansion of the Canadian economy was certainly not inspired by any concern over the welfare of the Canadian people. Their concern was first to make profits and second, to take over resources which they could easily control and which could provide them, in the years to come, with the raw materials they need for their vast industries.
The fact that the Canadian economy is largely dominated by American interests exerts a tremendous influence on our country's development. As the minister pointed out, when decisions are taken at the management level of those enterprises, in a country other than our own, it is obvious that the concern is not for the human and economic factors involved and which will be affected by the decisions reached. Those people consider the interests of their country in the first place and consequently, the interests of Canada are relegated to the background.
It is therefore urgent, Mr. Chairman, that we take the necessary steps to regain our economic independence.
I pointed out recently that the economic control, the labour control as well as the military and political control, to which we are now subjected, have created lately many problems which are not yet completely solved.
I think that the present government has shown some indications which may lead us to expect that some action will be taken. Enough idle talk, it is time for action.

Mr. Speaker, the budget which was presented to us by the Minister of Finance on June 13 last, showed that he was ready for action, and we were sorry that, at a certain time, he had to back down and even withdraw one of the measures he had advocated, in other words, that he cancelled the tax he intended to impose on the sale of Canadian shares abroad. In my opinion, it was a commendable move, because just a few days after the withdrawal of that tax, we saw that Americans were taking advantage in a hurry of the opportunity which was given to them.
Mr. Speaker, I think that, in future, we shall have to seek further measures in order to promote the development of our industries by Canadians. It is obvious that the most essential measure will probably be the provision of capital, which is clearly inadequate at this time, so that we may take over in some areas which are not ours at present. It is not a matter of depriving those who have investments in Canada. That would not be fair, but we are entitled to buy back our properties and I think that the government should introduce legislation in order to supply the funds that we now need so urgently.
Let the government take the necessary steps so that we may develop our own industry and resources.
From what he said earlier, it seems that the minister's intentions are good and I hope that he will continue to take steps which will bring results.
Mr. Speaker, I urge the minister to give earnest consideration to some of the suggestions that he seemed interested in but that he dares not accept for fear of being considered a joker. In my opinion, the jokers are actually those who, in the past, as well as now, have let our country be developed by foreigners instead of Canadians, letting them benefit, on our behalf, from the natural resources which are so plentiful in our country.
Mr. Speaker, there are certainly anomalies in the Income Tax Act and I am of the opinion that everything is much too complicated in the taxation field.
I know that the minister expects very much from the report that will be submitted to him soon by the royal commission on taxation.
Mr. Speaker, I wonder now which measure we should pass in order to keep the control of our Canadian industries and prevent the heads of American industries from taking over Canadian industries established in our country.
I especially think of the special case of Canadian Oil which, I think, was taken over last year by Shell of America.
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Considering the procedure followed at that time, I wonder whether we shall have to amend the Companies Act, under which it is permissible to increase the number of shares and offer them in exchange for other shares held by other companies.
I suggest that this procedure is a camouflaged theft, since the heads of those companies get the right to print share certificates of their company-which are very cheap-and to offer them later to holders of other companies they want to control.
Following the increase in the number of shares of their companies, and considering that they keep a sufficient number of them to retain control of the company, the heads of those companies thereby obtain control of firms without paying anything, for all practical purposes.
Mr. Speaker, in my opinion, that procedure which we have seen in the past must cease if we really want Canadian industries to stay in the hands of Canadians, because otherwise we shall lie at the mercy of the great industrial and financial empires of our neighbours to the south which can use that procedure at any time.
As a matter of fact, Americans have recently taken over one of our Canadian banks, namely the Canadian Mercantile Bank, thus gaining control of another Canadian bank.
Mr. Speaker, I feel that if we want to prevent our institutions from being taken over by Americans, we shall have to take drastic measures which will probably cause a reaction and even bring about retaliatory action on the part of Americans. I think that, at this time, we Canadians should avoid any partisanship and all work together. Nineteen million Canadians will have to co-operate and strongly endorse the government which will take the necessary steps to regain control of our economy. This is a vital question.
I feel that we cannot postpone indefinitely the moment when such action must be taken because, at any time, we shall have to cope with a violent reaction from the foreign interests which will find themselves evicted from the strong positions they now hold and will lose the profits that they greatly appreciate. Other countries have taken that position before us. It is unfortunate that we should have to take such action against a friendly country, but if it is really friendly, it should understand that control of our economy must be given back to us, along with our political and military control.
Mr. Speaker, before concluding, I wish to mention a point which I particularly have at heart.

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The Minister of Finance stated earlier, that he was amending the Income Tax Act, in order to remove the so-called "loopholes".
In this connection, I wish to make a suggestion. I admit that it is a rather delicate question to discuss, especially for me, since I come from the province of Quebec. I am referring to the section of the Income Tax Act which provides for a deduction of up to 10 per cent for charitable donations on presentation of official receipts and appropriate evidence.
Mr. Speaker, that is a touchy subject at present in the province of Quebec and I know that there may have been abuses on that point but I am sure that there have been similar abuses, not only among the French-Canadian population of the province of Quebec but in every part of Canada.
I cannot accept that the whole population of my province should be accused of dishonesty because a few people have been using this provision to get a tax rebate. I deny such an accusation, and so that it may not be made again in the future, I urge the minister to have that provision repealed in order that there may no longer be any tax deduction for charitable donations. Now, here is what I would suggest in return: That the tax rate on the $3,000 of taxable income be lowered from 17 to 12 per cent, so as to eliminate all these shenanigans, all that paper work and all those investigators who go about the country and cost the treasury a lot of money.
I see the Minister of National Revenue (Mr. Garland) and I ask him to give all his attention to my proposal. As a matter of fact, I think that he did receive a letter I wrote him to this effect. The act lends itself to abuse and, if you think that this legislation is not all it should be, what are you waiting for to change it? I cannot tolerate those continual insinuations to the effect that the people of Quebec are dishonest.
Mr. Speaker, there are hundreds, if not thousands of individuals in the province of Quebec who have made out their income tax returns for 1962 and who are still waiting for the overpaid tax to be reimbursed.
That legislation authorizes deductions of 10 per cent of the taxable income, with suitable evidence of course. Now, if the given proof justifies a certain deduction, why should there be such a delay?
I wonder if it would not be possible to hire other people to conduct other investigations so as to give satisfaction to our fellow citizens.
We are now at the end of October and you will have to pay interest on those amounts you are withholding. That business should be settled once and for all.

Mr. Speaker, I ask the minister, as well as his colleague, to see to it that this section of the act be withdrawn, since it lends itself to abuse. He should accept my suggestion; it would help to simplify an act which is already so complex and confused.
To finish my remarks, let me, strike another note, Mr. Speaker. Our group advocated certain amendments. We made many suggestions and, personally, I consider that with the present taxation system, it is always the consumer who has to pay. It is no good trying to find out who is finally going to pay the tax collected here and there. In the end, it is always the consumer. Why multiply those taxes endlessly?
I therefore ask that the cost of production of the goods sold in this country and the total of taxes levied be indicated. I also ask that taxes be charged on the finished product rather than on all phases of production. That would enable our producers to face competition on foreign markets without risking to be accused of dumping. That would put the Canadian industry in a better position to face foreign competition.
Finally, I think that we could greatly simplify that Income Tax Act because the consumer is always the one who has to pay the bill. Those taxes are levied precisely in order to provide for the payment of the services for which we cannot pay individually and which we are required of the government.
We accept to do our share so that those services may be provided for the majority. So, it is normal that we should accept to pay that premium, if I may call it that, so that the government can keep on providing those services.
This proposal we just put forward today is certainly not the ideal thing, far from it, but it tends to alleviate the taxpayers' burden. I am not a taxation expert and I suppose that those experts could find other alternatives; but, on the other hand, when we depend only on experts, the result is that we get exceedingly complicated situations. I think that this document prepared by experts could be used as conclusive evidence.


Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, what we are dealing with this afternoon is, I suppose, the somewhat battered remnant of the budget that was presented to us many months ago. I would like for a moment to point out that in the modern world of government administration a budget is something far more than merely the housekeeping accounts of our national government. It is a piece of mechanism by which a government decides,

in the first place, just how the national income is going to be distributed. It is a piece of mechanism by which a government can to a great extent determine just how much its revenues shall increase and how much its expenditures can increase, or vice versa.
I have been rather struck with some of the measures in this bill. I was at the time they were introduced in resolution form by the Minister of Finance (Mr. Gordon) and on that occasion I suggested that perhaps the budgetary mechanism was not being used in the best interests of the Canadian people. I think we should remember that this budgetary mechanism is the same wherever it operates; it is the piece of mechanism not only by which the Minister of Finance of Canada protects the interests of a number of quite well padded corporations but it is the same sort of mechanism by which his opposite numbers in different parts of the world achieve different purposes. I suppose you might say it is the piece of mechanism by which Mao Tse-tung rather ruthlessly turns Chinese peasants into industrial workers. In the present instance we have in this bill a number of provisions that are going to increase the holdings of rather privileged sections of our society. I say this having regard to statistics that I am sure the minister has seen, which indicate that those sections of our society are doing very well now.
We have, for instance, the report of the dominion bureau of statistics with regard to gross business savings. Really these are rather astonishing figures when we consider them in connection with the proposals of our Minister of Finance. There was a total increase in gross business savings of rather more than $400 million between the years 1961 and 1962. This was made up of an increase of $200 million in undistributed corporation profits and a similar amount, multiplied by ten, with regard to depreciation allowances, which rose from $4,539 million in 1961 to $4,755 million in 1962.
I suggest, sir, that in the face of these figures the government and the Minister of Finance could have done much more toward dealing with the other problems that he has been presenting to us. In the main the two problems'-and his attempts to grapple with them, I may say, have my heartiest sympathy and support-are the question of foreign ownership and the question of reversing the rather disastrous centripetal force that has been dragging all our industry, all our production into only a few industrial centres. We face the problem of encouraging development in the designated areas and making some attempt to control the increasing foreign ownership of our resources and our industry.
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As I say, Mr. Speaker, I have great sympathy, as I am sure practically every member of this house must have, with the minister when he tells us, quite rightly, that this is a very serious problem which may have results much more quickly than many of us understand and realize with regard to our political independence, as well as our economic independence. I think this is something that all Canadians should be recognizing today. We should be recognizing that we have actually only two courses to follow. We can attempt to do it along the lines that the minister has pointed out-and I am going to deal with the methods he has outlined, which I think are ineffective-or allow ourselves to be submerged in the economy and the political life of our great neighbour to the south. If we decide we are going to do the latter, the sensible thing for us to do would be to start negotiations to that end right now. If we are going to allow ourselves to be absorbed, let us take some positive action to be absorbed on our own terms. I think that idea is repugnant to most Canadians, but it is not sufficient merely to feel it is repugnant; you have to do something positive about it.
What the minister is suggesting in this bill is, I think, really a rather naively optimistic course of action. I refer to the suggestion that with great effort and, according to him this afternoon, the lapse, of considerable time, we might achieve a 25 per cent ownership in industries that are now foreign owned. As I say, I think it is naively optimistic in a day and age when it is notorious that even the majority stockholders in corporations have little or no say in their direction to imagine that a minority group of 25 per cent could have any really effective control over corporation policies. It is naive and optimistic in the extreme.
I would suggest that this suggestion has come about because of the government's preoccupation with some of the disappearing myths of economics from which we are still suffering; the idea that we must rely on private enterprise for all these changes which we wish to make. This not only produces an ineffective solution, but one that even if we achieve it today, tomorrow we might lose it; because if we are going to replace private American ownership-we might as well place the name right now on the record, because we all know to whom we are referring when we speak of foreign ownership-with private Canadian ownership, what guarantee have we that next week or next month or six months from now our Canadian 25 per cent ownership is not going to succumb to an attractive offer from the corporation directors of the company in which they hold their shares.

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I would suggest that rather than do that, the minister would be better advised to lay plans for making a modest public investment, possibly even less than 25 per cent, in these industries in which it becomes possible to do so. He should take a leaf out of the book of the French planners, who have planned in a rather careful and rather conservative manner but who nevertheless have adopted a policy by legislation of ensuring that a designated director assumes his seat on the board of directors of every corporation in which the public authority invests funds in France. The steel industry in France, for instance, has about 30 per cent of its stock held by the public authority.
In addition to that, the public authority designates a director to take part in the deliberations of the board of directors of that Corporation. If you wish to make a minority stockholding effective on the board of directors you have to ensure, in the first place, that it is going to be permanently there, and in the second place that it will have a powerful voice on the board of directors.
I suggest that the director designated by the government of Canada would have a very important voice in any company decision. I also submit that the same argument must also be used with regard to this vexed question of encouraging development in the designated areas. In the first place, I think that some of the provisions are open to very severe criticism in that they appear to leave the door open for very substantial raids on the public treasury, by means of this tax exemption, by corporations-and I see nothing in the act which seems to prohibit this- which are well established in other parts of the country setting up a wholly-owned Subsidiary corporation, moving into one of these designated areas and taking advantage of these tax exemption provisions. It may be I am wrong and that I have read the bill wrongly, but I have not seen any provision there which would prevent that sort of operation. When we consider that the vast bulk of productive enterprise in Canada today is carried on by very large, powerful and wealthy corporations, I think this is a very real danger which faces the minister's attempts to encourage development in these designated areas.
These are the main criticisms I make of the minister's bill; but in addition I feel that the whole tax structure should really be reorganized and that it should be reorganized from an entirely different point of view from that which seems to be held by the government and by the minister. It should be considered part of the duty of a modern government and a modern minister of finance to use the budget and taxation, the fiscal structure

of the country, in a redistribution of income throughout the community. After all, that is the modern trend in society all over the world. It has been the means by which we have progressed. It has only been the rapid and quite drastic redistribution of income in North America which has enabled the North American economies to develop as they have. One of the pioneers, of course, in that field was a gentleman who would have repelled most vigorously any idea that that really had been his purpose, the late Henry Ford, who staggered and dismayed his fellow industrialists by suggesting that it was possible to pay $5 a day for industrial workers. When he did so he laid the groundwork for this redistribution of income upon which modern industry is now based; and I suggest to you, Mr. Speaker, that the minister is missing an opportunity when he persists in increasing the benefits to be derived by wealthy corporations from our fiscal structure, and does nothing, or practically nothing, to advance this process of income redistribution upon which economic prosperity so largely depends.
Somebody mentioned this afternoon that the minister's attempt to deal with foreign ownership by means of his 30 per cent takeover tax had had to be abandoned, and then the Americans had moved into that field. I am sure the minister does not have that rather naive interpretation of the events which happened. I should like to speak for a moment on this, because it is one of the great problems facing us today.
The minister has pointed out that, due to the present position of the interest equalization tax, the legislation governing which is still undecided before the U.S. congress, there has been a virtual drying up of all investment coming into Canada, or at least a very severe diminution of it. The anxiety at the time the tax was announced to get special concessions from the United States indicated the minister's realization of the very precarious position in which the Canadian economy finds itself today. It is a precarious state of affairs because we have allowed ourselves to get into the position of depending upon a continual inflow of capital to balance our payments problem. I suggest to you, Mr. Speaker, that there is something much more important which will have to be done than merely trying to keep United States investment out, or to diminish it, and to keep United States imports out if we are to tackle this whole problem which was indicated to us when President Kennedy announced the tax. It was in fact nothing less than an indication from the United States authorities that they are no longer able to do what they have been doing since 1945, and that is in large measure to finance the exchange transactions

of the world. It has been accomplished at the cost of enormous and growing deficits in the United States, which in turn have caused a weakening of the dollar, which again in turn has caused the run on gold which so alarmed the United States authorities.
My great fear is that Canada-although I must say I have seen no indication that the minister is moving in this direction-and other countries in the world may be tempted to seek a solution to this problem by unilateral action in order to preserve their own currency, and solve their own balance of payments problem unilaterally by a belttightening process. Unfortunately there are some very powerful and influential voices in Canada at the present time urging our Minister of Finance to pursue that policy. I hope he is going to turn a very deaf ear to those voices and is not going to put Canada in the position of taking part in what could only be a chain reaction of depression, such as took place some 30 years ago with the collapse of the pound sterling, when the world faced the same situation, and was under the same pressures and difficulties as are faced by the U.S. dollar today. Not that I am suggesting that the United States dollar is in any danger whatever of collapsing in the way the pound sterling did because, of course, the United States economy is still the wealthiest and most productive in the world. But the United States has given us and the other 21 nations in the world to whom the proposed legislation will apply notice that they can no longer shoulder this burden, and I hope the Canadian government will at least encourage, and perhaps take the lead in pressing for an international solution to this problem, an international solution which is required not merely to prevent the developed countries from plunging into a wave of depression, but also to make effective any development of the undeveloped areas of the world, or to provide any effective means of closing the gap which now is widening between the "have not" nations and "have" nations.
I think that these are the problems facing one minister. I hope he is going to resist the pressures which will be brought to bear on him to balance our budget, to tighten our belts to protect the Canadian dollar by the time-honoured method of balancing the budget and that he realizes that the world has now reached the stage where we have to cooperate with an international field and develop international mechanisms to deal with the economic problems of each of our national economies.
I feel that this bill before us this evening takes very little cognizance of the difficulties
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which lie before us. I do not think we are going to be able to solve the problem of foreign ownership by the type of proposal brought forward by the minister. I think it is a much more far reaching problem which is going to require much more fundamental reorganization of our own economy. I would plead with the Minister of Finance and his colleagues that they do not fall into the stance adopted last night by one of our Conservative colleagues in the house, who launched such doughty blows for free enterprise that he wanted us to hand over Northern Transportation to private enterprise. I hope they will realize that so far from that being a sensible or rational procedure, the very reverse is required today-a great stepping up of public investment both independently and in conjunction with private investment. If we are to solve these problems of foreign ownership and the necessity of developing the designated areas, I trust the minister and his colleagues will bear that in mind and will not cast too many sidelong glances toward the gods of free enterprise, which are disappearing in the mists today, but leave their sacrifices before the new gods of collectivism which are beginning to emerge in the minds of intelligent and able people. [Translation]


Gilles Grégoire: Mr. Speaker, when one reads the bill, one cannot but find it somewhat complicated. In fact, paragraph
(a)	of section 1 is exactly 12 lines long, without any semicolon. I shall read that paragraph and I challenge anybody to tell me that he understands what it is all about, after hearing that reading.
I see the Postmaster General (Mr. Denis), who understands French very well, and I shall read that paragraph to him. Then I shall ask him whether he has understood what it means.
The value of board, lodging and other benefits of any kind whatsoever (except the benefit he derives from his employer's contributions to or under a registered pension fund or plan, group sickness or accident insurance plan, medical services pian, supplementary unemployment benefit plan, deferred profit sharing plan or group term life insurance policy) received or enjoyed by him in the year in respect of, in the course of, or by virtue of the office or employment: and-
If the Postmaster General understands what it means, Mr. Speaker, he is smarter than we are.
I can well understand that when an ordinary citizen has to file his income tax return he is faced with all the difficulties found in that legislation.
At page 17, subsection 3ba, you can read:
In its application to any corporation described in paragraph (ea) of subsection (3b), paragraph (f) of subsection (3b) shall be read and construed as though-

Income Tax Act
Complications, Mr. Speaker, to such an extent that one is at a loss to understand and-


David Réal Caouette: The minister himself does not understand too well.


Gilles Grégoire: -that the minister himself, as the hon. member for Villeneuve (Mr. Caouette) just said, does not understand too well, although in private life he is an accountant and one of the best in Canada.
But, Mr. Speaker, what will be the result of such a complex bill? Our Canadian businessmen will have to spend part of their profits to hire some staff, an accountant, secretaries, and occasionally interpreters, even linguists and professors of literature to try and understand, draw up budgets, and do some accounting and bookkeeping, as a result of all those complicated laws adopted by the federal government.
I know businessmen who told me that almost half of their profits went to pay experts to decipher the Income Tax Act and file their returns. And if there is the smallest mistake, the inspectors do not understand that the blame lies with the minister who had this complex legislation adopted. The officials are also to blame, because they do not know themselves how to interpret the law in most cases; but they levy fines and penalties on the poor taxpayers who cannot understand the Act, because it is too complicated.


David Réal Caouette: It is terrorism.


Gilles Grégoire: Mr. Speaker, I submit that the minister-I recall talking about it here before, when the minister agreed to our request-should make an effort and try to trim down this whole tax legislation in order to make it more understandable for all Canadians, not only the ordinary taxpayers, but also those who pay large amounts in taxes, such as the companies, big or small, because it is legislation which is expensive to carry out since it requires too many people to fill out the tax returns.
If you try to read this legislation, you find it so difficult sometimes that some businessmen get discouraged, which I can understand, in preparing their annual returns.
Mr. Speaker, first of all, I would urge the minister to simplify the act in order to make its contents clear to taxpayers, so that the businessman will not always be the victim of the official who, in most cases, is stone-hearted. Equipped with all the powers and privileges, he breaks into the businessman's office, carrying away all the papers with him. I see that the Minister of Finance is nodding. In fact, these officials may even arrive with trucks, empty safes and desks, and carry

everything with them. If the person objects, the Royal Mounted Police come 12 hours later with a warrant and take everything.
But if the act was simplified, if taxpayers were allowed to understand it better, if it was applied with more sense and heart, then Canadian citizens would be in a better situation. Today they not only pay but they have to put up with a lot of trouble.
By trying over and over again to make out what this is all about, Mr. Speaker, I finally succeeded in understanding certain points.
There is one in particular which I was able to make out. Indeed, the minister, at one point, quoted section 28 amending section 139 to make it section 139a (1):
For the purpose of this act, a corporation has a degree of Canadian ownership and control in a taxation year if throughout the 60 day period immediately preceding that year (or if the corporation did not have a preceding taxation year, throughout the 60 day period commencing on the first day of the year).
And it continues:
(a) the corporation complied with the following conditions:
(i)	the corporation was resident in Canada,
(ii)	either
(A) not less than 25 per cent of the issued shares of the corporation having full voting rights were owned by one or more individuals resident in Canada-
Then, the minister stated that, more or less, he was satisfied that a corporation is controlled and owned by Canadians if 25 per cent of the issued shares are owned by Canadians. It does not take much to satisfy him, because 25 per cent of the shares are owned by Canadians while 75 per cent are owned by non-residents. And the minister claims that those corporations would be controlled by Canadians.
If we keep on accepting that corporations can get special privileges while 75 per cent of their shares are owned by foreigners, or foreign corporations, we should not be surprised to see foreigners monopolizing 75 per cent of the shares of Canadian corporations in order to enjoy special privileges.
I submit that if we want to grant some rights or privileges to those corporations, it must be to corporations in which at least 51 per cent of the shares, not 25 per cent, are owned by Canadian interests, so that the policies may be decided on here, in Canada.
This is what I read in a newspaper today:
Washington proposes to Ottawa the establishment of a vast natural resources pool.
Canada has natural resources such as iron, oil, etc. It would seem that the Americans would like to set up a pool of our natural resources to get as much as they can from our own resources. Who would thereby benefit?

If this bill is adopted and if we stipulate that only 25 per cent of the shares of Canadian companies are to be held by our nationals, who would benefit from such a pool of our natural resources?
Mr. Speaker, I say that it is the United States or American financiers who would again profit from such a scheme.
In the financial columns of the same newspaper, the Quebec premier is reported as saying:
Canadian capital is not sufficient, said Mr. Le-sage, if we are to fulfil our dreams. Foreign capital will be required to carry out the projects which Quebec's future justifies.
There would seem to be some contradiction between the statement of the Quebec premier and the proposal made by the federal Minister of Finance who is trying to repatriate our industries. One of them says: "Let us regain control of our economy" while the other states that we must attract foreign capital. There does not seem to be any common ground for agreement between them, since the Minister of Finance would like to see Canadians take over the control of their industry, even if the proportion is to be only 25 per cent, while the Quebec premier claims that our dreams cannot be fulfilled nor our projects carried out if we do not get financial assistance from outside, because there is not enough capital here to develop our country.
We must welcome foreign capital in order to achieve our goals. Investments are needed.
If, instead of exerting so much effort to find foreign capital, the Minister of Finance would try to create capital in Canada, which is something we are in a position to do, then Canadians could develop themselves, for the benefit of Canadians, the natural resources available in our own country.
We have all the resources, the manpower and the skills required. Yesterday, the Secretary of State (Mr. Pickersgill) told us to find some competent people. We claim that such people exist; we know that there are competent people able to develop our natural resources. But what do we need then? Only the financial means to develop our natural resources.
I fail to understand why a supposedly intelligent group, such as the present cabinet with so many economists, is unable to find a solution where mere figures or scraps of paper will no longer impede the development of our Canadian resources.
I wonder why the Minister of Finance, who is a good accountant, has not yet realized that, by means of a monetary and financial system, it is possible to develop the natural resources of our country without always having to beg from foreigners a few scraps of
Income Tax Act
paper that are needed to put people to work in our country for the development of our resources.
This is completely incomprehensible. How is it that the required capital is not available in our country?
Here is what Malraux says:
Andre Malraux makes a summary of his mission.
My predominating impression about Quebec? Hope.
What struck me about your achievements? Their intentions.
Hope for the future. Intentions.
Intentions are good. There is hope of seeing them come true. But why is it not done? Why are our intentions not brought into being? Precisely because, in Canada, we are somewhat limited in our plans for lack of funds. When we need money, we are forced to go and beg abroad, outside of our own borders.
That problem has been raised several times in the house already. We have tried to explain our ideas understood in various ways. To us the matter appears simple. The Minister of Finance listens to us but, so far, he has not done a thing.
We find it strange that, whenever the government tries to do something, for instance to increase old age pensions, it always has the same idea in mind, that is to increase taxes. That is a step it promises to avoid prior to the election but, once the election is over, it does the opposite.
And now I shall deal quickly with another point. Reference has been made to receipts for charitable donations. I agree with what was said a while ago, to the effect that an abnormal situation is developing in this field. I get letters from my electors and other people who say: "We have sent receipts duly signed by the parish priest and, without telling us why, an income tax inspector has taken it upon himself to reduce the amount of money coming to us."
If only the inspector would go and see the taxpayer and explain to him the reason for this reduction; but no, the amount of the refund is reduced without consultation with anyone.
The small taxpayer has two alternatives: either accept the situation-and he is squashed once more-or start procedures to get his due, which will entail expenses.
When the Department of National Revenue cuts down the charitable donation receipts, the taxpayer should not have to pay the costs of the proceedings.
The department acts in a dictatorial way when it cuts down the refund and makes the taxpayer bear the costs of the proof. It is

Income Tax Act
contrary to the law, in Canada. The Minister of National Revenue acts in a way which is contrary to the provisions of the Civil Code of the province of Quebec, and contrary to the law in Canada. While our law is based on the principle that the onus of proof lies with the prosecutor, it lies upon the taxpayer in the case of income tax, and this contrary to the provisions of Canadian law.
The result of this is that the small taxpayer is satisfied with staying home and grumbling against the Department of National Revenue and the government.
Why not change the procedure. When the department receives an income tax return, why not accept it as it is? It is true that some taxpayers try to cheat, but then the onus of proving the cheating or error should lie with the Department of National Revenue. The department should not make an arbitrary decision by itself, saying to the small taxpayer: "If you are not satisfied, take proceedings, even if this is costly."
The Department of National Revenue forces too many Canadians to suffer injustice and keep quiet, because they do not have the means to defend themselves. As far as charity receipts are concerned, I am of the opinion that the stand of the department is unfair. I suggest the inspectors of the federal government have really been trained to act as dictators and give as much trouble as possible to our Canadian citizens. That situation should change, and we take advantage of this opportunity to request an amendment to the Income Tax Act.
I should like to speak again of a certain argument which is very important to us and which we mentioned often. I will deal quickly with it because there is not much time left; it is the ultimatum of the premier of Quebec. That ultimatum was delivered April 5 last, that is six months ago. There are only six months left until April 5, 1964.
The Quebec premier has delivered an ultimatum to the federal government, whatever may be the party in power after the general election of April 8, demanding that the federal government give back to the province of Quebec, as a first step and before April 5, 1964, 25 per cent of personal income taxes, 25 per cent of corporation taxes and 100 per cent of succession duties. On coming back here after the election, we asked the Prime Minister (Mr. Pearson) and the Minister of Justice (Mr. Chevrier) if they were aware of the ultimatum.
What was their reaction? We were told: "No, we never heard about it". And a few days later, after having received some newspaper clippings with the following headlines:
[Mr. Gregoire.l
The ultimatum of the province of Quebec-
They admitted that there was an ultimatum. Today, the government knows there is an ultimatum and it is aware that this ultimatum ends on April 5 next.
There is a lot of talk about saving confederation. If we wish to save it, let us begin by abiding by it, by respecting the two great races forming Canada and at the same time by respecting one another.
I read in the same newspaper:
Lamontagne is confident that Canada will survive its centennial.
This is the President of the Privy Council, the member for Outremont-St. Jean (Mr. Lamontagne), talking.
If we wish to ensure the survival of confederation, we must begin by respecting it, which implies the enforcement of the British North America Act which gives direct taxes such as corporation taxes and succession duties to the provinces.
Those fields of taxation belong to the provinces, and the federal government has now but six months to satisfy the terms and conditions given in this ultimatum which has our support, as a first step, for our struggle will come to an end only if and when we get back 100 per cent of our revenue sources.
Should this government be unwilling to face the present situation, to have regard for the spirit as well as for the letter of confederation, then, we shall have the right to say-and I will be the first one to do so, I say it once more-we shall have the right to say that our confederation will suffer a break and will perhaps be unable to celebrate its centennial. I, for one, will not hesitate to say so.
If the intention is to give back to the provinces what belongs to them in the first place, that is the sources of revenues to which they are entitled, I, for one, will have increased confidence in confederation. But if the situation does not change shortly, then, I will say that confederation is a situation where the central government tries to deprive the provincial governments in an attempt to appropriate all fields such as education, health, hospitalization plans, etc.
If the intention is not to carry out the undertakings given in the British North America Act, I will not hesitate in stating that. I shall say that confederation did not attain its goal and that it is a colossal failure.
However, we hope that the Minister of Finance (Mr. Gordon) will assume his responsibilities and will revamp his system so as to restitute to the provinces the income tax, the corporations profits tax and the succession duties.

Mr. Malraux is right when he says:
What strikes me most in the province of Quebec is their intentions.
We have intentions in the province of Quebec, we have faith in French Canadian people, we intend to develop our province, our ethnic group. We are confident because we know that we are able to do it; we have faith in our own people, and we are able to help develop the country as a whole.
But if they start by not abiding by the commitments of the past, those resulting from the confederation, if they start by taking away from us the means to develop ourselves, how can we carry out those intentions?
What prevails at this time in the province of Quebec is a feeling of hope. We hope to find our own way towards development, within the frame of our own culture, to which we are deeply attached, and without betrayal of our French Canadian personality. We intend to develop our province, our ethnical group. If we are deprived of the necessary means towards that end, we shall have to take whatever measures are available.
I have perhaps deviated somewhat from the subject of the Income Tax Act, but not too much, really, because what we want is that the power of taxation be given back to the province of Quebec, as well as to all the other provinces.
Mr. Speaker, those are the few remarks I wanted to make to clarify all those complicated things, like our monetary system, which nobody understands in Canada, and also, in order to simplify the Income Tax Act, so that the minister might, by resorting to efficient means and not to 25 per cent measures, succeed in Canadianizing our industries, our manufactures and our natural resources, by taking the necessary steps to give a positive answer to the ultimatum delivered not by a political party, but by the whole people of Quebec, and which will expire on April 8 next.


Charles Mills (Bud) Drury: Mr. Speaker, the hon. member for Wellington South (Mr. Hales) made some observations in relation to designated areas. In particular, he suggested that the scheme which had been introduced for designating areas was discriminatory. In the dictionary sense of the word, this is quite true. The scheme and the criteria are designed to be discriminatory, to pick out the less fortunate, the more unfavoured areas, and to provide measures of assistance for them over and above what the Canadian economy provides for Canada as a whole. In this sense, it is discriminatory and it is deliberately discriminatory.
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Income Tax Act
An endeavour has been made through the criteria to select those areas which have been the least favoured in terms of a chronic high level of unemployment and stagnation, in terms of economic growth, and to provide advantages to those areas which will enable them, to some extent, to offset the disadvantages and to share to a greater degree in our national growth, in our national prosperity, than has been the case in the past. The hon. member mentioned that Brantford, particularly the N.E.S. area, should not be allowed to continue to be designated and draw these advantages. He suggested that the people of Brantford did not like their area being described as a designated area. I can assure him that I have heard from the mayor of Brantford. Although he is unable to speak for the whole of the N.E.S. area, the mayor of Brantford is highly appreciative of the fact that Brantford is in the national employment service designated area.
Perhaps some citizens of more fortunate communities would prefer not to see these advantages go to the more unfortunate sister communities, and I suppose this is understandable. I do not suggest this is a reason for the federal government giving way and yielding to those who suggest that we should not exercise our responsibility by providing what measures of assistance we can to relieve the chronic high level of unemployment and assist in accelerating the economic growth of less favoured areas.
I should like, Mr. Speaker, to provide a few figures in respect of this particular question. I may say that of the 35 areas designated in respect of high level unemployment in the summer months, not one has registered anything except satisfaction at the plan. The community of Guelph and its contiguous areas are the only ones from whom representations have been received protesting the plan. As Minister of Industry, I have received a vast number of representations urging that additional communities should be included, and in particular the communities represented by the speaker. However, they do accept the fact it is necessary to qualify under the criteria and consequently they do not press.
The criteria which have been criticized provide as follows: That an N.E.S. area will qualify for designation, and consequently assistance which the Minister of Finance (Mr. Gordon) has outlined, if it has suffered from a high level of chronic unemployment and a lack of economic growth. This, in concrete terms, means that during the six summer months from May to October an area must have been in the labour surplus category for over 50 per cent of those months during the past eight years. Further, that over the past

Income Tax Act
eight years it must have recorded a rate of growth less than half the national average.
I will compare two cities, Brantford and Guelph, during this eight year period. During the 48 summer months in the past eight years, 1955-62, Brantford was in a labour surplus condition for 87 per cent of those months. During the same period of 48 months Guelph was in a labour surplus condition for only 21 per cent of those months.
During the same eight years the rate of employment growth in Brantford was 2 per cent; that is, 2 per cent over the whole eight years. During the same period Guelph experienced a growth in employment of 19.7 per cent, almost ten times as great.
A second criterion is related to communities which, while they may have been relatively well off over the long haul, have experienced a sudden decrease in industrial activity. In this case a criterion has been established for looking at only a three year period, and in order to qualify under the three year period a N.E.S. area must have been for 18 summer months of that period in a surplus labour condition for 50 per cent of those months.
In the last three years, 1959-62, Brantford was in a labour surplus condition in 89 per cent of the summer months, and Guelph was in a labour surplus condition in only 39 per cent of those same 18 months. In the same three years the growth of employment in Brantford, on a minus or negative growth basis, showed minus 7.4 per cent, while in the same three years the growth of employment in Guelph was plus 2.4 per cent.
Taking it year by year in those three years, employment changes in Brantford in 1959-60 compared with the previous year were minus 7 per cent; 1960-61, minus 6.1 per cent, and in 1961-62 a plus of 1.2 per cent. I say this to indicate that in the last year there was some slight improvement in the Brantford employment picture. However in the same period in Guelph the growth of employment was 4.7 per cent, about four times as great.


Mr. Weichel:: May I ask the minister a question. He is talking about Brantford being a depressed area, but why should it be, when recently two firms had advertisements in the Kitchener-Waterloo Record asking for labour help?


Charles Mills (Bud) Drury: Mr. Speaker, I would draw the attention of the house to the fact that the use of the term "depressed area" was not employed by me. Brantford is not a depressed area.


Mr. Webb:: Well, distressed.


Charles Mills (Bud) Drury: Nor is it distressed. There is a rate of high unemployment and slow economic

growth, and I suggest the reason employers in Brantford have been advertising outside of Brantford for help probably lies in the fact that the shortage of skilled artisans throughout Canada is well known and recognized. If we have high unemployment it is unemployment of those who are unskilled.
In many categories of industrial employment there is a labour shortage in Canada today, and part of the problem we face as a country is to convert those who are unskilled into those possessed of skills. While in Brantford today there is a great surplus of manpower unemployment there is no surplus- indeed I suspect there is a shortage-in certain skilled categories.


Mr. Nesbitt:: May I ask the minister a question. Is he not aware that in the city of Brantford there are rather peculiar or exceptional circumstances which have created this statistical unemployment picture during the last two years, and when I say statistical I mean in comparison to its neighbouring communities? I refer of course to the relocation of the Massey-Ferguson Company and the Cockshutt Company. It is perhaps worthy to note that Brantford over the years has been largely dependant on the farm machinery business, and because of the relocation and rebuilding of these big plants this has probably created a very decided aberration in these unemployment figures.


Charles Mills (Bud) Drury: I do not accept the suggestion that because there have been plants closed in Brantford as a consequence of relocation of industry, and as a consequence of this a lot of people were unemployed, that this created an aberration in the unemployment figures.


Wallace Bickford (Wally) Nesbitt: They are building a $15 million plant in Brantford now. That is the reason.


Charles Mills (Bud) Drury: I might point out to the hon. member that during the current summer, while this multimillion dollar plant was being built, there were probably more people employed in the construction force than would be employed when the plant comes into operation. The figures I have given to the house related to the current summer months while this high level, or allegedly high level of construction activity has been going on in Brantford. When these buildings are completed those in the construction trades engaged in building the plants will be laid off. They will be replaced by the people operating these plants, but there will still be the same number displaced in the unemployment roles as those now engaged in the construction industry and who will be laid off when building is completed.


Wallace Bickford (Wally) Nesbitt: May I suggest to the minister that these construction people are not from Brantford but from other cities.


Charles Mills (Bud) Drury: Mr. Speaker, may I call it six o'clock?


Mr. Speaker:: I suggest to hon. members that in view of the letter we have received from the other place we should stay for a few minutes more. I have been informed that the messenger is on his way.


Oscar William Weichel: May I ask the minister another question. If you have Brantford as a distressed area instead of a depressed area, do you not feel all the cities in that community are going to suffer in regard to new industries?


Charles Mills (Bud) Drury: I did not quite get the question. Do I feel that because Brantford has been designated, then other sections of that community will suffer-is that the question?


Oscar William Weichel: Yes, the other cities in the community, Kitchener, Waterloo, Preston and Guelph. I am sure they will suffer by not being able to secure more industries.


Charles Mills (Bud) Drury: There is no question that Brantford is going to have a temporary advantage. After all, one of the purposes of the legislation is to confer an advantage on an area which for some reason or another has suffered over past years. The intention is to provide additional assistance to relieve high level chronic unemployment. It will have an advantage, but I do not feel for a second, nor do I think the hon. member does, that this advantage is going to be such that all industry coming to Canada is going to locate in Brant-
Business of the House
ford and, as a consequence, all other cities in Canada might as well shut up shop.


Oscar William Weichel: I do not expect that at all.


Mr. Speaker:: Order.



ROYAL ASSENT

[Stage Direction]
A message was delivered by Major Alfred Fortier, Assistant Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy of His Excellency the Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bill:
An Act to amend the Old Age Security Act.

Gordon Minto Churchill: May I ask the acting house leader what the business will be for tomorrow?


Mr. MacNaughi:: Mr. Speaker, tomorrow we will continue with the present debate, and if it is concluded we shall then take up the estimates of the Department of Public Works.


[Stage Direction]
It being thirteen minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
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[Stage Direction]
Thursday, October 17, 1963