1963-07-30

[Stage Direction]
Seventh report of standing committee on miscellaneous private bills-Mr. Wahn.


Mr. Alexis Caron (Hull) moved:: That the special committee on drugs and pesticides appointed July 26, 1963 be composed of Messrs. Armstrong, Asselin (Richmond-Wolfe), Baldwin, Basford, Cashin, Casselman, Mrs., C6te (Longueuil), Enns, Fairweather, Francis, Gauthier, Harley, Howe (Hamilton South), Mitchell, Nesbitt, Orlikow, Patterson, Pennell, Pilon, Roxburgh, Rynard, Valade, Whelan, Willoughby.


[Stage Direction]
Motion agreed to.
(Translation):


[Stage Direction]
On the orders of the day:
Hon. Leon Balcer (Three Rivers):: Mr. Speaker, I wish to direct a question to the Prime Minister. Can he tell the house if a ministerial or interdepartmental committee has been set up to study and prepare a preliminary design for a distinctive national flag? (Text):


Right Hon. L. B. Pearson (Prime Minister):: No, Mr. Speaker, there has been no subcommittee of the cabinet appointed on this subject.
(Translation):


Léon Balcer: Mr. Speaker, I wish to ask a supplementary question. Can the Prime Minister assure the house that the country will be given a distinctive national flag on or before April 8, 1965, as he has already promised?
(Text):


Lester Bowles Pearson: Yes, Mr. Speaker, I have already answered that question in the affirmative. I am glad to repeat the answer now. (Translation):


Mr. L. J. Pigeon (Jolieile-L'Assomplion-Monicalm):: Mr. Speaker, I wish to ask the Prime Minister a supplementary question. Will it be the same with regard to the adoption of an official national anthem?
(Text):


Lester Bowles Pearson: Yes, Mr. Speaker, the same stand was taken in regard to a national anthem.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: Mr. Speaker, I have a question for the Minister of Agriculture. Was the 1 cent taken off the cheese export subsidy to save the government $200,000, or was it done on the advice of the national dairy council to force the cheese producers to price themselves out of the United Kingdom market?


Hon. Harry W. Hays (Minister of Agriculture):: In connection with the question of the hon. member, there is a long and complicated story as to how the stabilization board operates so far as cheese is concerned, but the answer to the question is that there was a subsidy of 4 cents a pound on cheese which was recommended by the stabilization board. The stabilization board felt there should be a reduction of 1 cent because it was not required any longer with Canadian Cheddar cheese, which was selling at a premium in Great Britain; so they recommended that the 1 cent be taken off.
I can assure the hon. member that Canadian cheese in Great Britain is selling at a premium, and there is a big difference between New Zealand cheese and Canadian cheese. He might also be interested to know that the price of milk used in the manufacture of cheese is now higher than it has been for a number of years. I think the producers are quite happy about this, and there is still a big demand for Canadian Cheddar cheese.
With regard to the second question, I can assure the hon. member that the cheese board have no intention of putting anyone out of business. All they are interested in is selling as much Canadian cheese as possible, and this is being done. We could sell more cheese than we are manufacturing, and we are trying to convert from butter to cheese. In this regard we had a big disappearance of butter from the market last May and a larger one in June.


Mr. H. A. Olson (Medicine Hat):: A supplementary question. I should like to ask the Minister of Agriculture whether any special concerted action is being taken to sell some of the surplus Canadian butter in Britain, where at the present time there seems to be a shortage.

Inquiries of the Ministry Mr. Hays: This matter is under study. I (Text): believe the Minister of Trade and Commerce Mr. Pearson: That will be made clear in was asked about this matter on July 26, and due course, Mr. Speaker, he suggested that there were some complications with regard to selling butter, but	OLD AGE SECURITY
that the matter was under review. We will inquiry as to effective date of increased certainly sell butter wherever we can.	pension



IMPLEMENTATION OF FARM CREDIT ACT IN EASTERN CANADA

[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapoinie):: Mr. Speaker, I should like to ask a question of the Minister of Agriculture. Can the minister inquire and report to this house why there are so many delays and refusals in the implementation of the Farm Credit Act in eastern Canada, and especially in the districts of Lake St. John, Saguenay and in my constituency of Lapointe?


Harry William Hays: Mr. Speaker, I am not aware of any delays, but I will be glad to take the question as notice and look into the matter.


Gilles Grégoire: If the minister is not aware of that, is it because he has no time to take into consideration the problems of east-tern Canada, or because he thinks there are no problems? I think we need a second minister, Mr. Speaker.
(Translation):



EARLY APPOINTMENT OF MINISTER FOR EASTERN CANADA

[Stage Direction]
On the orders of the day:
Mr. Marcel Lessard (Lake St. John):: Mr. Speaker, I should like to direct a question to the Prime Minister.
In view of the pitiful condition of agriculture in eastern Canada, could the Prime Minister assure the house and especially the members from the eastern part of the country, that one of the first pieces of legislation he will introduce when the session resumes next fall will be the bill to appoint a minister of agriculture for eastern Canada?
(Text):


Lester Bowles Pearson: Yes, Mr. Speaker. We hope to do this very early in the resumed session.
(Translation):


Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a supplementary question to the Prime Minister.
Does he still intend to appoint the hon. member for Matapedia-Matane as minister of agriculture for eastern Canada?

On the orders of the day:


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. May I say that I am not seeking an answer today; I am merely asking that this matter be considered. In view of the statement made yesterday by the Prime Minister that the legislation regarding the Canada pension plan would not be brought back until the fall, will the government consider announcing before this session recesses the actual date on which the $10 increase in the old age security pension will be made effective? As the Prime Minister knows, the Minister of National Health and Welfare said that it would be some time early in 1964. I am asking the government to consider bringing that date forward, but
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before the session recesses what the date will be?


Lester Bowles Pearson: Well, we will certainly consider that, Mr. Speaker, and I hope the date will be earlier than my hon. friend fears.

WHEAT,	OATS AND	BARLEY

FURTHER	INQUIRY
AS TO	INITIAL	PRICE
On the orders of the day:


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. As a guide in determining whether wheat, oats or barley should be delivered on the initial quota, will the minister inform the house whether consideration is still being given to the initial price, including the $3 a bushel for wheat, or is this idea completely shelved?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: The other day I made a statement about the initial prices of wheat, oats and barley for the present year, and I have nothing further to add at the moment.



SASKATCHEWAN


[Stage Direction]
On the orders of the day:
Stanley James Korchinski: I should like to direct a question to the Minister of
Trade and Commerce. As of noon today I was informed by his department that there were still 29 points on a 10 bushel quota.

Since there is only one day of the old crop year remaining, how does he expect to meet his goal of 12 bushels, and how does he expect the farmers to deliver the two bushels in the one remaining day if there are no box cars?


Mitchell William Sharp: Mr. Speaker, on Friday the hon. member for Moose Jaw-Lake Centre asked a similar question and 1 promised I would have a statement early this week. I should like to make that statement now in reply to this question. I regret that the statement is rather lengthy, but I feel the subject is probably important enough to warrant it.
The Canadian wheat board has advised me that as at noon today there were 1,891 delivery points in western Canada on a quota of 12 bushels per specified acre out of a total of 1,942. Of the remaining 51 points, 22 of these have been closed and 29, as the hon. member for Mackenzie said, are still on a quota of 10 bushels per specified acre. Of those points on a 10 bushel quota, 25 are located in the province of Saskatchewan and 4 in the province of Alberta. Despite the concentration of shipments between now and the end of the crop year, some of these 29 stations will still be on a 10 bushel quota at the end of the crop year on July 31.
Early in June the board forwarded special questionnaire No. 3 to all delivery points requesting agents to estimate the quantity of all grains deliverable by producers in the 1962-63 crop year. The information received by the board from the agents as a result of this questionnaire showed the following estimates as at June 7, 1963:
Millions of Bushels
Wheat	430.8
Durum	59.3
Oats	95.1
Barley	77.0
Rye	9.6
Flax	13.7
Total	685.5
Producers' marketings to June 7 totalled 475.4 million bushels, leaving a total of 210.1 million bushels to be delivered between June 7 and July 31 to take all grain off farms. After considering the disappearance in export and domestic markets during the period June 7 to July 31, 1963, it was apparent to the board that it would be impossible to provide space for the delivery of 210.1 million bushels of grain within the period June 7 to July 31. However, in order to permit producers deliveries to the maximum possible, the board decided to set as a target a quota of 12 bushels per specified acre for all delivery points by July 31, 1963, which would
Inquiries of the Ministry involve the delivery of about 153.1 million bushels, thus leaving approximately 57 million bushels on farms at the end of the crop year.
The necessary shipping orders were placed to meet this target and the railways were requested to exert every effort to supply box cars in order that the goal of 12 bushels per specified acre could be attained. The Canadian wheat board states that the cooperation received from the railways has been excellent and the railways are continuing to supply box cars to the maximum extent possible.
However, in an operation of this magnitude it is inevitable that difficulties will arise which will adversely affect some areas. While, in the opinion of the board, these difficulties have not been major, nevertheless they have had the effect of hampering the attainment of the target quota. The latest records available to the board indicate that as of July 24 the estimated quantity still to be delivered to complete a 12 bushel quota was approximately 29 million bushels. The railway companies are maintaining shipments at maximum, and a considerable portion of this 29 million bushels will be delivered to country elevators by the end of the crop year.
In summary, the majority of the shipping points in western Canada will, by July 31, have marketed a full 12 bushel quota. Some points, while on a 12 bushel quota, will not have the opportunity to deliver all the grain represented by that quota, but they will have had the opportunity of delivering all grain represented by an 11 bushel quota. As previously stated, a minimum number of stations will still be on a 10 bushel quota.
The target of 12 bushels per specified acre was based on the information contained in special questionnaire No. 3, to which I have already referred; but since the results of this questionnaire were received a great many points have advised that additional quantities have been revealed which were not reported to the board in the questionnaire.
The board has taken the stand that it cannot give effect to these additional quantities of grain in its computations, as to do so would completely disrupt the plans that were laid with the railway companies to provide box cars on the basis of information previously received as at June 7. There is no doubt this situation has developed because of the excellent crop conditions now prevailing, and producers therefore have decided to deliver stocks which they had been holding in reserve.
The board also advises that instructions in regard to quotas have been issued to the trade that the present crop year will end at

Inquiries of the Ministry midnight on July 31. The board is not prepared to extend the year end date, as previous experience in this regard has shown that any such action unduly delays the delivery of the unit quota in the new crop year.
The board regrets that this action will doubtless adversely affect, to some degree, a limited number of producers, but in the main this decision will be in the best interests of producers as a whole.


Stanley James Korchinski: As a supplementary question, can the minister assure us that the grain will be taken out of these points in such a way that when the new crop comes in the initial crop will be able to be sold?


Mitchell William Sharp: I am sorry, Mr. Speaker, but I did not understand the question.


Stanley James Korchinski: The question is, can the minister assure us that the box cars will be allotted to any of these points that have not been able to deliver in such a way that the initial delivery can be made?


Mitchell William Sharp: I am sure this will be the intention and objective of the board.
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STORAGE CHARGES

Mr. J. E. Pascoe (Moose Jaw-Lake Cenlre):: I have a question for the Minister of Agriculture which is somewhat related to the statement on wheat made by the Minister of Trade and Commerce. Has the minister any information on the brief presented in Winnipeg to the board of grain commissioners, which is under his department, regarding grain elevator handling and storage charges for the crop year which begins on August 1?


Harry William Hays: No, Mr. Speaker.


James Ernest Pascoe: Will the hon. gentleman make some inquiries and report to the house on this matter?


Harry William Hays: Yes, Mr. Speaker.



CANADIAN BROADCASTING CORPORATION

[Stage Direction]
st. John's, nfld.-construction of

[Stage Direction]
On the orders of the day:
Mr. Joseph P. O'Keefe (St. John's East):: have a question for the Secretary of State. My question is, what is holding up approval of the Canadian Broadcasting Corporation television station in St. John's, Newfoundland?


Some hon. Members:: Order paper.


Hon. J. W. Pickersgill (Secretary of State):: I see no more reason why the question asked by the hon. member for St. John's East should [Mr. Sharp.l
be put on the order paper than the question asked yesterday by the hon. member for Port Arthur. I am very pleased, particularly in view of what I thought was an uncalled for reflection by the hon. member for Port Arthur, to which I took no exception, to have an opportunity to put the record straight in connection with this matter.
I might start by saying that the board of broadcast governors has not yet given approval to this matter, and therefore it is not yet within the power of the government to take any action with regard to it. The fact is that certain conditions were attached to this recommendation of the board of broadcast governors on April 5. I could give the house these conditions, but I do not want to go into all that detail. Then on April 17, five days before the present government came into office, the board received a letter from the deputy minister of transport asking to have a clarification of those conditions before a recommendation was made to the Minister of Transport. I am not suggesting this was done by any minister; all I am pointing out is that it was done before the present government came Lu office. I jusi want io make the date clear. The chairman of the board replied on April 13 to this effect:
I shall, as soon as possible, write you further on the other conditions which the board recommended by application in the case of the St. John's station.
I consulted the chairman of the board of broadcast governors this morning and he informed me that on June 28 he wrote to the vice president, corporative affairs, C.B.C., as follows in reply to a letter received from the corporation:
We are reluctant at this time to spell out more precisely the general conditions attached to the board's recommendations in this case. The expansion of C.B.C. facilities with consequent disaffiliation of private stations is among the matters being discussed by Mr. Ouimet, Mr. Jamieson and myself at the request of the minister (the Secretary of State) and with a view to reporting to the minister. The procedures involved in expansion of the C.B.C. facilities including alternative network service to the disaffiliated stations the availability and economical use of microwave facilities, the relation of assisting rebroadcasting stations to the extension of alternative service, etc. are important. While individual cases may differ in some respects it seems desirable to establish some principles applicable to all cases of the expansion of second service into smaller centres, including St. John's. Agreement on these principles should, we believe, precede a more precise definition of the conditions applicable to the St. John's case and, therefore, we feel we are not in a position to meet the request of the Minister of Transport at this time.
Now, until the board has made that recommendation the government has no legal authority to act.


Mr. C. R. Granger (Grand Falls-While Bay-Labrador):: A supplementary question. May I ask the Secretary of State what progress may have been made toward the establishment of radio and television facilities in western Labrador?


John Whitney Pickersgill: I made an inquiry some time ago about that, and I know the C.B.C. has given consideration to this matter. I also know there is a large and growing community in this area which has neither radio or television facilities and which is most anxious to get them. As one of the members for Newfoundland I confess I am a little disappointed that this is not going ahead a little faster.
Mr. Jack McIntosh (Swift Current-Maple
Creek): Can the Secretary of State tell us what arrangements have been made to supply the residents of southwestern Saskatchewan with these facilities?


John Whitney Pickersgill: As the hon. member knows I am rather familiar with and quite sympathetic to the problems of the people of southwestern Saskatchewan. I shall make some inquiries, because I have not informed myself within the last day or two.


Mr. D. V. Pugh (Okanagan Boundary):: May
I ask a supplementary question.


Mr. Speaker:: Is the question urgent? Because this is taking on the nature of debate. If it is urgent, yes.


David Vaughan Pugh: You may not deem this question to be one of urgency, Mr. Speaker, but I would say it is just as urgent as the other questions have been. Has the Secretary of State looked into the television difficulties of the Boundary section in my constituency of Okanagan Boundary?


John Whitney Pickersgill: I will be glad to do so.


Mr. E. Nasserden (Rosthern):: I have a supplementary question on this matter. I wonder whether the Secretary of State could tell us whether any further consideration is being given to the problem of establishing a French television station in the province of Saskatchewan.


John Whitney Pickersgill: I could not give an answer to that offhand, but I can inquire.
(Translation):



WORLD FAIR


[Stage Direction]
On the orders of the day:
Mr. Jean-Pierre Cole (Longueuil):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs.
Could the minister advise the house as to whether he has received replies, in the
Inquiries of the Ministry affirmative or the negative, from the various countries which were invited to participate in the world fair which will be held in Montreal in 1967?


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Yes, Mr. Speaker. Great Britain and Belgium have accepted. Cambodia, the Dominican Republic, Laos, Morocco and Uganda have declined the invitation.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Megantic):: Mr. Speaker, I have a question for the Minister of Labour.
In view of the report which was published today in La Presse to the effect that the unemployment insurance fund is $25 million in the red, what steps does the minister consider taking to replenish the fund?
(Text):


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, usually at this time of the year the fund begins to replenish itself, and action at the present time is not required in order to assure that benefits will be paid in the usual manner.



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

[Stage Direction]
On the orders of the day:
Léon Balcer: Mr. Speaker, I would like to direct a question to the Minister of Transport. Is the minister in a position to tell us whether T.C.A. has decided against the purchase of the Caravelle, which was to be built 100 per cent in Montreal, in favour of two other types of medium jets of which only a smaller percentage would be built in Canada, as reported in La Presse of Saturday?


Hon. G. J. Mcllraiih (Minister of Transport):: Mr. Speaker, I did not see the report in the paper on Saturday, but no decision has yet been taken on the purchase of additional aircraft by T.C.A. That matter is not yet ready for decision. The reference to the Caravelle is not accurate because the matter has not come forward for decision.


Léon Balcer: As a supplementary question, could the minister tell us whether the government has asked T.C.A. not to go ahead with any purchase without referring the matter to the cabinet for approval?

Inquiries of the Ministry


George James McIlraith: Mr. Speaker, the government has asked T.C.A. not to proceed with the signing of any purchase order until the government has considered it, with particular reference to the Canadian labour content of any possible purchase in Canada.



COMBINES


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker, I should like to address a question to the Minister of Justice and ask him whether the government is prepared to accede to the request of the distributive trades advisory committee which presented a brief on July 8 last in which they asked the government to step up a marketing advisory council and to repeal section 34 of the Combines Investigation Act.


Hon. Lionel Chevrier (Minister of Justice):: Mr. Speaker, an official of the Department of Justice and the minister listened to the representations that were made on that occasion and are giving careful consideration to the request presented at that time.
(Translation):



QUEBEC-REQUEST FOR FEDERAL ASSISTANCE

[Stage Direction]
On the orders of the day:
Mr. Real Caouetie (Villeneuve):: Mr. Speaker, I should like to put a question to the Prime Minister. Will the victims of the tornado which struck the counties of Chapleau and Villeneuve on June 30 last, sweeping hundreds of farms and causing over $2 million damage, obtain some assistance from the federal government to enable them to rebuild the farm buildings destroyed?
(Text):


Lester Bowles Pearson: Mr. Speaker, the government will follow the normal course in this matter; that is, await the request from the provincial government for supplementary assistance to that government. That is the constitutional procedure. We have had no request from the provincial government for that kind of help.
(Translation):


David Réal Caouette: A supplementary question, Mr. Speaker. Does the government take due consideration of requests made by members of parliament when they ask for assistance on behalf of persons of any county in Canada who have suffered some damage? Are those requests duly considered by the government?


(Text):


Lester Bowles Pearson: No. Mr. Speaker. We can only act in regard to this matter when we have received a constitutional request from the province.
(Translation):



FINANCE


[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a question to the Minister of Justice. Does he intend to bring in some amendment to the Bankruptcy Act in order to prevent the existing abuses?


Lionel Chevrier: Mr. Speaker, that matter is under study. I must point out to the hon. member that a committee of the Department of Justice has been studying for quite some time the amendments to be made to the Bankruptcy Act.
In this connection a bill was introduced in the other place, and in due time that legislation will be brought before this house
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proposed to the Bankruptcy Act.
(Text):



INQUIRIES RESPECTING U.S. MODIFICATION OF TAX IMPOSED

[Stage Direction]
On the orders of the day:
Hon. George C. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, I would like to ask the Minister of Finance a question with respect to a news story which appeared in the press this morning as to a proposed meeting or conference between officials of the Department of Finance and United States treasury officials in Washington. Is the news story substantially correct; when will the meeting be held; what does the minister envisage will be the topics which will be discussed at that meeting and over what period will the meeting take place?


Hon. Waller L. Gordon (Minister of Finance):: Mr. Speaker, the hon. member was not quite clear about which news story or what the subject matter was.


George Clyde Nowlan: Are you having more than one conference in Washington over the week end?


Walter Lockhart Gordon: As I announced yesterday, a senior official of the Department of Finance went down to Washington yesterday afternoon, and I am planning to do down on Friday morning to discuss with the officials of the United States administration the whole subject of their proposed tax on foreign securities.


Righi Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, would the Minister of Finance be able to say whether discussions are continuing among the various nations in the western world to liberalize the machinery of the international monetary fund to provide for increased world liquidity? Is this matter receiving attention; and what is the general view of the government in this connection?


Walter Lockhart Gordon: Mr. Speaker, this matter is being considered and discussed by most of the countries of the western world. It is being considered by this government, and we hope that within a short time we will have some announcement to make about it.


Hon. Paul Marlineau (Poniiac-Temiscamingue):: I have a supplementary question, Mr. Speaker. Can the minister say which officials will accompany him on his Washington trip?


Walter Lockhart Gordon: Mr. Speaker, I do not believe it is customary to name the officials, but as it has been announced in the press I have no hesitation in saying that Mr. Plumptre, the assistant deputy minister, will be one of the officials.


Louis-Joseph Pigeon: And experts?


Horace Andrew (Bud) Olson: A supplementary question, Mr. Speaker. Could the minister inform the house whether the United States officials have indicated that they have encountered any of the difficulties he encountered in administering the proposed tax?


Walter Lockhart Gordon: Not to me, Mr. Speaker.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Ron Basford (Vancouver-Burrard):: Mr. Speaker, I have a question for the Minister of Fisheries. I am wondering whether the minister is able to give the house a report on the possibility of a settlement of the British Columbia fisheries strike.


Hon. H. J. Robichaud (Minisier of Fisheries):: Mr. Speaker, I regret that I am not in a position at this time to give a satisfactory answer as to the immediate possibility of a settlement of the British Columbia fishing strike. However, with the permission of the house may I read a press release that is being issued at this very moment. It is a joint press release issued by the federal government and the government of British Columbia, and reads as follows:
The federal Minister of Fisheries and the minister of labour for British Columbia met all day
Inquiries of the Ministry
yesterday in Vancouver to consider the present crisis in the British Columbia fishing industry. The current dispute is primarily concerned with the minimum prices to be received by fishermen from the sale of fish and no effective procedures presently exist to resolve this problem. In considering the current serious situation it was agreed that the fishermen should be urged to return to work forthwith. While there may be a valid dispute between the union and the fisheries association, it does however prevent the harvesting of this valuable resource. Unless fishing is resumed immediately some runs will be missed completely and some may be damaged by excessive spawning escapement.
The fishery resource is one whose harvest must be kept under strict control. Failure to harvest, with overseeding of spawning beds, could be as disastrous as overtake. A balance has to be maintained to keep stocks at a high productive level.
It is the joint recommendation of both governments that fishing be resumed immediately and that the matters in dispute be submitted to arbitration for final and binding decision. To expedite the proceedings the federal and provincial governments are prepared to appoint on request, if the parties agree, a single arbitrator to commence hearings immediately.
However, no further losses to the workmen, the industry or the national economy should be allowed to continue and hence the recommendation that fishing be resumed forthwith. To seek a long term solution to the problem the federal and provincial governments have agreed to appoint a committee consisting of three representatives of the federal government and three representatives of the provincial government to examine in detail the problems concerned with price and wage disputes in the British Columbia fishing industry and to submit to both governments recommendations of action necessary to minimize interruptions of fishing operations in the future.


Mr. T. S. Barnett (Comox-Alberni):: I have a question for the Minister of Fisheries arising out of the announcement he made earlier today concerning the appointment of a committee or commission to make a long range investigation into the fishing industry in British Columbia. I should like the minister to inform the house in a more specific way as to the nature of this commission and its terms of reference. If the members have already been chosen I, for one, would certainly like to have that information also.


Hédard-J. Robichaud: In reply I wish to say that the personnel has not yet been chosen, and when the terms of reference have been decided on an announcement will be made.


Thomas Speakman Barnett: Can the minister not indicate to the house, at least in a general way, the nature of this commission? Is it to be a joint royal commission set up by the federal and provincial governments, or is it to be a study by a working committee at civil service level to advise the two governments?


Hédard-J. Robichaud: If possible the committee will be formed of civil servants at high level from the Departments of Justice, Fisheries and Labour.

Inquiries of the Ministry


Thomas Speakman Barnett: Can the minister advise the house under which department of government responsibility for this committee will lie?


Hédard-J. Robichaud: That decision will be made later.


Mr. Douglas:: Will the report of this committee be published?


Hédard-J. Robichaud: I understand the meetings will be held in camera. If the report is to be made public, a decision will be reached at the time in co-operation with the provincial government.


Mr. Barry Maiher (New Westminster):: Mr. Speaker, I have a question I should like to direct to the Minister of Fisheries in connection with the joint statement being made by the federal and provincial authorities urging striking fishermen in British Columbia to return to work pending settlement of their dispute.
My question is, has this recommendation been made directly to the fishermen's association in British Columbia and the fishermen's
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the press release?


Hédard-J. Robichaud: I am sorry, but I could not hear the last part of the hon. member's question.


Barry Mather: I said, has the recommendation been made directly or formally to the disputants in the proceeding, or will they simply read about it in the press release?


Hédard-J. Robichaud: No, Mr. Speaker, the two parties have not been notified of the decision made by the two governments. They must know by now, since the release was made at three o'clock today.


Thomas Clement (Tommy) Douglas: May I ask a supplementary question? Have any of the federal government's conciliation services been made available to these two groups?


Hédard-J. Robichaud: No, Mr. Speaker.



NORRIS COMMISSION-INQUIRY AS TO GOVERNMENT ACTION

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: May I direct a question to the Prime Minister. Last week the right hon. gentleman indicated that there might be legislation arising out of some of the recommendations of the Norris commission before the summer recess. I wonder if he is now in a position to say definitely whether such legislation is likely to be brought down.


Lester Bowles Pearson: No, Mr. Speaker, but I hope to be in a position to do so tomorrow.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Secretary of State for External Affairs. It is topical. In view of the news that according to the judgment of Mr. Justice Sherwood Lett the greater portion of the property of the British Columbia hydro authority is illegally held, under these circumstances does the minister consider it legal, ethical or wise to continue discussions with the co-chairman of the British Columbia hydro authority with respect to the Columbia river treaty?


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, as my hon. friend knows the attorney general of the province of British Columbia has announced that the government of that province has decided to appeal the judgment of Chief Justice Sherwood Lett. The matter is therefore sub judice and, of course, does not in any way affect the procedures which I outlined to the house some time ago.


John George Diefenbaker: Mr. Speaker, it would not be sub judice to ask the hon. gentleman this question. In view of the serious consequences that will flow from this judgment, is it the intention of the government of Canada to be represented by counsel on the appeal?


Mr. Martin (Essex East):: I will discuss the matter with the Minister of Justice, but I should not think there would be any representation by counsel of the federal government in the matter.


John George Diefenbaker: Is it not a fact that if this judgment stands-and I am not criticizing it in any way-it pretty nearly puts an end to the relationship in so far as the Columbia river project is concerned and the co-operation between the government of Canada and the government of British Columbia?


Paul Joseph James Martin: Mr. Speaker, the right hon. gentleman is of course aware that the province of British Columbia continues to be the owner of the resource, and no judgment of any court can alter that constitutional fact.
Hon. George C. Nowlan (Digby-Annapolis-
Kings): Mr. Speaker, I know the minister cannot deal with any discussion going on between nations or between powers, but is

Inquiries of the Ministry
it right to assume that there are discussions the bill to reduce from 12 to 10 the number of going on between the hon. gentleman in members a party must have if its leader is to his capacity as Secretary of State for External receive the additional amount of $4,000? Affairs and the representatives of the United	...
States, to arrange for a postponement of ex '
any action which otherwise would be deter- Hon. J. W. Pickersgill (Secretary of State):
mined upon until this matter goes through Mr. Speaker, I would think the life expect-the courts, which may take some months or ancy of this group is so short that it would some years?	not be worth while.


Paul Joseph James Martin: The hon. gentleman is quite wrong in the conclusion he draws.


George Clyde Nowlan: Which one?



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I have a question for the Minister of Transport. Could the minister advise the house whether he has anything further to report concerning any plans there may be for either the repair or the replacement of the runways at the Department of Transport airport at The Pas, Manitoba?


George James McIlraith: No, Mr. Speaker, but I will look into the matter and see whether I can give some more information before the house adjourns for the summer vacation.


Robert Simpson: A supplementary question. Is the minister in a position to say whether there are any other Department of Transport airports in Canada where it has been necessary to place restrictions on aircraft on account of deterioration of runways?


George James McIlraith: There undoubtedly are restrictions on some airports in Canada as to the weight of the planes using the airports; but I will follow up on the question of the particular airport in which the hon. member is interested and get whatever information is available either tomorrow or the next day.
(Translation):



SUGGESTED CHANGE RESPECTING INDEMNITIES TO PARTY LEADERS

[Stage Direction]
On the orders of the day:
Mr. Gerard Chapdelaine (Sherbrooke):: Mr. Speaker, may I direct a question to the Secretary of State? In view of the report published in a Montreal newspaper to the effect that the right hon. Leader of the Opposition (Mr. Diefenbaker) yesterday headed a group of ten members who voted against the parliamentary indemnity increase, could the minister tell the house if he intends to amend


John George Diefenbaker: Mr. Speaker, that is the first time I have ever heard the minister refer to those associated with him as "this group".


John Whitney Pickersgill: On a question of privilege, sir, I think the right hon. gentleman must have misunderstood the question. It was the group associated with him to which the question related.


John George Diefenbaker: No, you cannot fix it up.
(Translation):


Mr. Georges Valade (St. Mary):: Mr. Speaker, I raise a question of privilege. It concerns the question asked by the hon. member for Sherbrooke (Mr. Chapdelaine). Since both the question and the reply referred to a vote taken in this house and our standing orders state that hon. members cannot comment on the stand taken by a member when a question is put to the house-


An hon. Member:: What about your leader?


Georges-J. Valade: I would rather refer to my leader than to yours. The question asked by the hon. member for Sherbrooke was out of order and, therefore, so was the reply. I would point out to the house-
(Text):


Mr. Speaker:: Order, please.


Georges-J. Valade: Mr. Speaker, I have the floor but the Liberal party are obstructing me all the time, as they always do. I believe I have as much right, Mr. Speaker, to raise a question of privilege as the funny man from Bonavista-Twillingate, who raised a point of order. My question is-


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. I have been listening attentively to the interesting remarks of the hon. member for Sherbrooke and also the hon. member for St. Mary. I think we should leave it there.


Georges-J. Valade: I did not conclude my question of privilege, Mr. Speaker, because of the obstruction from the other side.


Mr. Speaker:: If there was a question of privilege it certainly evaporated in the ensuing discussion.

Inquiries of the Ministry



INQUIRY AS TO PAY INCREASES FOR CERTAIN STAFF MEMBERS

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Finance. Is the minister yet in a position to indicate whether a decision has been made regarding pay increases for those members of the House of Commons staff who were to get increases along with those given to group D of the civil service?


Walter Lockhart Gordon: Mr. Speaker, I can assure the hon. member that the matter has not been overlooked, and I would think that Your Honour may have some announcement to make in due course.


Stanley Howard Knowles: Could the Minister of
Finance say how long "due course" is in this case?


Walter Lockhart Gordon: I am hardly in a position to speak for His Honour on that question.



DOMINION-PROVINCIAL CONFERENCE INQUIRY AS TO INVITATIONS TO YUKON AND NORTHWEST TERRITORIES

[Stage Direction]
On the orders of the day:
Mr. Gene Rheaume (Northwest Territories):: Mr. Speaker, on several occasions in this house I have asked the Prime Minister about the possibility of allowing the governments of the Yukon and Northwest Territories to participate more actively in federal-provincial conferences. I wonder whether the Prime Minister is in a position to advise the house of the result of his investigations.


Lester Bowles Pearson: Mr. Speaker, the question of their participation in the conference which met last week end was examined, but it was decided not to extend an invitation for this conference. For one thing it would have required the approval of all the provincial representatives. This question has arisen previously, in 1960, when the government of that day decided it was not appropriate to extend invitations of this kind. We are having the question looked into in view of the next provincial conference; but in any event, whether or not the Yukon and Northwest Territories are represented, we will make sure that they are informed of what happened last week end, and that all information which bears on their problems will be sent to them by the minister of northern affairs, who was attending the conference.



BRIDGES


[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, I should like to address my question to the Minister of Transport and receive a direct answer. Can the minister inform the house whether the tolls on the Champlain bridge will be abolished? Yes or no?


George James McIlraith: Mr. Speaker, the hon. member evidently has not read Hansard carefully or he would have seen that this question was raised earlier in the session, and I answered that the matter was receiving attention. It is under consideration now.


Louis-Joseph Pigeon: That is not yes or no.
(Translation):



IMMIGRATION


[Stage Direction]
On the orders of the day:
Paul Raymond Martineau: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. Did he receive a brief from the leaders of Chinese communities in Canada asking for an improvement in landing conditions of relatives in Canada? If so, could he tell the house what action he intends to take in that regard?


Hon. Guy Favreau (Minister of Citizenship and Immigration):: Mr. Speaker, I should like to thank the hon. member for giving me notice of his question before I entered the house.
I take this opportunity to inform the house that some ten days ago the hon. member for St. Paul (Mr. Wahn), accompanied a delegation of Chinese group leaders from Toronto, Hamilton, Montreal and Ottawa, and I wish to call the attention of the house to their serious and reasonable behaviour and representations.
We had quite a long discussion and I pointed out to them that of their three suggestions, two were raising problems of government policy which were at present under study by the officials of my department following instructions I had given them.
As for their third suggestion, it was in connection with problems or difficulties raised by the overflow, shall we say, of procedures to be followed in Hong Kong.

At the present time I am considering the opportunity and even the necessity to delegate one of my officials to Hong Kong and, if it is possible, to go there myself soon in order to see whether the delays could not be reduced.
In any case, my hon. friend and the other members can rest assured that this complex and human interest issue shall be extensively considered and that as soon as it is possible to arrive at a solution, that solution will be submitted to the cabinet in the shortest possible time.


Paul Raymond Martineau: Mr. Speaker, I have a supplementary question. Did the minister or the government give those people assurance that an independent tribunal would be established shortly to look after those applications for admission?


Guy Favreau: No, Mr. Speaker, I gave no assurance that any particular tribunal would be established. I simply stated that one of the numerous possible solutions which we would have to consider was the establishment of a tribunal or a near-judiciary body which would advise the minister, or some kind of a system of appeal from the decision of the officials. However, no decision has been announced because, of course, until the government has adopted some specific measure, I shall be unable to inform the house; besides, I would not be allowed to do so before a decision is reached.
(Text):



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Grant Deachman (Vancouver Quadra):: I have a question to ask the Minister of Northern Affairs and National Resources. Has the minister taken note of the current references in the press to the gradual reduction in the whooping crane population which has now declined from 38 to 28-almost in the same ratio as the decline of the N.D.P.-and can he advise what new steps are being taken by the wildlife branch to preserve these rare and curious birds?


An hon. Member:: Which; the birds or the N.D.P.?


Thomas Clement (Tommy) Douglas: I can assure the hon. member that the N.D.P. are in no way related to wildlife.
28902-5-177
Inquiries of the Ministry CANADIAN NATIONAL RAILWAYS



ST. JOHN'S, NFLD.-REPORTED LAY-OFF OF DOCK WORKERS

[Stage Direction]
On the orders of the day:
Mr. Richard Cashin (St. John's West):: I wish to address a question to the Minister of Transport. Has the minister received any communication or request from representatives of the unions at the C.N.R. dockyard in St. John's, Newfoundland, pertaining to recent lay-offs? If so, would he be willing to meet with a delegation from those unions to discuss this problem?


George James McIlraith: The answer to the first question is no. The answer to the second question is yes. But I should add that the Leader of the Opposition asked a question on this subject yesterday. I am trying to get full information to answer that question, and also to see if there is any work available which could be put into that dockyard.



FORESTRY


[Stage Direction]
On the orders of the day:
Mr. Robert Temple (Hastings South):: have a question for the Minister of Forestry. In view of the rapidly increasing prevalence in Ontario of Dutch elm disease, is the minister's department conducting any research into this serious problem?


Hon. J. R. Nicholson (Minister of Forestry):: I thank the hon. member for having given me verbal notice of this question. The answer is yes. Although responsibility for the protection of shade trees rests primarily with the municipalities, the Department of Forestry has been conducting intensive research to improve control practices and to develop a cure for this very serious disease. As a result of work done at the forest research laboratory in Quebec a species of elm resistant to the disease has now been developed. These trees are being tested to determine the degree and permanence of the resistance. Upon request the Department of Forestry will provide technical assistance, including diagnostic services, to municipalities and others who are interested in control procedures.


Mr. G. H. Aiken (Parry Sound-Muskoka):: On a point of order, Mr. Speaker, today the Minister of Fisheries and the Minister of Forestry have both made statements of the type usually made on motions. These statements have been made, however, in answer to questions. I refer particularly to the statement made by the Minister of Fisheries in

Inquiries of the Ministry which he said an announcement was being made simultaneously. I wondered at the time whether he would have made the statement in any case if he had not been asked the question. I should merely like to raise the point of order at this time that long and extended statements of government policy ought to be made on motions and not in answer to planted questions.


Mr. Speaker:: I think the point taken by the hon. member is quite correct. They were allowed due to the anticipated adjournment of the present session. In view of the fact that there may be only a few more days I thought it would be advisable at this time to let the statements go, but I think the point is well taken. Statements today have been long. If they are going to be that lengthy in the future I do think they should be made on motions, and if questions are to be short I think that replies should be short also, if possible.
( Translation):



PENITENTIARIES


[Stage Direction]
On the orders of the day:
Raymond Langlois: Mr. Speaker, my question is directed to the Minister of Justice.
Does the minister intend to implement the recommendations made by the wives of the guards at the St. Vincent de Paul penitentiary, in order to ensure the security of their husbands?


Lionel Chevrier: Mr. Speaker, I am unaware of representations made along the lines indicated by my hon. friend. When those representations are brought to my attention, I can assure him, as well as other members who would be interested in the matter, that those representations will receive careful study.


Raymond Langlois: Mr. Speaker, I should like to put a supplementary question to the Minister of Justice.
Can the minister tell us the source of the article published in today's La Presse, on page 3, in which it is stated that the minister received a delegation of the wives of the penitentiary guards, in Ottawa?


Louis-Joseph Pigeon: It is rather the Voice of Women.


Lionel Chevrier: I am not responsible for articles appearing in La Presse, the great press.

(Text):



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I direct my question to the Minister of Industry. In view of the fact it is generally reported that three Japanese steel firms are planning to take part in the development of the iron ore deposits in the Yukon-Northwest Territories border area, with pipe line connections both for ore and oil to the United States coast, could the minister inform us what action the government is taking to see that both the steel processing and oil refinery are established on Canadian soil?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I am not entirely familiar with these negotiations, but I would ask my hon. friend to bear in mind that it is the Japanese companies which are proposing to purchase and develop the iron ore. Perhaps the Canadian government is not in a preferred posiif a., i^	iUnwi nnr>
oncci r\n o nf VVl C*
non lu uviiiuiiu i* wixi	-
type the hon. member mentioned.



ROYAL CANADIAN AIR FORCE


[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Royal: Mr. Speaker, I have a question for the Minister of National Defence. Will the minister agree to investigate the report carried in yesterday's Montreal Gazette of strained relations between the R.C.A.F. and civilians at Goose Bay, where the disruption has been sufficient to cause the intervention of Premier Smallwood and the making of charges of harassment and countercharges of a vendetta?


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, I have not seen the report referred to but I shall look into it.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Edward Nasserden: I should like to direct a question to the Prime Minister. In view of the strained state of Canada-United States relations, would the Prime Minister consider activating the Canada-United States parliamentary group with a view to alleviating this situation?


Lester Bowles Pearson: I do not know of any strained relations since April, Mr. Speaker, but I hope that this joint

committee of congressmen and parliamentarians will be able to meet very shortly.


Edward Nasserden: A supplementary question. If there are no strained relations then why is the Minister of Finance going to the United
States?


Some hon. Members:: Order.


Mr. Speaker:: Order. Perhaps I can satisfy the hon. member. I have been in active communication with my counterpart in the United States and tentatively the month of January is set as a possible time for a meeting.



PENSIONS


[Stage Direction]
On the orders of the day:
Paul Raymond Martineau: Mr. Speaker, I have a question for the Minister of National Health and Welfare. In view of her reported statement that Premier John Robarts and a group of actuaries were "guessing and guessing wrongly" about the proposed cost of the pension plan, will she tell the house upon what basis her own costs compilation was made?



SHIPPING


[Stage Direction]
On the orders of the day:
Eugène (Gene) Rhéaume: Mr. Speaker, I have a question for the Minister of Transport arising out of a newspaper report last evening that the 4,000 ton Danish freighter Helga Dan is trapped in the ice some 160 miles east of Resolute bay. Will the Minister of Transport assure me that the services of the icebreakers of his department will be made available to this ship in distress?


George James McIlraith: Yes, Mr. Speaker, but I am not sure from the newspaper report what the exact situation is and what is required to free the ship.



RAPESEED


[Stage Direction]
On the orders of the day:
Mitchell William Sharp: Mr. Speaker, the hon. member for Humboldt-Melfort-Tisdale in my absence yesterday asked me to report on the inquiries I had been making about the sale of rapeseed to Japan and other countries. I should like to inform the hon. member that in recent months my departmental officials in Ottawa have been in contact on numerous occasions with our 28902-5-1771
Inquiries of the Ministry trade commissioner's office in Tokyo as well as with Japanese government officials regarding prospects for the sale of Canadian rapeseed to Japan. There is every indication that Japan will import a greater volume of rapeseed from Canada this year than last year. Sales are being negotiated by Canadian exporters with Japanese buyers as well as with European buyers, and it would appear that there will be little difficulty in marketing the Canadian rapeseed crop in our usual export markets, including Japan.



O.E.C.D.-PARLIAMENTARY RATIFICATION OF INCLUSION OF JAPAN

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Is it the intention of the government to bring before parliament ratification of the inclusion of Japan in the O.E.C.D. and, if so, when?


Paul Joseph James Martin: Mr. Speaker, this matter is now being considered, and I may have something to say before we adjourn.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Fred F. Slenson (Peterborough):: Mr. Speaker, I wish to address a question to the Minister of Justice. Has anyone approached him in regard to some type of protection for people taking charter trips out of this country who are being left stranded many miles away from home, such as the group in Britain at the present time?


Lionel Chevrier: Mr. Speaker, the answer is no, and I take it the reason is that a matter of this kind would normally come under the jurisdiction of the Department of Transport, which I think authorizes trips of this kind. If there is a question affecting the Department of Justice and the hon. member will bring it to my attention, I shall be only too pleased to look into it.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Léon Balcer: Mr. Speaker, I should like to ask the Minister of National Defence if he can tell the house whether he will be in a position to announce a decision on the matter of the frigates and submarines for the Royal Canadian Navy

Excise Tax Act
before the recess, or is he going to make this decision public while the house is not sitting?


Paul Theodore Hellyer: I do not think it will be possible to make any announcement before the house rises, Mr. Speaker, but I hope that a decision will not be too long delayed.
(Translation):



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Lucien Plourde (Quebec West):: Mr. Speaker, I should like to direct a question to the Postmaster General. Is he aware that letter carriers in Ottawa and Quebec city have not been given summer shirts for more than two years and does he intend to remedy soon that anomalous situation?


Hon. Azellus Denis (Postmaster General):: Mr. Speaker, I inquired into the matter. Unfortunately, because of some delay in the carrying out of that contract, the issue of those summer shirts has been somewhat late. However, i am under iiie mipicSSicn that there is a sufficient quantity of those shirts today for all those who need them.
(Text):



SENATE AND HOUSE OF COMMONS ACT


John Whitney Pickersgill: third reading of Bill No. C-91, to amend the Senate and House of Commons Act and the Members of Parliament Retiring Allowances Act.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


John George Diefenbaker: On division.
Motion agreed to and bill read the third time and passed.



JUDGES ACT


Lionel Chevrier: the third reading of Bill No. C-92, to amend the Judges Act and the Criminal Code.
Motion agreed to and bill read the third time and passed.



EXCISE TAX ACT

[Stage Direction]
The house resumed, from Thursday, July 25, consideration in committee of Bill No. [Mr. BalcerJ
C-90, to amend the Excise Tax Act-Mr. Gordon-Mr. Lamoureux in the chair.
On clause 4-Refund of tax paid on goods for use in sewerage or drainage systems.
Walter Lockhart Gordon: During the consideration of clause 4 of the bill last Thursday evening there was considerable discussion concerning the fact that certain areas are not called municipalities, and a number of hon. members offered suggestions about what should or should not be classed as municipalities. I promised to look into the matter, and I have had an opportunity of doing so in the meantime. I have been able to examine carefully the various suggestions put forward by hon. members, and I now have an amendment which the Secretary of State wishes to place before the committee to define the scope of the term "municipality".
When we began to examine this matter, even before Thursday, we found it to be more complicated than at first it appeared. On Thursday evening several members, including the hon. member for Churchill and the hon. member for Royal, suggested that anything which a province declared to be or designated as a municipality should also be classed as a municipality for the purposes of the Excise Tax Act. We found, however, that the provinces sometimes defined municipalities in different ways for different purposes in different acts. There would have been some uncertainty as to which definition would apply. Moreover, there is no uniformity among provinces in the way in which they define municipalities. Therefore to accept a provincial definition might have given more generous exemption in one province than in another.
Now, in searching for a definition we had to keep in mind that there must be some government body to which the exemptions could be extended or refunds paid. The exemption from sales tax for certain municipal purchases is not a direct exemption for individuals, although of course individuals residing in the municipalities benefit. This is an exemption for a governing body to help it meet the serious problem of financing the expansion of public services in its area.
Subject to this requirement, it was our aim to make the definition as broad as possible. We are therefore proposing a definition of municipality which will be very similar to the definition which it is proposed to use in the municipal development and loan act. The definition proposed refers to city, town, village, district, rural municipality or other incorporated municipal body; that is, it refers specifically to all the forms of organization

generally regarded as providing local government. However, because of the difficulty of foreseeing or describing other kinds of local authorities which may develop from time to time, it is proposed, if this is agreeable to hon. members of the committee, that the definition contain a provision giving the governor in council power to determine that such other local authority as the governor in council may determine, shall be a municipality for the purpose of this act.
It is a question whether the members of the committee wish to give this power to the governor in council. Short of that it will be very difficult to arrive at a definition that will cover every conceivable set of circumstances. I think it should be noted that the definition proposed will apply to the important list of exemptions for municipal purchases already in the Excise Tax Act as well as exemption for materials for sewerage and drainage systems described in the bill now before the committee. For that reason it is suggested that the clauses be renumbered so that this definition will appear at the beginning of the bill. The words which appear at the end of clause 4 read as follows:
For the purpose of this subsection any agency operating a sewerage or drainage system for or on behalf of a municipality may be declared by the minister to be a municipality.
These words were added to the act in 1958, when the exemptions for materials purchased by municipalities for sewerage and drainage systems were included. The purpose of these words is to extend the exemption to agencies such as the Ontario water resources commission, and it is proposed to retain these words in the existing clause 4.


Mr. Lambert:: Will the minister agree this presupposes the existence of a municipality?


Walter Lockhart Gordon: That is correct.


Norman Platt Lambert: And if you have not got the initial municipality you cannot have an agency.


Walter Lockhart Gordon: As the hon. member for Edmonton West has pointed out, this is the problem and it is a very difficult one. There must be some agency of some incorporated body to whom the refunds can be made. It is not intended to make these refunds payable to individuals, and this I think will cover the points that were raised on Thursday.


Robert Simpson: Could the minister say
whether in his opinion this new amendment would apply to the provincial bodies I mentioned, such as local government districts? These areas are eligible under the winter works program. They are not municipalities in the correct sense of the word, but they
Excise Tax Act
are eligible under the winter works program, and I would hope they would be included in this.


Walter Lockhart Gordon: Before we talk about it I wonder if we could have the amendment read. I think it will be a little easier then; but to answer the question quickly, it will be possible under the proposed amendment for the Minister of National Revenue to recommend that this be done by order in council. It will be the intention to cover the kind of municipalities which the hon. member has in mind. I do not know any other way of bringing them in under the net except by doing this.
Before I ask the Secretary of State to move this amendment concerning municipalities I should also like to say that I have reviewed the representations made by hon. members, especially by the hon. member for York-Humber and the hon. member for Port Arthur, and by the others outside the house, to the effect that the exception for building materials for schools and universities should be extended to cover building materials for use in the construction of public libraries. We have come to the conclusion that such an exemption should be provided, and when the amendment concerning municipalities has been dealt with and we move on to clause 5 we shall put forward an amendment to that effect.


Mr. Rynard:: Sometimes under the law a person is forced by the health act of a province or municipality to put in a sewerage system, and I would ask the minister whether some clause could be introduced to give the same treatment to an individual as to a municipality.


Walter Lockhart Gordon: That would open the matter up further than I think the government would be prepared to go. There are all sorts of restrictions and rules imposed, not only by the municipalities, but by the provincial governments. For example, there are building regulations which require individuals to build certain types of houses, and it would not be the intention in that case to relieve them of paying this particular tax. The great trouble about this as I think we all appreciate by now, is the question of knowing where to draw the line. In this case it was thought we would be in difficulty if we went further than the amendment which the Secretary of State was on the point of moving a few moments ago.


Philip Bernard Rynard: I know of a case where a man is being forced to do this work. If he comes within the two years he is all right, but if it is over that he is caught and the municipality will be taking over the area and incorporating it. This is going to be very unfair on an individual who is living on the outskirts of a municipality. If a provincial or

Excise Tax Act
municipal board of health forces a person to do this then, with all due respect to the minister, I feel we should give the individual a break.


Stanley James Korchinski: I would like to ask the
minister how much revenue is involved in this obviously complicated clause. If it is not such a huge amount perhaps he might consider other points, and might even consider withdrawing it.


Walter Lockhart Gordon: It is a substantial amount. I do not think anybody can tell exactly, but if we start to make exemptions for people living in rural areas there will be quite a conflict with people living in urban areas, and the hope is that they will be treated on substantially the same basis. That is why if we start making exemptions for individuals, we will be in real trouble unless we make them for all individuals, and if we make them for all individuals then there is no point in distinguishing whether the work is for a drainage or sewerage system. You might as well apply the exemption to all building materials, and the first thing we will know is that we have not got a tax at all.


Stanley James Korchinski: Could the minister indicate any round figure of revenue?


Walter Lockhart Gordon: I do not think there is any way of giving an estimate that I would be happy about. It depends on how far the exemption suggested by the hon. member for Simcoe East would go. I do not think you can limit it to people in rural municipalities.


Stanley James Korchinski: This is an unusual situation. The minister proposes to introduce a tax and he has no idea how much revenue will be brought in by it. If he has no idea then maybe it will not bring in anything. On the other hand it may bring in $100 million. If it were something like $500,000 then it might be unnecessary because it would cost a lot of money to collect it.


Walter Lockhart Gordon: We have some estimate of the totals involved. At 4 per cent the totals involved come to something over $100 million for all the things that will be covered. One would have to be very precise in knowing what the additional exemption might involve before any kind of estimate could be made about that, but the more exemptions are made the more difficulties are encountered.


Mr. Willoughby:: Mr. Chairman, earlier this session I asked the Minister of Finance a question similar to the one I am going to ask now. The minister referred the matter to the Minister of National Revenue at that time. I do not see it mentioned in the bill
that is before us, so I would like to get some confirmation on whether consideration has been given to municipalities which have committed themselves, not by tender but by bylaw, to putting up public buildings such as city halls, where the actual contract has not been submitted. They will now be caught between a fixed price under the by-law and a contract price that has been called. I asked at the time whether it would be possible under circumstances of this type to have it considered as a contract. It is definitely a contract between the municipal and city authorities.


Walter Lockhart Gordon: Mr. Chairman, I wonder
whether the hon. member would be willing to wait until we get to the clause of the bill dealing with refunds generally. I think it is clause 9.
Perhaps before this particular amendment is moved I might also refer to the question of certain building materials that are competitive. We have tried to take into account those situations where the imposition of the sales tax on building materials may result in serious competitive inequality where goods fabricated off the site of construction compete directly with goods that can be constructed on the site. In line with this purpose the bill contains a provision to provide that prefabricated buildings will not be taxable on their selling price, and the manufacturers of such buildings will have to pay sales tax on the materials they purchase. Similarly the manufacturers of structural building sections such as precast, prestressed concrete building sections or pillars are not regarded as manufacturers for sales tax purposes because these products compete with concrete sections that can be poured as the building is erected. The same rule will apply for manufacturers of concrete or cinder building blocks because these compete with poured concrete walls.
It has now been brought to our attention that a similar situation exists with respect to structural steel for buildings, which of course competes directly with prestressed forms. It is usual for the steel that goes into a building to be designed and cut to size on the premises of fabricating companies and delivered to the building site ready for erection. This steel competes directly with reinforced concrete poured on the site. In the case of concrete poured on site the labour involved does not enter into the base for sales tax. In the case of steel the labour involved in fabricating does become part of the price that is subject to sales tax. It is therefore proposed that an amendment be made which will have the effect of excluding from the base for sales tax that part of the selling price of steel which arises from the fabricating work done off the

building site. It will take the form of a further paragraph to the new subclause (2b) added by clause 2 on page 1. The effect of this amendment will be that fabricators of structural steel for buildings will buy steel on which the sales tax is imposed but will not have to pay sales tax on the fabricated structural steel they sell.


Horace Andrew (Bud) Olson: There is one other area, Mr. Chairman, where I think there is an unfair competitive advantage. This matter has been brought to my attention since we passed clause 2, and I am very happy that the minister has mentioned it. I refer to the unwarranted competitive advantage given to what may be interpreted as building bricks or concrete bricks and cinder blocks. Over the past few years-I think it is fairly recent- the concrete block industry have developed a product that is very, very similar to the burnt brick in colour, size, etc. In the case of burnt brick the manufacturers are required to pay sales tax, I understand, under the bill that is being considered, on the clay, firing, labour and all the other component costs that go into the finished product; whereas with a concrete brick or block they are exempt from sales tax, I take it, in relation to the labour and the aggregate, which is the block, of course. The only thing they would pay sales tax on would be the cement that went into the concrete block.
I know there are going to be problems in making a ruling and an interpretation that would not change the competitive factor between these two types of bricks. But I would like to point out to the minister that there is very definitely, I think, an unwarranted competitive advantage given to the manufacturers of this type of brick in relation to the situation that existed previously. I wonder whether the minister would care to comment on this matter.


Walter Lockhart Gordon: Mr. Chairman, I think the hon. member has very successfully pointed out- more successfully than perhaps I have- the difficulty of knowing where to draw the line in these things. As I said, the reason for the exemption being given to concrete blocks, which are not quite, as I understand it, comparable with bricks, was that you can either make a concrete block in a separate plant or you can pour mixed concrete on the site. If you extend this to ordinary bricks that are fired or burnt in a kiln, then I presume the next question would be, should you not exclude lumber or steel siding or any of the other building materials that can be used as alternatives. This is a difficult problem. I do not think I would be prepared to go further than this at the moment.
Excise Tax Act


Horace Andrew (Bud) Olson: Mr. Chairman, it might be unusual, but I do not believe I am asking for more exemptions. It might even be interpreted that I am committing suicide by asking for a tax to be placed on something so the competitive advantage will not be changed. The aggregate that goes into these concrete bricks is exempt at the present time; in fact everything that goes into the construction of these bricks is exempt except that they may have paid sales tax on the cement that went into them.
The point I am trying to make is that the minister is changing the competitive advantage for those types of concrete blocks that are used in the same way as concrete poured on the site. But this is not the kind of brick I am talking about.


Walter Lockhart Gordon: If I may deal with that point, Mr. Chairman, there is a distinction between a concrete block and a concrete brick. The concrete brick is subject to tax, just the same as the burnt brick. The exemption does not apply to concrete bricks.


Mr. Weichel:: Mr. Chairman, I would like to direct a question to the minister. He mentioned previously something about a tax exemption on libraries and schools. Would that also include houses of worship, churches?


Walter Lockhart Gordon: No, Mr. Chairman.


Thomas Speakman Barnett: Mr. Chairman, the minister made reference to the proposal that prefabricated structural steel forms would be exempt, if I heard him aright, and I listened attentively to him as he outlined his proposal. The question that arises in my mind as a result of his remarks is, what is the situation with respect to laminated wood forms such as are coming into quite frequent use for roof structures?


Walter Lockhart Gordon: It was not proposed that the exemption be extended that far.


Thomas Speakman Barnett: I should like to see some distinction drawn between the functions of prefabricated structural steel forms and prefabricated wood forms. I think the minister understands that as a member from British Columbia I am quite interested in the use of such wood forms, which are manufactured in my province. The minister also knows that we have not anything by way of a steel industry in British Columbia compared with other parts of Canada.
(Translation):


Louis-Joseph Pigeon: Mr. Chairman, may I make a few observations with a view to obtaining the minister's reasons for not granting a blanket exemption on all building materials purchased by local and provincial governments, as well as by provincial crown corporations such as Quebec hydro?

Excise Tax Act
When the minister announced that 11 per cent tax, which has been reduced to 4 per cent, the Quebec premier judged it rather harshly. He mentioned, among other things, that it ran counter to provincial autonomy in general, and more particularly to the autonomy of Quebec.
If the minister really wishes provincial and municipal governments to start building programs on a large scale, I suggest that the government would be wise to exempt completely from the tax all building materials they will need. The government would collect the tax anyhow, in a roundabout way, as those programs would put people to work and the workers would pay income tax.
Actually, it would be an excellent thing. I also would like the minister to tell us, according to his own estimations or those of his officials, how much that new tax-I mean the 4 per cent tax on building materials-might bring in per annum?
(Text):


Walter Lockhart Gordon: If I might answer the hon. member for Joliette-L'Assomption-Montcalm
11- -	1-1-1-1-X

_1___	___ ____X___X J
xixot, wxxc lvxxcxx oaico iaA cuaugco axe eoxxxixauevx
to increase the revenue over the current fiscal year by $70 million and next year by $285 million. That is the total.
In reply to the hon. member for Comox-Alberni, in dealing with these different alternative forms of construction materials, an attempt is being made to place the material that is usually constructed off site, but could be constructed on site, in essentially the same position as those materials which are normally constructed or formed on site. That means that a concrete block is essentially the same as poured concrete on site. The next item which was considered was concrete slabs or concrete forms which could be produced on site but, like prefabricated houses, are sometimes produced off site. Because they are essentially the same as poured concrete they could be constructed on site. These items are directly in competition with the steel beams which are probably under pretty heavy pressure these days from concrete, and it was decided, as I said, to suggest an amendment which would take care of them.
The laminated wood forms mentioned by the hon. member are not, and I do not think could be, manufactured on the site. I agree it is a complication, but it is one that I am certainly not sufficiently familiar with at the moment to feel confident to exclude. I am reasonably confident about the others because I have gone into them very carefully, but on

the point raised by the hon. member I think I should like more time to go into it with the industry concerned than is possible now. I can only undertake to do it before the act comes up for revision next time.


Thomas Clement (Tommy) Douglas: Mr. Chairman, just one matter. When the legislation was at the resolution stage the matter of mobile homes and travel trailers was raised, and I believe the minister said he would study it. Compared with a house built on site where the sales tax is paid on the material, the competitive position of a trailer or a mobile home which is built off site, and a good part of the cost of erection of which represents labour costs in making windows, doors, different mouldings and so on, I think requires consideration. I understood the minister would look into the problem of this particular industry.


Walter Lockhart Gordon: Would the hon. member allow me to wait on that till we come to the clause of the bill dealing with that particular point?


Mr. McIntosh:: I was going to ask whether we were still on clause 4 or speaking generally.


John Whitney Pickersgill: Mr. Chairman, if you would let me move the proposed amendment we could dispose of clause 4 and get on to another clause.


John (Jack) McIntosh: Before the amendment is moved dealing with the definition of certain terms within the bill I should like to say a few words about certain terms in other sections of the act which I hope to have included in the amendment.


John Whitney Pickersgill: This amendment relates only to paragraph 4, and I was wondering whether we would make more progress if we focused our attention on one clause at a time.


The Chairman:: My understanding of this amendment is that it relates to the definition of the word "municipality" and has nothing to do with other clauses.


John Whitney Pickersgill: Mr. Chairman, I am afraid I spoke a little hastily. The Minister of Finance has reminded me that the amendment, with which I am not very familiar, not yet having read it, will be to insert a new paragraph 1 which will provide a definition of "municipality". This might abbreviate some of the other discussion, and if the committee would like me to move it now I shall be very glad to do so. I will read it slowly so that everyone will be able to absorb it, including the mover. I move:
That Bill C-90, an act to amend the Excise Tax Act, be amended by renumbering clauses 1 to 9 thereof as clauses 2 to 10 respectively and by adding thereto as clause 1 thereof the following:

1. Subsection (1) of section 2 of the Excise Tax Act is amended by adding thereto, immediately after paragraph (b) thereof, the following paragraph :
"Municipality".
"(ba) "municipality" means (i) an incorporated city, metropolitan authority, town, village, township, district or rural municipality or other incorporated municipal body however designated, or
(ii) such other incorporated local authority as the governor in council may determine to be a municipality for the purposes of this act;"


Gilles Grégoire: In connection with that amendment, may I ask how it is that the federal government can define what is a municipality? I think it is the responsibility of the provincial authorities to determine what is a municipality. Here a decision is, apparently, to be made by order in council, and there is no reference to provincial jurisdiction.


Walter Lockhart Gordon: I think the hon. member could not have been here when I was explaining this.


Gilles Grégoire: I was.


Walter Lockhart Gordon: Then he will remember that I said the difficulty about relying entirely on the provinces in this matter is that they have defined municipalities in different ways in different acts; it is a question of which provincial definitions could be used. Apart from this there is considerable difference between the definitions used by some provinces and those used by others. The definition proposed here includes all incorporated bodies which could conceivably be called municipalities now, but it does leave some leeway in case some situation develops where there is in fairness an obvious need for exemption to put some new body on the same terms as existing ones.
As I said earlier, if members of the committee are prepared to accept this proposal we would be glad to see it go through; but if hon. members do not like it, this part would have to be dropped.


Gilles Grégoire: Can the minister assure that under this definition no municipalities considered as such by any province in Canada will be left out?


Walter Lockhart Gordon: I certainly can give that assurance.


John (Jack) McIntosh: The minister is attempting in this amendment to clarify the definition of certain words. I think they are not the only phrases to need clarification. When this bill is passed by this house in its final form it becomes law under the title, "An act to amend the Excise Act". It is obvious, if we recall the debates and the remarks made by the minister, that there are parts of the bill we do not understand, in particular the 28902-5-178
Excise Tax Act
definitions of certain words or terms. If this measure is passed without amendment or explanation the confusion which will exist when the public and the officials of the department begin dealing with these terms can readily be imagined. How can we, as members of parliament, expect the public and the officials to understand the act if we do not understand it ourselves?
The minister could prevent much of this confusion if he would insert a short clause to the effect that in the absence of definition in the Excise Tax Act, the definition of any term will be that found in an accepted dictionary. If such a proposal as this is not included we might as well scrap the entire wording of this bill and insert just two lines to read "The act is amended as interpreted by the official dealing with the subject matter contained in the act". I make this comment because, in reality, this is what we are doing; we are passing the buck.


Walter Lockhart Gordon: Perhaps the hon. member-


John (Jack) McIntosh: I am not yet finished. I would say that by our actions we are making a bureaucratic dictatorship out of our civil servants. The fault does not lie with the civil servants, but with the past and present members of this house. Too often in the past, as is evidenced by the contents of other acts, we have transferred our responsibilities as representatives of the people of Canada over to the bureaucrats. One of the results of our irresponsible actions is that the public takes its problems or cases to the tariff board or to the courts of the land, a costly procedure to the federal treasury as well as to individuals trapped by careless legislation. I am informed that under certain sections of this act, sections which parliament has passed, the public is not given the right to appeal to the courts but must, by law, accept the decisions of the officials.
I am sure many of the officials themselves do not relish the task of having to make decisions relating to so many of these undefined terms in the act. They feel, and rightly so, that this is the responsibility of parliament. This was referred to in a letter I received from an Ontario citizen which reads in part:
Naturally, I felt that at least our government should be as fair as companies doing business. I went to Ottawa and had an interview with Mr	 but he put all the blame on the members
who had approved the paragraph in the tax bill.
And rightly so. There are a number of terms contained in clause 6 which, if not defined, will lead to a great deal of misunderstanding between the public and the officials of the department. Some of these misunderstandings, I have no doubt, will result in costly court cases. I refer to such

Excise Tax Act
words as "wagon" and "manufacturers". I know one citizen from my constituency who spent an amount in excess of $500 endeavouring unsuccessfully to get a ruling from the department on the meaning of the term "wagon". Because the department will neither accept any legal interpretation nor provide a definition which they will accept, all farmers purchasing steel grain truck boxes must pay an additional $300 to $400 on such a purchase.
On page 694, volume 1, 1952, Revised Statutes of Canada, under the Canadian Grain Act, "wagon" is defined as any vehicle used to deliver grain to the country elevators. The Department of National Revenue will not accept the definition of the word "wagon" contained in the Excise Tax Act, nor any dictionary definition.
Members of the minister's own profession are greatly concerned about the misunderstandings caused by the lack of definition of terms used in this act. I refer the hon. gentleman to an article which appeared in the publication entitled "The Canadian Chartered Accountant", volume 2, No. 5, dated May, 1953. The heading is "Sales Tax-Who is a Manufacturer?" I should like to read part of this article. It says:
The most important taxing provision in the Excise Tax Act, section 30(1) (a), imposes a consumption or sales tax on the sale price of all goods ''produced or manufactured in Canada". Since this tax is payable by the "producer or manufacturer", it frequently becomes important to know whether a particular person is a manufacturer for sales tax purposes or whether he is merely a distributor, jobber, retailer or consumer, none of whom are liable to pay sales tax under section 30(1) (a).
In this article, the term "manufacturer" should be understood to refer to a "producer or manufacturer" for the purposes of the Excise Tax Act.
The statutory provisions, regulations and rulings dealing with this question are unusually complex. Although the Excise Tax Act contains no general definitions of the expressions "produced or manufactured" or "producer or manufacturer", there are a number of provisions in the act and in the regulations and rulings made under its authority stating that such diverse activities as packaging candies, setting diamonds in rings, repairing fur garments and printing stationery are to be treated as manufacturing operations for sales tax purposes, but that making popcorn, cider or false teeth or developing and printing photographs are not to be so treated. In addition, there are a considerable number of decided cases in which the courts have been asked to rule on such activities-
I could go on and inform the minister of what his colleagues have said about this act but I think I should say the sales tax should be imposed upon persons who manufacture foods and not upon one who merely provides a service. The difference between a contract for the sale of goods and a contract for services or for labour and materials is well known in common law but apparently

not by the Department of National Revenue. Once you are designated by the department as a manufacturer, whether you are or not you are compelled to take out a manufacturer's licence. You are then subject to further rules and regulations compiled by the officials of the department. I refer now to such regulations as regulation 2 contained in circular ET.l, which is all-powerful' and generally not known to the public but only to the retailer, jobber or distributor who is compelled to enforce the provisions of the regulations.
Under these regulations, with special formula compiled by the officials, the retailer is forced to impose an additional hidden tax on the consumer, an additional 4 per cent sales tax calculated on the cost of the article plus the added amount of 11 per cent sales tax already included in the cost price. Possibly the reluctance to define these terms is for a purpose. Because they are not defined the department has made use of this method to collect many thousands of dollars for the federal treasury. Although I agree the treasury needs the money, this is no manner in which to collect needed revenue. I would urge the minister to specify in the bill as I have suggested a source of interpretation acceptable to his department as well as to the Department of National Revenue.
I have some things I want to say on clause 6 when it comes up in regard to some of the terms that are used there, but at this time I would ask the minister if he would accept the suggestion I have put forward.


Walter Lockhart Gordon: Mr. Chairman, I am not a member of the legal profession, and I think that is something I may share in common with the hon. member for Swift Current-Maple Creek. I am informed by members of the legal profession that the suggestion made by the hon. member, to which I must say I listened with great interest, would not be entirely satisfactory. I am sure we would not be able to recommend an amendment here that had not been approved by the Department of Justice. That is the difficulty.
I think that some of the points the hon. member made are very pertinent and understandable, but I am afraid that if we embarked upon a complete revision of the Excise Tax Act at this particular stage we would find that a great deal of preparatory work was needed before this committee could usefully deal with that kind of task.


John (Jack) McIntosh: I am very surprised the minister says that the legal department does not consider this possible because the very article from which I quoted states that when

these cases are taken to the courts the judges look first to the ordinary dictionary definitions to make their rulings. If the federal treasury is going to be put to the additional cost of taking cases to court and the public also are going to be put to the cost of taking cases to court only to have judges resort to dictionaries to define the meaning of certain words, why can we not put it in the act in the first place?


Walter Lockhart Gordon: I am afraid I have not been here long enough. I do not know who passed the act in the first place, but in dealing with amendments to the act I do not think we should include a wide variety of definitions that might upset a series of legal precedents on this very point that the hon. member has raised.


John (Jack) McIntosh: I will not argue about the rest of the act, but will the minister do it for the part contained in this bill?


Walter Lockhart Gordon: I am afraid that if we tried to include definitions in the bill that applied only to certain sections or subsections of the act we would be in a great deal of difficulty.


John (Jack) McIntosh: Would the minister not agree with me that if these terms cannot be defined there is no use putting them in the bill? We do not know what they mean.


Walter Lockhart Gordon: I think all I can say is that many of these words have been interpreted in the courts over a long period, but I am not a lawyer and I cannot answer the question more specifically than that.


Horace Andrew (Bud) Olson: 
Walter Lockhart Gordon: So that there will be no misunderstanding at all, the hon. member will see that the second section applies to "such other incorporated local authority". It does not include a wide area that has no status as such under provincial law. The reason for that, as I have said before, is that if the provinces concerned do not look upon the area as some official kind of area which they are prepared to incorporate it will not qualify under this provision.


Michael Starr: I wish to say a few words on that point. I think the whole matter could be clarified if certain words were deleted from subsection 2 of this amendment. An incorporated municipality is one that has been given permission by a municipal board to incorporate itself. But an unorganized territory is one that is under the direct supervision of a municipal board where a trusteeship is set up to look after the area. An example of that is Elliot Lake and other areas of that kind. They are directly responsible to the municipal board. They are not responsible to the electors of the district at all. If the words "incorporated local" were deleted the section would then read:
(ii) such other authority as the governor in council may determine to be a municipality for the purposes of this act.
In most cases the province acts on behalf of these areas. The province calls for tenders for any construction work that is to be done or any improvements that are to be made.


Walter Lockhart Gordon: May I answer both hon. members. If the province is acting for these areas, then I think they are exempt because provinces are exempt. Certainly, therefore, the type of area to which the hon. member for Ontario referred, which I think he said would be administered by the province, would be exempt because the province would be doing the buying. I think probably the same answer applies in your case, too.


Mr. Fleming (Okanagan-Revelsloke):: This is a question of the minister relating back to the explanation he has just given. I hope the exemption is not limited to the province doing the buying on behalf of some of these communities because in British Columbia there are communities, not organized territories, not incorporated communities, but unorganized territories in which the taxes are collected by the province and such administration as there is is the responsibility of the provincial department of municipal affairs. However, there might be in a number of the communities, a fire district, for instance, the creation of a committee to provide fire protection or the creation of a committee to provide a water system, sewerage system and

Excise Tax Act
so on. Under the winter works program, a number of these communities in British Columbia were able to participate on the recommendation of the department of municipal affairs. I assume the same condition would apply under this definition?


Walter Lockhart Gordon: As hon. members of the committee will appreciate, after this subject came up on Thursday the officials of the department, the Minister of National Revenue and myself went into it rather thoroughly. We discussed it also with the Department of Justice. It is our understanding that this definition includes everything that is incorporated as a municipality by the provinces or is administered in any way by the provinces. Perhaps I should say it does not include areas that are administered by the provinces, because it does not need to, in view of the fact anything the province administers is exempt anyway.
I can only say that to the best of my understanding all the cases that have been raised are exempt, if we are talking about areas or communities and not individuals. The provision is not intended to apply to the


Stuart A. Fleming: There is one other point I should like to raise, and I do not want to prolong the discussion. My point arises out of the remarks of the hon. member for Swift Current-Maple Creek in which he drew attention to the problem of interpreting words in the act. I wonder if the minister would give consideration to the possibility, later this year or at the first available opportunity when parliament is in session, of referring the Excise Tax Act and similar legislation to a committee of this house in order to secure advice on the interpretation of words in the act and perhaps provide recommendations that would, in turn, provide clarification?


Walter Lockhart Gordon: I would be glad to consider that, Mr. Chairman, and discuss it with my colleagues. I point out, however, there is a royal commission on taxation sitting and I presume it will be going into this particular form of taxation, as well as all other forms. I am sure the commission will be receiving many representations along the lines of those made by the hon. member who has just spoken, and the hon. member for Swift Current-Maple Creek. I shall be glad to send the commission copies of Hansard so that they will have the benefit of the suggestions that have been put forward.


Thomas Speakman Barnett: I should like to say that, as I read the proposed amendment, it meets the situation I was trying to bring to the attention of the minister last Thursday. I think it

covers water improvement districts, fire improvement districts and so on in British Columbia which I believe are actually incorporated under our British Columbia water act. So far as I am concerned, I am quite happy with the amendment proposed to the committee, and I would be quite happy to see it pass.
However, I should like to suggest that if we pass it at this time, for the purpose of continuing our discussion in the committee perhaps we might deem that part of the amendment that renumbers the section as being not effective until the committee reports to the house, so that we will not develop hopeless confusion as to which clause of the bill we are discussing.


Lucien Lamoureux: Is it agreed?


Some hon. Members:: Agreed.


Lucien Lamoureux: Shall the amendment
carry?


Some hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Lucien Lamoureux: The hon. member for Renfrew South.


John Whitney Pickersgill: I wonder if, before the hon. member for Renfrew South speaks, I could move another amendment? I move:
That Bill C-90, an act to amend the Excise Tax Act, be amended by striking out the word "or" at the end of line 32 on page 1 and adding the word "or" at the end of line 2 on page 2 thereof, and by striking out lines 3 to 7 inclusive on page 2 thereof and inserting the following:
(d) manufactures or produces from steel that has been purchased by or manufactured or produced by that person, and in respect of which any tax under this part has become payable, fabricated structural steel for buildings,
he shall, for the purposes of this part, be deemed not to be in relation to any such building, structure, building sections, building blocks or fabricated steel so manufactured or produced by him, the manufacturer or producer thereof.


Lucien Lamoureux: I understand that this is an amendment to clause 2. Shall the amendment carry?


Edward Nasserden: I wonder if the minister would just explain what that means?


Walter Lockhart Gordon: I explained it a few minutes ago at some considerable length.


Lucien Lamoureux: Shall the amendment carry?


Mr. Greene:: Are we still on the first amendment to the definition?


Lucien Lamoureux: No, we are not; we are on the amendment which has been moved by the Secretary of State.


John James Greene: I was going to speak to the first amendment. I understood the Secretary of State asked leave to bring in this amendment before I spoke.


John Whitney Pickersgill: I did not rise until after the amendment had been carried.


Lucien Lamoureux: We are now returning to clause 4.


Edward Nasserden: I am sorry, but I was out
for a minute or two and missed that part. I wonder if the minister will repeat it?


Walter Lockhart Gordon: Since the amendment has been passed and I think all other hon. members of the committee heard it, I wonder if I might send my notes to the hon. member, if that would satisfy him?
(Translation):


Louis-Joseph Pigeon: Mr. Chairman, we are still considering clause 4. I have only one point to raise, on which I should like to have the comments of the minister.
When the tax was announced by the minister in his budget speech, the premier of Quebec made a violent attack against that tax which, at that time, was 11 per cent and is now reduced to 4 per cent, although it is always there.
The premier of Quebec said, among other things, that it was a serious blow to the autonomy of the province of Quebec. If the premier of Quebec made a justified statement, then it would be logical that the minister comply with the requests of the provinces, for instance, and give complete exemption on all building materials that will be purchased by municipalities and provinces, and even the provincial crown corporations. And if Mr. Lesage's policy is justified, as I said, the minister has just to retreat. But if Mr. Lesage's statement is unjustified, then I am of the opinion that the minister is attacked personally. If such is the case, I should like him to answer the violent attack of Mr. Lesage, in order to clear himself.
(Text):


Walter Lockhart Gordon: I do not know of any attack. I had the great pleasure of spending two days with Premier Lesage over the last week end. I found him in his usual affable frame of mind, and we seemed to get along very well. We agreed to meet at frequent intervals, and I suspect that perhaps he is unaware of the fact that the hon. member for Joliette-L'Assomption-Montcalm-


Louis-Joseph Pigeon: I have only a question to address to the minister.
(Translation):
Has Premier Lesage of the province of Quebec, or the premier of another province, asked the Minister of Finance to abolish that tax on all materials that will be bought by the provinces or by the crown corporations of those provinces?
Excise Tax Act
(Text):


Walter Lockhart Gordon: Well, they have not asked me, Mr. Chairman. Perhaps I should explain that the provinces themselves are not taxed.
(Translation) :


Louis-Joseph Pigeon: For all materials, including the crown corporations for those provinces?
(Text):


Walter Lockhart Gordon: The crown corporations are taxed.


Lucien Lamoureux: Has the hon. member unanimous consent to revert to the amendment on clause 4 for a question he proposes to put to the minister?


Some hon. Members:: Agreed.
(Translation):


Mr. Frenette:: Mr. Chairman, I am sorry, but I lack experience in these committee discussions. A while ago, I failed to ask a question; I wanted to direct a question to the Minister of Finance when he introduced the amendment to section 2, pertaining to concrete blocks for construction purposes.
If the committee would allow me to do so, Mr. Chairman, I should ask my question now.


Some hon. Members:: Agreed.


Louis-Joseph Pigeon: Has the hon. member for Port-neuf (Mr. Frenette) only one question to ask?


Jean-Louis Frenette: Yes. I wish to thank the members of the committee as well as yourself, Mr. Chairman.
My question deals with concrete blocks used as building material. I would like to ask the Minister of Finance whether in referring to concrete blocks he had in mind also what is called in the industry "artificial stone".
(Text):


Walter Lockhart Gordon: No, Mr. Chairman.


[Stage Direction]
Clause agreed to.
On clause 5-Payment to educational institution of amount equal to tax.
Walter Lockhart Gordon: My colleague, the Minister of National Revenue, has an amendment to clause 5, dealing with public libraries, to which I referred earlier.


Mr. Garland:: I move:
That Bill C-90, an act to amend the Excise Tax Act, be further amended by striking out lines 39 to 43 on page 2 thereof and lines 1 to 5 on page 3 thereof and substituting therefor the following:
47A. Where materials have been purchased by or on behalf of
(a) a school, university or other similar educational institution for use exclusively in the construction of a building for that institution, or

Excise Tax Act
(b) any organization for use exclusively in the construction of a building for that organization that is to be used exclusively or mainly as a public library operated by or on behalf of that organization on a non-commercial basis, and the tax imposed by Part VI has been paid in respect of those materials, the minister, may, upon application of such institution or organization in such form as the minister prescribes made to the minister within two years from the time the materials were purchased, pay to such institution or organization an amount equal to that tax.


Oscar William Weichel: On July 8, regarding the schools and universities, the minister indicated that construction materials for such projects could be exempted, as in the case of hospitals which have a 100 per cent exemption. However I feel that the tax means that schools and universities will be paying 11 per cent on such major items as electric fixtures, freight and capacity elevators and air shafts, hot water heaters, floors, air conditioners, pipes, valves and fittings, sprinkler systems, cupboard doors, hinges, nails and other fasteners. This also applies now to libraries. Is that correct?


Walter Lockhart Gordon: 
Oscar William Weichel: That is right.


Walter Lockhart Gordon: But the facts are as represented.


Michael Starr: So, in effect the impression given by the minister that schools and universities would be exempted in the same way as hospitals is not true, because whereas hospitals have a 100 per cent exemption, these have not. I think there is confusion created in the minds of people with regard to this particular aspect.


Mr. More:: I have had several representations from steel fabricating people in regard to reinforced structural flooring, roof decks, wall panels and so on. Would this amendment exempt any of those materials used in these buildings?


Walter Lockhart Gordon: Yes it would.


Gilles Grégoire: I would like to suggest that the minister change a few words in this clause and amendment. For instance, the terminology used states:
The minister may, upon application of such institution or organization in such form as the minister prescribes-
By using the word "may", the minister is not obliged to do this, and I ask why not use the word "must".
Further on it says:
-pay to such institution or organization an amount equal to that tax.

Why not use the same expression as used in clause 4, "refund", instead of "an amount equal to that tax"? As it stands now, especially in the French translation, it means that the minister may, if he wishes, give a grant or an exemption to such institutions. I am asking the minister to consider changing those words to mean that in fact an institution will be entitled to a refund of tax which it would have paid on building construction.


Walter Lockhart Gordon: I have not the advantage of the hon. member for Lapointe because, as he knows, I am not a member of the legal profession; but these particular words to which he has referred are used in other places in the bill, and I think they are inserted in the amendment for that purpose. My hon. friend, the Minister of Forestry, has the advantage of being able to discuss these matters on the same ground as the hon. member for Lapointe.


Gilles Grégoire: These words may be used in some other places, but when the question of schools and universities is involved I think the words should be changed. For example we have the words "the minister may" in the English version and in the French version we have tne words "ie minisire peul". This means that he is not obliged to do it; he may do it if he wishes. It then becomes some kind of a grant to universities and schools, and that is exactly what we will not accept.
I would like the minister, of his own volition, to change the words in this clause and propose an amendment in order to achieve this. Would the minister agree to do that?


John Richard Garland: Mr. Chairman, perhaps as another non-lawyer I might be permitted to say that it is not automatic that this tax shall be refunded; the minister must satisfy himself that there is entitlement.


Horace Andrew (Bud) Olson: Mr. Chairman, in the Interpretation Act the word "may" is defined as "shall", is it not?


Gilles Grégoire: If it means "must" in the English version and the French version, I am satisfied.
(Translation):
The verb "peut" means is free to, is not obliged to. So, from the constitutional point of view, it might be preferable in this instance to substitute to the word "peut" in the French text, the words "il doit" as, otherwise, it implies that he is not obliged to do it. (Text) :
Therefore 1 would ask the minister whether he would agree to change that word. Also, with regard to the other words "pay to such institution or organization an amount equal to that tax", I do not know whether the

minister would agree to change that to "refund that tax", the amount paid as tax.


Louis-Joseph Pigeon: Mr. Chairman, we have in this house a good lawyer in the Minister of Public Works and we would appreciate very much having his point of view on this question.


John Robert (Jack) Nicholson: Mr. Chairman, if I may attempt to deal with the difficulties confronting the hon. member for Lapointe, I would point out that it says in the last few words "the minister, may upon application by such institution or organization in such form as the minister prescribes". There are certain conditions that have to be complied with. That is why the word "may" rather than "must" is generally used in our statutes.


Gilles Grégoire: Mr. Chairman, that does not answer the question I asked. This clause should read "the minister must, upon application by such institution or organization in such form as the minister prescribes". If the word "may" is changed to "must" the minister is obliged to do this; if the word "may" is used, he is not obliged to do it. That is exactly what I mean. I would like to know whether the minister is ready to change that word.


Walter Lockhart Gordon: Mr. Chairman, I understand this has always worked satisfactorily in the past. I am hesitant to change the drafting at this stage, being a layman, because it would apply not only to this clause but I would be afraid it might apply to other sections or that it would not follow the wording used in other sections. Therefore I would prefer to leave it the way it is at present.


Gilles Grégoire: This is an important matter because it concerns the question of education and our schools and universities. This wording gives discretion to the minister and is an interference in a matter that falls under provincial jurisdiction. I ask that the minister change the word "may" to the word "must", and also the words "pay to such institution or organization an amount equal to that tax" should be changed to "pay to such institution or organization a refund of that tax". If the minister would agree to move this amendment himself, I would not have to move it.


David Vaughan Pugh: Mr. Chairman, could this matter not be decided by the Interpretation Act? "May" is permissive; "must" is mandatory. It then becomes a question of whether the minister intends that it shall be permissive or mandatory.


Louis-Joseph Pigeon: Mr. Chairman, I would like to ask the advice of the Minister of Fisheries on this question.
Excise Tax Act


Hédard-J. Robichaud: Mr. Chairman, I think the advice has been given by the hon. member.


Walter Lockhart Gordon: I think there is another point that should be made here, Mr. Chairman, that this permits the minister with the approval of the people concerned, to make a payment to the institutions which is the equivalent of the tax that may have been incorporated in the materials they purchased. It does not mean a refund of the tax, because they are not the taxpayer. The manufacturer pays the tax. The contractor pays a price to the manufacturer and that price includes the tax; but-


Michael Starr: Are you sure, now?


Walter Lockhart Gordon: -this gives the minister
power to make a payment to the institution in lieu of the tax.


Gilles Grégoire: Mr. Chairman, I would like to point out to the minister that there are two words that should be changed; first, the word "may" should be changed to "must". I would like to know whether the minister wants to keep a discretion with regard to these refunds or whether there is to be an obligation upon him, as would be the case if the words were changed to read "the minister must, upon application by such institution or organization in such form as the minister prescribes". Does the minister intend to keep a kind of discretion on that point, or should there not be an obligation upon him to do this? If there is to be no discretion, why use the word "may"; why not use the word "must"?


Walter Lockhart Gordon: If the conditions are met, Mr. Chairman, I am informed by my legal advisers that the payment must be made.


Gilles Grégoire: Then would the minister agree to include the word "must" instead of the word "may"?


Mr. Thomas:: Mr. Chairman, I would like to commend the minister for including the words "public library" in this clause of the bill. Certainly our public libraries are part of our educational system and should be included in the provision providing a refund of this tax.


Lucien Lamoureux: The hon. member for Port Arthur.


Gilles Grégoire: On a point of order, Mr. Chairman, I asked a question of the minister and I think he was ready to answer it. I would like this point to be finished before we go on to another point.


Walter Lockhart Gordon: Mr. Chairman, I am informed by the lawyers surrounding me that I cannot accept, much as I would like to, the hon.

Excise Tax Act
member's proposal because it would prevent the minister making a payment to the institution in this case; and if he is not allowed to do that he will not be able to administer this particular clause.


Gilles Grégoire: I fail to see how including the word "must" instead of the word "may" would prevent the minister making payment to these institutions if they made application. I think the lawyers surrounding the Minister of Finance should reconsider their position on this point.


Walter Lockhart Gordon: Again, Mr. Chairman, my counsel in this case says that the word "must" is never used in the statutes, in this sense.


Gilles Grégoire: This point is important, Mr. Chairman, because it is concerned with the question of education and we do not want to leave any discretion in the minister on this matter. The word in French means what it means-"may", "peut". As the clause is now written the minister has a discretion in this matter. If the minister will not move an amendment of his own accord, I will move
that the word "may" be changed to the word "must" or, in French "peut" par le mot "doit".
I move it as an amendment, Mr. Chairman.


Walter Lockhart Gordon: Mr. Chairman, I can assure the hon. member that there is no thought or suggestion of the Minister of National Revenue or any other member of the government using this discretion to interfere with education in any province.


Gilles Grégoire: I have lots of confidence in the Minister of Finance but I do not know who will come after him or how long he will remain Minister of Finance. Therefore I should like to protect the position in the future with regard to discretion over according grants to universities. That is why I move that we change the word peut par le mot doit.


Kenneth Hamill (Ken) More: Just while the amendment is being considered I should like to say that I have had experience with representations, and my understanding is that goods used in these buildings must pay tax. Then application is made to the minister for an amount equal to the tax paid. What I have in mind is this. I know of a case where a very large water softener was installed in a hospital. The manufacturer of the water softener got the order from the contractor and it was stamped "Hospital, tax exempt". He shipped the water softener to the contractor who installed it in the hospital, and then the department came along and he had to pay the tax. He asked the contractor to apply for a refund and he said: "No, I won't; I didn't pay

you the tax. I finished my job; to heck with you". He asked the hospital to apply and they said: "No, we don't pay tax; you do what you like about it". If the tax has to be paid this is not generally understood, particularly by small manufacturers. They get stuck and it is quite a job to get an understanding from the department about their position, although there is no question in this case about the making of the equipment, about its being installed in the hospital and about no tax being received. I know of this specific case where this man had to pay the tax when the inspection was made, and neither the contractor nor the hospital would make an application to the department. They said they had no right to make one. This concerned a large amount and was a pretty onerous penalty.


Mr. Lloyd:: Mr. Chairman, I do not think we should change the wording of this bill without examining the entire legislation on the subject. Other provisions may be found where a conflict might arise, and which the minister would have to resolve, involving a somewhat similar case to that described by the hon. member. I think these present words have been traditionally used so as to avoid a conflict of law or possibly a dual claim for a refund of tax.


Robert Norman Thompson: Mr. Chairman, if we are not ready to proceed with the amendment I should like to go back to the question raised-


Lucien Lamoureux: Order. If I may suggest this to the hon. member and the committee, I think for the proper order of business we should try to dispose first of the amendment to the amendment which we now have before us which has been proposed by the hon. member for Lapointe. If I may be allowed to do so, I will read the amendment as it has been proposed to the committee.
(Translation):
In clause 5, change the word "peut" for the word "doit".
(Text):
Amendment to the amendment (Mr. Gregoire) negatived: Yeas, 6; nays, 75.


Lucien Lamoureux: I declare the amendment to the amendment lost. The question is now on the amendment.


Mr. Fisher:: I should like briefly to say that I was rather brutal to the Minister of Finance about his failure to include public libraries. Now that he has undertaken to do so I wish to withdraw my unkind remarks and express the appreciation of the libraries and of someone representing a city which hopes to construct a public library very soon, as well as the Canadian library association. I should also like to let him know that he has somewhat reaffirmed my faith in his executive assistant.


Horace Andrew (Bud) Olson: Mr. Chairman, I should just like to say that over the last few weeks I have made representations to the minister by letter, over the telephone, in committee, and in every other way I know of to communicate with him. Now that the amendment has been moved he has met all my representations, and on behalf of the people for whom I made them I wish to thank him.


Walter Lockhart Gordon: May I say I appreciate these words which have been uttered by the two hon. members who have spoken, both on my own behalf and on behalf of my executive assistant.


An hon. Member:: Does one have to be brutal to the minister?


Kenneth Hamill (Ken) More: Has the minister an answer to the question I posed to him?


Walter Lockhart Gordon: I think the question posed to me had to do with the situation where somebody sold a water softener to a hospital and failed to get a refund of tax. The only thought which occurs to me as to why he did not get it was that perhaps the certificate made out by the hospital was not in proper form. Apart from that I do not know why he did not get the refund.


Kenneth Hamill (Ken) More: I do not think the minister has understood me correctly. It is not a question of the hospital not getting a refund. The purchase order came to this person and stamped on it was "No tax, for use in hospital", or something like that. I saw the purchase order. This man filled it on that basis, having checked that hospitals were exempt from tax. He shipped it to the contractor who installed it in the hospital. Then the inspector of the department came along and told him that he had not collected the tax on it. He replied that it was for a hospital. He was told that as he had shipped it to the contractor he must pay the tax. The contractor said that the job had been done, and the hospital said that they had the softener.


Walter Lockhart Gordon: If the hon. member would give me the particulars, the name and date, I will be glad to take it up with the Department of National Revenue and find out what happened.


Kenneth Hamill (Ken) More: I have tried to tell the minister what happened. I will go further and say that this man did get his refund. There was a great deal of trouble. He did not get it on his own. I am not taking any credit; I happened to be involved. What I want on the record is an answer to a straight question. As I recall it, in these circumstances he has to charge the tax and the institution has to make
Excise Tax Act
an application. He cannot supply these goods without the tax being collected. Is that correct?


Walter Lockhart Gordon: That is correct in the case of schools.


Robert Norman Thompson: I should like to have the minister clarify a question which arises in my mind. It relates directly to the amendment before us and the matter which was raised originally by the hon. member for Waterloo North. Did the hon. minister's explanation mean that only the material actually used in the construction of schools and universities would be exempt from tax? Does this exclude all those other materials which are used in construction? It is not clear.


Walter Lockhart Gordon: It includes all the things which were listed under the heading of building material prior to the presentation of this bill. It certainly would not include refrigerators.


Robert Norman Thompson: Would it include refrigeration?


Walter Lockhart Gordon: No, it would not.


Robert Norman Thompson: Nor hardware?


Walter Lockhart Gordon: Just a moment. I am afraid I will have to check that.


Robert Norman Thompson: Electrical fixtures?


Walter Lockhart Gordon: No, it would not include electrical fixtures.


Robert Norman Thompson: Automatic fire sprinkler arrangements?


Walter Lockhart Gordon: No.


Robert Norman Thompson: Plumbing?


Walter Lockhart Gordon: Has the hon. member got a list of the things about which he wishes to inquire?


Robert Norman Thompson: Well, the minister referred to the same list as was mentioned by the hon. member for Waterloo North. These things definitely are used in the construction of a building.


Oscar William Weichel: Hardware was not mentioned on the list I gave the minister.


Michael Starr: What the Minister of Finance is now, in effect, admitting is that his statement, when he exempted schools and universities, and that they would be placed in the same category as hospitals, was not correct. I think this matter should be straightened out so that those who are engaged in the construction business may know definitely that they are not in a particularly select category as far as the application of sales tax is concerned. I might add, with regard to the congratulations which were extended

Excise Tax Act
by the hon. member for Middlesex West to the minister for exempting public libraries, that libraries are not exempted from the payment of federal tax on many of these things.


Walter Lockhart Gordon: We are talking about the tax on building materials to be used in schools, universities or public libraries. I am not talking about the tax which applies to some of the things which may be incorporated, though they may be necessary as part of the building. I am talking now about the things that are being exempted from tax.


John (Jack) McIntosh: I wish to raise a matter in connection with the question asked by the hon. member for Regina on the subject of rebates. From time to time in the course of revision of this act, certain items have been deleted. Nevertheless, a number of citizens have continued to pay tax, sometimes for as long as four years. Then they suddenly find that though the department has been accepting the tax they should not have been paying it. They make an application for rebate but the department can only pay rebate in respect of two years. Why cannot the entire sum "U-iif'h the piti-/on has overpaid been refunded?


Walter Lockhart Gordon: The reason is that there is a statutory limitation in the act which limits the refund to payments over two years.


John (Jack) McIntosh: I know that such a provision is in the statute. I want to know why it is in the statute.


Walter Lockhart Gordon: I am informed it corresponds with the refund sections in the Customs Tariff, but I think the hon. gentleman's question could apply to that just as well. I do not know.


John (Jack) McIntosh: If a citizen can prove he has overpaid the government and the government accepts his explanation, and they have taken his money without advising him that he need not pay it, why not refund that man's money?


Walter Lockhart Gordon: All I can say is there must be some practical limit on the time. As for a citizen not knowing about these things, I think that in the case of this particular withdrawal of exemption from sales tax most citizens have, by this time, heard something about it and I hope all of them will know exactly what is involved.


Kenneth Hamill (Ken) More: Some citizens have had the experience of receiving advice from darned good accountants and they still have not known about it.


Charles James McNeil Willoughby: I wonder whether I might at this point reintroduce a question I asked

earlier about public buildings which were not contracted for but in respect of which bylaws were passed.


Walter Lockhart Gordon: I think that comes under clause 9.


Gilles Grégoire: I should like to suggest another change in wording to the Minister of Finance and I think the minister might accept it because the wording used in clause 4 is exactly the same as I would like to see in clause 5. In clause 4, line 28, the word "refund" is mentioned. A refund may be granted by the minister. In clause 5 it says the minister may "pay to the institution an amount equal to that tax". Would the minister not agree to use in clause 5 the same words as appeared in clause 4 and say, "refund to the institution an amount equal to that tax"? Then the government would be repaying something, not paying it to the institution.


Walter Lockhart Gordon: The difficulty is that one cannot refund a tax to an institution if the institution has not paid the tax. That is why there is a difference in the wording.


Kenneth Hamill (Ken) More: 
Walter Lockhart Gordon: This clause deals with schools and universities, and there is a difference between them and the kind of storage to which the hon. member is referring.


Kenneth Hamill (Ken) More: Can the minister indicate what clause this might come under?


Walter Lockhart Gordon: I think we might discuss it on clause 6, the next clause, if we pass this one.


[Stage Direction]
Amendment agreed to.
Clause 5 as amended agreed to.
On clause 6.
John James Greene: I should like to say a few words with regard to clause 6, Mr. Chairman. From reading the supplementary budget speech I understand it was intended to remove the sales tax on materials consumed or expended in a manufacturing process and I believe subclauses 5 and 6 of clause 6 carry out that intent.
I understand that previously machinery and apparatus to be used in manufacture or production were in the same category as there was no object in distinguishing the

two. As a result past decisions by departmental officials have determined that certain things are machinery and not materials used or consumed in production, even though those materials may be consumed within the period of a year. I think there have already been decisions on such items as papermakers' felts. How papermakers' felts could be machines I do not know. In any event, this had to be determined. I am wondering why there could not be a simple definition. Any past definitions are obviously an anachronism because of the new concept that production machinery must be made deductible in order that our manufacturers may be competitive and in particular that they may be able to compete in world markets, which is so necessary.
We certainly do not want to impose a tax on production materials that are consumed by calling those materials machinery and forcing the manufacturer to depreciate them over whatever period of time depreciation may be allowed. I wonder whether we could not implement the distinction already in the Income Tax Act with regard to materials that must be depreciated and which can be called an expense in one year under that act. In other words, if a material is consumed or expended in the taxation year, and normally in one year, then it is a production material consumed in production. If, on the other hand, the item lasts more than one year in the normal course then it is machinery and must be depreciated.
This is the case under the Income Tax Act and I suggest with respect that it would obviate a great deal of difficulty in fighting over every little item to determine what is machinery or materials consumed in the period of one year. I think we would save our industrialists a great deal of concern and possibly a great deal of expense. In my view the departmental officials would have something much simpler to work with if we merely used the same definition as is found in the Income Tax Act. If it is normally consumed in one year it is a production material and is deductible; if, on the other hand, it lasts more than one year it is machinery. I would ask the minister to take that point into consideration and, if it is valid, come up with a definition along those lines, because I think it would simplify the matter a great deal.


Mr. Alkenbrack:: Mr. Chairman, I wish to thank the hon. member for Renfrew South because I have a point to bring up with regard to production machinery which is along similar lines. I notice that in clause 6 there is a long list of food products both for man and beast, and a long list of machinery pertaining to the production of foods for man and beast. I also notice that around
Excise Tax Act
line 30 on page 3 there is provision for the exemption of farm produce sold by the individual farmer of his own production. The result is that one of our basic industries is well protected by way of exemption. In line 21 on page 4 there is a reference to sap spouts and sap buckets. My grandfather used to call sap spouts spiles, but that is an almost forgotten word. However, the department correctly lists them descriptively as sap spouts, and refers to other things that are used in connection with our basic maple sugar and syrup industry.
We have another industry that is probably not so productive in dollar value as the maple syrup industry but yet is a very basic industry and one which is vital to some of our agricultural people. In addition, it is found in many parts of Canada such as British Columbia, Ontario and Nova Scotia. I refer to cider production. I notice there is no consideration given here to the cider producers, the farmer or orchardist who produces cider from salvaged windfall apples for his own use and for local sale. I am sure if the minister had ever had a drink of freshly pressed cold sweet cider produced by the farmers of Prince Edward county. Ontario, not Prince Edward Island, he would readily grant a little protection to these people who have to buy the necessary cider presses and tanks in order to make the product.
I simply bring forward this point for the minister's consideration. I should like to see clause 6 amended on page 4 somewhere near the maple syrup item, because the point I am trying to make is that there is an affinity between maple syrup and cider manufacturing. In both cases the producers are usually farmers who are producing a primary product, and I submit that the cider producer deserves as much consideration as the maple syrup producer who has been protected from sales tax for a good many years. I have had two appeals on the part of farmers and orchardists during the past eight months who have strongly protested the fact that they have to pay 11 per cent sales tax on cider press machinery. My amendment to clause 6 would be as follows:
Apple pulp grinders, tanks and presses and complete parts thereof, when used exclusively by farmers and orchardists on their own premises, for the production of apple cider for non-alcoholic use.


John (Jack) McIntosh: Mr. Chairman, I think the minister will realize that some of us are not too happy with his excuse that he is not a lawyer when we ask for the interpretation of certain terms. Now that he has his battery of lawyers and consultants in front of him, who I imagine drew up the bill, he should be able to get a legal interpretation of some

Excise Tax Act
of these terms. On page 3, line 24, the phrase "boxes for farm wagons" is used. Would the minister take the definition in the Canada Grain Act for the definition of a wagon? In that act a wagon is defined as meaning "any vehicle used to deliver grain to a country elevator". I should also like to draw the minister's attention to page 4, line 7, where the words "logs and round unmanufactured timber" appear. I wonder whether fence posts, which are small logs sharpened to a point on one end with an axe, are manufactured or not manufactured?
I should like also to draw the minister's attention to line 25, page 4, where a reference is made to forage wagons for off-highway use. I wonder how the department is going to determine whether or not this equipment is for off-highway use. Is there going to be an end user's certificate required, or what procedure will be followed by a person requesting this exemption?
I should like to draw the minister's attention to an item on page 5, line 8, where there is a reference to soft drinks. Line 7 refers to bases or concentrates for making soft drinks, and these are not included. Perhaps The minister has not had any representations from the soft drink manufacturers, but his predecessor had, and it was contended this was a discriminatory tax because they are directly competing with the retailers of tea and coffee. These people asked why their beverages should be taxed while tea and coffee were not taxed. I hope the minister will have an answer in connection with that item.
Then, on page 6, line 20, there is a reference to the term "manufacture" and I hope the minister, with his battery of legal experts there, can provide me with a definition of "manufacture". On page 9 there is a paragraph reading:
The minister shall be the sole judge-
Personally, I do not like this particular phrase because, in my opinion, that does not give the minister the power to be the sole judge but gives one of his officials the power to be the sole judge, thereby contributing to what I call bureaucratic dictatorship. I hope the minister will eliminate that phrase altogether.


Lucien Lamoureux: The hon. member for Saint John-Albert.


Mr. Bell:: I wonder if the minister wants to reply now?


Walter Lockhart Gordon: I would not be anxious to eliminate that clause altogether because it includes a lot of products and I am sure the people interested in those products would be dissatisfied if we eliminated them. I presume

we are still talking about clause 6, which was the one we were dealing with a few minutes ago.


Edward Nasserden: A few minutes ago the hon. member for Regina referred to prefabricated wood or steel buildings for grain storage. Would the minister care to say a word about that?


Walter Lockhart Gordon: I will take the item under advisement and look into it, but certainly I am not in a position to make any particular comment upon it now.


Thomas Miller Bell: I have a question to put to the minister that is occasioned by some correspondence. If a company in Canada purchased some plant machinery in the United States before budget time and delivery has not taken place as yet, what is the position with regard to this tax? Does the minister's statement of July 8 have any effect or is the deciding factor the old standard test of in transit, the signing of the original agreement or actual delivery? I may say that I bring this matter forward because I think there is a principle involved if the budget had a retroactive effect. This type of machinery might have been purchased ahead of time end it would be an uneconomic proposition for the company were the tax imposed on it afterwards.


Walter Lockhart Gordon: The tax would not apply if the item in question had been cleared through customs at the date of the budget; otherwise, it would.


Thomas Miller Bell: I just want to say, Mr. Chairman, that this brings out the hardship to which I referred. Here is a company which, with good intentions, purchased a piece of machinery in the United States. Naturally, the company would take into account the fact that it would cost so much to deliver the machinery. However, delivery was impossible, for justifiable reasons, and now the company is caught by this provision of the budget which has a retroactive effect. I would think some consideration should be given to this anomalous situation. It is not as if the company was aware that the sales tax or excise tax would be imposed. This would have been a consideration for them.
I am quite prepared to give this problem to the minister if this makes it easier. Perhaps he might have had correspondence with this company, but I did want to point out the unfairness of the retroactive feature of the budget and the effect that has on those who, with good intentions, have ordered machinery which could not be delivered.


Walter Lockhart Gordon: I am afraid that whenever there is a change in a tax of this kind or

whenever there is a change in the tariff, and there have been some recently, those changes come into effect immediately. They apply to all importations after the date of the budget or the imposition of the tariff change, whichever it may be. It would be very difficult, I think, depending on the circumstances, to handle it differently. However, I am glad the hon. member brought this to my attention and if, in other cases, anything can be done about it in the future, I shall be glad to consider it. The precedents of the past have usually been that when a tax or tariff change is made, they apply from that date forward.


Mr. Harkness:: I should like to say a word or two about the proposal to tax rebuilt items, particularly rebuilt engines. In dealing with this proposal, I believe the minister said it was put forward because this type of remanufacturing, as I believe he called it, created unfair competition for the manufacturers of new items. I believe that is a debatable proposition. However, even if that view is accepted, there are two other principles in regard to this matter which I think are of importance.
In the first place, I should like to refer to the engine rebuilding plants which exist in western Canada, that part of the country with which I am familiar. Perhaps the situation is a little different in Ontario where you are closer to the factory that builds new engines. These rebuilding plants perform a very important service for farmers, contractors and country elevator people who use these engines. They are small industries which need to be encouraged.
The other point is that, as I say, these are all comparatively small industries and to apply a tax to them really amounts to discrimination in favour of the large engine manufacturers. I believe this policy will also create a large number of anomalies and I would hope, therefore, the minister and the government would give further consideration to the matter, particularly to the withdrawal of this tax in so far as rebuilt items are concerned, at least the rebuilt engines.


Herbert Wilfred Herridge: I rise to ask a question of the minister and to seek an explanation regarding clause 6. I refer to the words-
-forest products when produced and sold by the individual settler or farmer.
I am very interested in that because I represent a good number of people who produce forest products. What is the interpretation of the word "produced"? Does that include any element of manufacture of forest products, such as the manufacture of cedar poles? In some cases now they use mechanical devices for the peeling and splitting of shakes.
Excise Tax Act
There is quite a market in California for shakes. You will find that quite a number of people buy cheap asphalt roof shingles which only last a little time, and we are selling our good shakes to the south. Is there a distinction between "produced" and "manufactured"?


Walter Lockhart Gordon: I think the hon. member appreciates that this clause is listing the things that were exempt from the tax, and they still are. I am not in a position to define the point he raised, but I shall take it up with the officials and see that he gets an answer tomorrow or the next day.


Douglas Scott Harkness: Would the minister comment on this rebuilt item proposal?


Walter Lockhart Gordon: I shall also be glad to take that up with the Minister of National Revenue, and I would like to examine the words in Hansard when I get it tomorrow. As the hon. member knows, this is not an item in this bill, but I shall follow it up and let him know the decision.


John (Jack) McIntosh: Would the minister comment on the items I brought to his attention? I took it for granted he was taking a record of all these various items. If not, I want to go back to where I referred to boxes for farm wagons, and I do not want to go into a long story of why we do not use wagons in western Canada any more. We have very few horses now, and the wagons are being replaced by trucks.
If the minister does not accept the definition used in the Canada Grain Act, for the western producer and western farmer, would he consider adding boxes for farm wagons and trucks? I do not want to go into an argument about a truck being a vehicle, because that would take a long time.


Mr. Howe (Wellinglon-Huron):: In connection with this rebuilt engine problem that the hon. member for Calgary North brought out, I know that there is considerable confusion in the trade with regard to these rebuilt items. When a generator or something of that type, or a motor in a car is rebuilt and the sales tax is charged in one way, and a customer comes in and trades in an old transformer or generator, and gets a rebuilt one, is there a rebate of tax to the customer on the old motor he trades in for the rebuilt item?


Walter Lockhart Gordon: There is an allowance for what they call the core. I am trying to get the answer for the hon. member for Swift Current-Maple Creek, but I have not yet succeeded.


John (Jack) McIntosh: In the meantime could the minister answer my question about the logs

Excise Tax Act
and round unmanufactured timbers for fence posts. Do they qualify under that, or not?


Walter Lockhart Gordon: I understand that an ordinary fence post is exempt.


Herbert Wilfred Herridge: Most of our fence posts are three-sided and manufactured with splitting machines. Would they come under this clause?


Walter Lockhart Gordon: That is manufacturing, and subject to tax.


Edward Nasserden: I do not think I am going to change the minister's mind, but with reference to the steel granaries and other prefabricated wooden granaries, I would point out that there is an exemption on pens and parts thereof for confining livestock, and there is not too much difference between them and the steel granaries used in western Canada.
The companies manufacturing them are contributing something to the steel industry of Canada, and pricewise there is quite a spread between a steel bin and another type of bin. These companies are finding some difficulty in meeting that competition, and I would like the minister to give some consideration to including this item under the exemptions, if not cit thiic time then in the yerv npqr fnt.nrp


Walter Lockhart Gordon: I shall be glad to do that.


John (Jack) McIntosh: This question about farm wagons and trucks is a very important one, and if the minister cannot at present give us an assurance that trucks will be considered as wagons then I would like to see him stand this clause until he gets a ruling from the department. I understand that many times when his department puts items under these regulations, the interpretation of what his department proposes is entirely up to the Department of National Revenue. I want it thoroughly understood by the Department of National Revenue that if the Department of Finance considers a truck as a wagon then the Department of National Revenue will fully realize it.
Also before the clause carries I would expect the minister to give some explanation as to why soft drinks are not included, the same as other food beverages.


Walter Lockhart Gordon: On the first question, Mr. Chairman, farm wagons have been in the Excise Tax Act for a long time, and the definition is not being changed in any way in this bill. I would suggest that the hon. member, and anybody else who wishes to make representations on this matter, should do so to the Minister of National Revenue, so that the matter can be studied and considered before the next budget is introduced.


John (Jack) McIntosh: I realize farm wagon boxes
have been in-


John Whitney Pickersgill: May I interrupt the hon. gentleman, for a moment? If it would be possible to complete the committee stage in about two or three minutes perhaps we could do it, but if that would not be possible, and having consulted with hon. gentlemen opposite, I would suggest we rise, report progress and ask leave to sit later this day so that we could take a moment to pass the St. Lawrence bridge bill, which I understand no one wants to debate. It is a pure formality but there are reasons for wanting to have it passed today.


John (Jack) McIntosh: I might point out to the Secretary of State that this item is very vital to a lot of my constituents. On one occasion it cost them $500 to get a definition of this, unsuccessfully, and I do not think they should again be subjected to that type of treatment by the department. That is why I am very concerned that some definition be given before the clause is passed.


John Whitney Pickersgill: In that case I move that the committee rise, report progress and ask leave to sit again in a very few minutes, and perhaps we could pass the bill and go back into committee before we adjourn. Also we could adjourn until five minutes after seven o'clock before coming back.


Lucien Lamoureux: Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: Agreed.
Progress reported.



BOUCHERVILLE ISLANDS BRIDGE AND TUNNEL ACT


Hon. Maurice Lamonlagne (for the Minister of Public Works) moved: the second reading of Bill No. S-16, to authorize the construction and maintenance of a bridge and tunnel across the St. Lawrence river at the Boucher-ville islands, in the province of Quebec.
(Translation):


Paul Raymond Martineau: Mr. Speaker, will the minister give us some explanation on this bill?
(Text):


John Whitney Pickersgill: Perhaps I could give an explanation, sir.


Paul Raymond Martineau: Mr. Speaker, the President of the Privy Council (Mr. Lamontagne) is piloting this bill through the house and I think he should be able to explain it.


John Whitney Pickersgill: Perhaps, Mr. Speaker, as the hon. gentleman did it merely to oblige, because the Minister of Public Works (Mr. Deschatelets) happened to be out of the house temporarily, I could-


Paul Raymond Martineau: I accept the minister's
explanation, Mr. Speaker.


John Whitney Pickersgill: Mr. Speaker, as no doubt the hon. gentleman knows, being very learned in the law, no bridge can be built over any navigable system in Canada without an order in council under the Navigable Waters Protection Act, except in the case of the St. Lawrence river where the governor in council has no such power and there has to be an act of parliament.


Paul Raymond Martineau: Yes, but I would like to ask the minister whether he would give some assurance that the provisions of the Navigable Waters Protection Act and all the other statutes have been observed and that there will be no damage to navigation, communications, and so on, as a result of this bridge being constructed.


John Whitney Pickersgill: I am advised by the
Minister of Public Works, who asked to have this bill facilitated, that all the necessary precautions were taken.
(Translation):


Mr. Remi Paul (Berihier-Maskinonge-Delanaudiere):: Mr. Speaker, could the minister tell the house whether the introduction of this bill has anything to do with the holding of the Montreal world exhibition?


Maurice Lamontagne: I do not think so, Mr. Speaker. Besides, even though the Minister of Public Works (Mr. Deschatelets) is not in the house at present, he informed me earlier that he had discussed this bill with the hon. members opposite-


John Whitney Pickersgill: With the hon. member for Three Rivers.


Maurice Lamontagne: -and that it had been agreed to pass this legislation as quickly as possible, without discussion.
I do not know to what extent one can depend on such agreements.


Rémi Paul: Mr. Speaker, I am of the opinion that the remarks just made by the President of the Privy Council cannot in any way interfere with our right to inquire about the why of the measure, the need for it and the advantages it offers.


Maurice Lamontagne: Mr. Speaker, I am told that bridge has nothing to do with the world's fair in Montreal.
(Text):


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Lamoureux in the chair.
Boucherville Islands Bridge Act
On clause 1-Short title.
Thomas Speakman Barnett: Mr. Chairman, I wonder if, for my own edification if for no other purpose, the minister could indicate to us under what constitutional or statutory provision it is necessary for us in this chamber to deal with the construction of a bridge over the St. Lawrence river when apparently we do not have to go beyond the provisions of the Navigable Waters Protection Act in respect of other navigable rivers such as, for example, the Fraser river in my own province.


Guy Favreau: Mr. Chairman, my understanding is that normally any construction over navigable waters, as the Secretary of State has stated very rightly, would be simply subject to the ordinary provisions of the Navigable Waters Protection Act. But in the case of a bridge over the St. Lawrence this procedure is required, probably because of circumstances inherent in navigating that river, currents and so on. This would apply more particularly in the present case because the province is being authorized to construct the bridge and the province, being the body so authorized and, it being the intention of the law that it be subject to the provisions of the act, I think it is preferable that an act of parliament be passed authorizing the province so to do and declaring that Her Majesty, if you like, in the right of the province shall be obliged to submit to the governor in council maps, plans and other information making it certain to the satisfaction of the governor in council-as appears from clauses 3 and 4 of the bill-that the provisions of the relevant act for the protection of navigable waters have been complied with. In other words, it is a formal act authorizing the province to construct, and also providing that notwithstanding it is the province which will be authorized to construct the bridge, the provisions of the act, this notwithstanding, will apply, and sufficient information will have to be given to the governor in council.


Lucien Lamoureux: Shall clause 1 carry? (Translation):


Georges-J. Valade: Mr. Chairman, I take a special pleasure in speaking on this bill, as, several years ago, that is in July 1960, I asked the federal authorities, in this house, to look into the question of building a tunnel bridge under the St. Lawrence.
If one looks up Hansard, one sees that, on that occasion, some hon. members, who are now sitting on the other side of the house, had found my suggestion rather odd. Some even went as far as to say that it was an impractical idea and that it was impossible to think of building a tunnel bridge under the St. Lawrence,

Boucherville Islands Bridge Act
I am therefore the more pleased to see that the idea has gained ground and that, today, the provincial authorities consider that, for the esthetic appearance of the city of Montreal and a better access from the south and north shores, a tunnel bridge, as now planned, will serve the people of the city of Montreal and those who live on the south shore to greater advantage.
Of course, the purpose of the bill before us is limited. As I understand it, it is only a question of authorizing the provincial government to build that road under the St. Lawrence, and the federal government has only to accede to that request or to reject it.
I know that this government, being politically well disposed towards the provincial government of Quebec, will certainly not reject a project initiated by the Conservatives, which once more will prove the foresight of hon. members sitting on this side of the house who a few years ago were seated on the government side.
I suggest, Mr. Chairman, that hon. members from the	city of Montreal,	who	are	now[DOT]	*1 [DOT]	'	-	-	
+1,^	nUn
xxi ixxxa auuoc	cxo xc^a counuuvco ua	im.	jof Montreal, Canada's metropolis, should intervene and energetically speak	up	on	this
legislation.
As I said and now repeat, the sole purpose of the bill is to authorize or legalize a contract which will enable the provincial government to build that tunnel.
I would like the responsible minister to tell the house whether the site, which has been chosen or is to be chosen is the most appropriate one. I do not know whether this comes under the minister, but I would like to know, as the representative of a county of the city of Montreal, who will be affected by that project, whether the province of Quebec has considered demographic conditions before deciding to build this tunnel at the designated site?
I understand that the bill does not exactly determine the site of that tunnel bridge, but it is a most important factor, because the 1967 world fair will bring a surplus of traffic, and the city of Montreal may suffer from rather considerable bottlenecks if the two approaches are too near to each other, that is to say the Jacques Cartier bridge and the proposed tunnel bridge.
So I wonder whether the minister is in a position to tell us if that road will be built in the near future, if it will be completed in
[Mr. Valade.l

time for the 1967 world fair and if the Canadian metropolis will benefit from its location?


Mr. Deschalelels:: Mr. Chairman, following the remarks just made by the hon. member for St. Mary (Mr. Valade) I should like to say this.
As regards the site of the tunnel and bridge, both in Montreal and in Ville Jacques Cartier, I must say the choice was made by the province of Quebec. Federal government engineers examined the site selected and were perfectly satisfied that the tunnel and bridge would not hamper navigation. That is why, when the bill was discussed in committee in the other place, those explanations were given by the engineers themselves. So much for the location and the site.
Now, as for the project itself, the construction of the tunnel and bridge is expected to be completed by 1967 if the work is done without delay and not hindered by anything unforeseen. Therefore, the bridge is to be ready for the 1967 world fair.
1 hope tbat my remarks answer the question of the hon. member.


Georges-J. Valade: Mr. Chairman, would the minister allow me to ask a few other questions?
I know that the minister, who is a fellow member from the metropolis and whose county is located very close to the one I represent, is certainly aware of the traffic difficulties at the approach of the Jacques Cartier bridge where Dorchester boulevard ends. The planned bridge tunnel will result in bringing traffic to a place where the roads are very little developed and are, in my opinion, quite inadequate to absorb the excess traffic at certain hours of the day.
When I spoke on this matter a few years ago, I asked the minister of public works whether he would consider the possibility of building a super highway around the city of Montreal so that we would have, as in the large cities such as New York, a boulevard which would provide an easy access to all the exits from the city of Montreal.
Therefore, I am wondering whether the Minister of Public Works could not take this opportunity to tell us-


Some hon. Members:: Order.


Georges-J. Valade: -whether he has acted
further-


Lucien Lamoureux: Order. I do not want to interrupt the hon. member, but I must remind him that we are at present discussing legislation which has nothing to do with the construction of any super highway through the city of Montreal. I would therefore ask him to deal with the subject matter of the bill now before the committee.


Georges-J. Valade: I wish to thank you for your remarks, Mr. Chairman. However, in my opinion, this matter is closely related to the bill we are discussing at present, because the bridge will inevitably open on a congested artery in the city of Montreal.
If the federal government has authority to authorize the city of Montreal to build a tunnel bridge, it also has authority on the Montreal harbour, which is federal government property, and it should facilitate access to that bridge tunnel. I believe that both problems are related, because one depends on the other. If the government does authorize a bridge giving on a dead-end, I am of the opinion that the people of the city of Montreal will be ill-served. Could the minister enlighten the house in that respect?


Jean-Paul Deschatelets: May I remind the hon. member that responsibility in that field belongs to the province and the city of Montreal? Even though the question raised by the hon. member goes beyond the proposal in this bill, I could still tell him that we have received a proposal from the province of Quebec in connection with the trans-Canada highway. This proposal mentioned that the entrance to this tunnel will communicate with an expressway in Montreal, going in an east-west direction. I trust this will answer the hon. member.


Georges-J. Valade: I will end by congratulating the federal and provincial authorities for having accepted to make this improvement suggested to them by the Conservative party, which shows that the Conservatives are better law-makers.


Jean-Paul Deschatelets: Mr. Chairman, allow me to say a few words in reply to the remarks made by the hon. member. My hon. friends opposite often make beautiful plans but, on the other hand, we, the Liberals, are always there to implement them.


Georges-J. Valade: Mr. Chairman, the minister's reply forces me to ask him if unemployment is one of the projects implemented by the Liberal party?


Lucien Lamoureux: Clause 1 is agreed to. (Text):
Clauses 2 to 5 inclusive agreed to.


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


John Whitney Pickersgill: Now, by leave.


Jean-Paul Deschatelets: Mr. Speaker, since it is not a contentious bill I think hon. members would like third reading to be called now. (Translation):


Jean-Paul Deschatelets: the third reading of Bill S-16, an act to authorize the construction and maintenance of a bridge and tunnel across the St. Lawrence river at the Boucherville islands, in the province of Quebec.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
(Text):

[Stage Direction]
The house resumed consideration in committee of Bill C-90, to amend the Excise Tax Act-Mr. Gordon-Mr. Lamoureux in the chair.
On clause 6.
Lucien Lamoureux: Order. House again in committee of the whole on Bill C-90-


Michael Starr: Mr. Chairman, since it is past six o'clock and the committee will again resume at seven, would it not be possible to defer the seeing of seven o'clock till, say, a quarter past seven, as some of us have to be here at the resumption?


John Whitney Pickersgill: Mr. Chairman, I would be in complete accord with the hon. gentleman, and if Your Honour could see it was seven o'clock only at 7.15 it would give us time to eat.


Lucien Lamoureux: Order. House again in committee of the whole on Bill C-90, to amend the Excise Tax Act. It being six o'clock I do now leave the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 7.15 p.m.
Lucien Lamoureux: Shall clause 6 carry?


John (Jack) McIntosh: I am sorry, but I cannot allow this clause to be carried unless I receive an explanation from the minister with regard to the term "boxes for farm wagons".


An hon. Member:: I thought it was boxes for sardines.


John (Jack) McIntosh: I think the hon. member across the way should be recognized, Mr. Chairman. I do not know what his constituency is.

Excise Tax Act
With regard to these boxes for farm wagons, we in the west, as I said before six o'clock, do not use wagons any more on our farms. We use trucks. This term "wagon" is not defined by the Department of National Revenue in the same way as it is defined in the Canada Grain Act, namely as any vehicle which will take grain from a farm to an elevator. As a result, the farmers of western Canada are having to pay between $300 and $400 in tax on these articles for lack of a suitable definition. As I said earlier, one of my constituents spent more than $500 trying to get an explanation of this term "wagon". We cannot understand why the Department of National Revenue would not accept the term as defined by the Department of Finance. We have been told by officials of the Department of Finance that "wagon" does mean "truck"; but the Department of National Revenue would not accept that. They would not accept * that a box for a wagon or a box for a truck are exactly the same thing and are intended for the same purpose. In the light of the cost-price squeeze problem which we are facing in western Canada I cannot accept this clause as it is set down here, unless an explanation is forthcoming from the minister.


Walter Lockhart Gordon: I think it is fair to say that the hon. member has explained his case very clearly, but the fact is that this reference to wagons has been in the act for a long time and is not being changed by this amending bill. It is not proposed to change it. There is no suggestion of changing it here. It is not proposed by the government to make a change in this particular item. A farm truck is a wagon and although wagons are exempt we must draw the line at making trucks exempt. A farm wagon is dedicated to use on the farm. A truck, on the other hand, is used for many other purposes besides agriculture. I am sorry that the government is not prepared to accept the hon. member's suggestion that this particular item be extended.
He also asked me before the adjournment why soft drinks are not being made exempt. All I can say in reply is that soft drinks have been subject to the tax for some time. To exempt them would cost the treasury about $12 million and in my opinion the treasury is not in a position to suffer a loss of revenue to that extent.


John (Jack) McIntosh: I do not think the minister got my point. I have no quarrel with him when he says that trucks should not be exempt. I am talking about the boxes that go on the truck or on the wagon. It is a grain box, and whether it is on a wagon or a truck should not make any difference. I should like

to get that point across to the minister. I am not saying that trucks should be exempt.
I have had the same argument with the department before. They have maintained time and time again that the box is part of the truck. To me the box is not part of the truck. It is not manufactured by the people who manufacture trucks. When a farmer goes to buy a truck with a grain box on it he has to make two separate purchases. The box is not made by the same people who make the chassis of the truck. He has to buy it from an implement dealer, and then we get into the argument about what an implement is.
I have a great deal of correspondence before me in connection with the argument I have had with the department before. I am not talking about a truck. I am talking about the box that goes on the truck or the box that goes on the wagon. The minister has said that this provision has been in the act for a long time. I realize that; but the point is that since it was originally put in the act progress has been made in farming. We do not use horses any more. If it is a wagon it is drawn by a horse. Now we have trucks that use the same type of box formerly used on a wagon. 1 see no difference in the bux at all, and all I am talking about is the box that goes on the truck.


Edward Nasserden: Mr. Chairman, I think the point brought up by the hon. member for Swift Current-Maple Creek is an important one because these boxes found on trucks today are taking the place of boxes that used to be on wagons in years gone by. The minister said that the legislation has not been changed over a long period of years. Surely during such a long period of time there must be progress somewhere along the line. We are not going to sit back and take everything that was brought forward over the last 60 years and continue it simply because it has been in effect for a long period of time. That is a weak argument. A change has been suggested by the hon. member-


Walter Lockhart Gordon: With the greatest respect, the hon. member had six years in which he could have done something about it. I am perfectly prepared to consider this point very carefully but not at this moment.


Stanley James Korchinski: The tone in which the Minister of Finance speaks would indicate that he is not prepared to take a few extra minutes to deal with the problem presented by these members. It is a good case and the minister should take a few extra minutes to consider it. I assure the minister that if he had taken a few extra minutes on some of these other items he would have had a lot less trouble.


Walter Lockhart Gordon: I am perfectly prepared to do that, but before making a change of this kind I would really like to know not only all the arguments in favour of the proposition but what arguments, if any, there may be against it.


John (Jack) McIntosh: Then is the minister willing to stand this clause?


Walter Lockhart Gordon: I recognize the difficulty here. As the hon. member said a few minutes ago, he is not arguing that the truck should not be taxed but he is arguing that the box that goes on the truck should be free of tax. So you have a beasty or you have an article, the basic part of which should not be free of tax, but it is argued that a piece of it should be free of tax. It seems to me, with all due respect to the hon. member, that this drives us into a rather difficult position, and it is for that reason that perhaps I have been less enthusiastic about accepting his proposition than I might otherwise have been.


John (Jack) McIntosh: Mr. Chairman, if the box was imported and there was an end user's certificate that it would only be used for agricultural purposes I think that would solve the problem. To me it does not make any difference if the box goes on a wagon or a truck, but apparently the minister is prepared to say that if it goes on a wagon it is exempt but if the same box goes on a truck it is taxable, which does not seem reasonable.


Walter Lockhart Gordon: Because the wagon is exempt and the truck is not. I can see the hon. member's point of view, but I presume he can also see the point of view I am trying to present, that we are dealing with a wagon that is exempt and a truck which is not. The hon. member has suggested that if the box goes on a wagon it is exempt and therefore if it goes on a truck it should also be exempt. I am putting the point of view that the complete article, wagon and box, is exempt. The hon. member has pointed out that it is obsolete in the west but it still may be used occasionally in some other parts of Canada that are perhaps less progressive. But if we get into a situation where we are dealing with a hybrid, the main part of which is subject to tax and part of which is not, I am sure that in the end we will end up with a worse situation than if I had not accepted the proposal.


John (Jack) McIntosh: Let me try to clarify this point. I have contended in the past that the box is neither part of the wagon nor is it part of the truck, and so that I do not go off on a tangent I should like to read a few paragraphs of a letter I wrote to the department trying
Excise Tax Act
to put across my argument. They contend that the box is taxable under tariff item 438f. In my letter I said:
Item 438f deals with parts of motor vehicles.
A box is not a part of a motor vehicle.
I contend that a steel truck, grain or livestock box is not part of what is considered a motor vehicle or the chassis thereof, but rather an article to be mounted or attached thereto. Item 438a states such articles shall be valued separately and duty assessed under tariff items regularly applicable thereto.
In western Canada-
As I said before.
-and the same may be said of eastern Canada,-
I am not too sure about that.
-automotive dealers very seldom sell a farm truck or vehicle with steel grain box attached. If the farmer requires a grain box the normal procedure is for the farmer or dealer to obtain one from an implement dealer. Grain and livestock truck boxes are usually manufactured by those specialized in manufacturing agricultural implements and not from automotive manufacturers. Most automotive dealers price sheets list chassis only and do not include a price for a grain or livestock box.
Therefore, I contend a grain box should not be considered as a part of the truck, or vehicle, but considered under some other heading.
I do not care under which heading we consider it.
I further contend a steel grain or stock truck box could be included under the heading of agriculture implements-
This is already in the tariff item.
-for the following reason. In legal dictionaries, the term implement is defined as a thing of necessary use in any trade.
Certainly, a truck box is used in the trade of agriculture.
The word necessary is defined as those things to the doing of a thing which are reasonably required.
A box is essential to the truck if it is going to be used to haul grain. You can put the same box on a wagon or a truck with certain modifications. I do not see why you differentiate between the two.


Stanley James Korchinski: I should like to add a few words to what has already been said by the hon. member for Swift Current-Maple Creek. You can take the same box and put it on a truck, a wagon or a sleigh for that matter. Surely, the minister himself can see that this is the type of unit that can be used for agricultural purposes. The minister is saying that this is a complicated procedure through which we have to go before we can get an exemption. I recall, for example, that during the war the procedure was very simple. Eaton's and Simpson's had a blank form in their mail order catalogue and all you had to do was fill out the form to indicate that you were a farmer and that the particular item

Excise Tax Act
you were buying was for farm purposes. This was all that was required during the time of war. This method was devised by people who were getting a dollar a year. Now, however, we find this is an extremely complicated problem and the matter cannot be looked at for another year. This does not make sense.
This is an item that is being used on a farm. A man can take that same box off a truck and put it on a wagon or put it on a sleigh and use it for the same purpose. The only difference is that he uses a different method of propulsion. It seems to me that it would only take a few minutes for the minister to say that if a form were filled out signifying the equipment was for agricultural purposes, it would be exempt.


Mr. Watson (Assiniboia):: A few minutes ago the minister mentioned that a box for a wagon was exempt. So far as we are concerned in the west, when we think of a wagon we naturally think of the old steel wheeled wagon and that has been out of existence for a long time. The truck has now replaced it. However, if you wanted to get a truck the same size as the old wagon you could still buy this same wagon box for the now extinct wagon, put it on the truck and you would be home free. However, as a result of the fact that trucks today have a larger capacity you have to have a box of a larger size.
These boxes are for farm use almost entirely, I would say, and usually of wooden construction. The steel box is the only box that might have a dual purpose. I think it is just a matter of realizing that the wagon has almost disappeared as an implement for hauling grain. It is still used for small jobs around the farm, but for the purpose of hauling grain off the farm and into the elevator it is no longer used.


Mr. Baldwin:: I think this is a good place for me to intervene since I have practised law as well as done a little bit of farming. It seems to me that the government should give consideration to the changing conditions as the result of rail line abandonment. The original purpose of a farm wagon was to draw grain a distance of seven miles which, under the Railway Act, was the shortest distance between two elevators. Obviously the grain is going to have to be drawn anywhere from 30 miles to 40 miles if this rail line abandonment legislation proceeds.
I draw to the minister's attention the phrase which has been referred to by my hon. friend, that this is a box for a farm wagon. This indicates the boxes are individual items. Perhaps the minister would agree to simply adding after the words "farm wagons", the

words "farm trucks". He would then have an amendment which would be quite plain. These would be separate items used either for farm wagons or farm trucks. I do not believe there would be any great difficulty about agreeing to that simple amendment which would meet the very reasonable request made by the hon. member.


Edward Nasserden: A minute ago the minister mentioned the last six years. I do not know whether or not that was an invitation to discuss some of the events that took place during that period. We on this side of the house would be very glad to make reference to some of the things that are done in this particular bill. Reference has been made by the hon. member for Peace River to rail line transportation which bears directly on the changed situation in connection with agriculture in western Canada as it affects this particular item. For that reason, we would like the minister to give some recognition to this problem, at least more recognition than he has indicated in his remarks this evening.


Stanley James Korchinski: 
Walter Lockhart Gordon: I think all I can say is that I do not believe this is the time to make representations on this matter. If hon. members will make representations to me, I will go into them very carefully but I do not believe we can do it tonight.


Stanley James Korchinski: We will make representations if the minister will give us an opportunity two months later to have another budget.


John (Jack) McIntosh: This is not the first time we have approached the department on this issue. I believe the hon. member for Peace River has brought up a very important point because in some parts of Saskatchewan some of these rail lines have been abandoned, necessitating the haulage of grain in bigger quantities longer distances. I say this is the place

and the time is now, for making representations. I do not believe the amendment suggested by the hon. member tor Peace River would be out of place. I believe, actually, we are talking about the same thing. It is just a matter of interpretation so far as the department is concerned. I think the minister has recognized, essentially, that a box for a truck, a wagon or a sleigh is the same thing. There should be no discrimination between them.


John Whitney Pickersgill: May I ask the hon. member a question?


John (Jack) McIntosh: Yes.


John Whitney Pickersgill: He said he made representations to the department previously. Could he tell us whether Mr. Fleming or the hon. member for Digby-Annapolis-Kings were tougher?


John (Jack) McIntosh: I realize why this question was asked by the Secretary of State. He is trying to make it a political question and I am trying to stay away from making it a political question. However I will say this, that I was just as annoyed with the previous administration as I am going to be with this one if it does not do this, and if the Secretary of State is as true a Canadian as he professes to be he will prevail on the Minister of Finance that this is a necessity. If he wants his government to help western Canada he will see that this is put through.


Edward Nasserden: Not only that, but it would be a feather in his cap if he did.


David Vaughan Pugh: I am wondering if the Minister of Finance has gone into the request made a week or so ago, when this was at the resolution stage? At that time a good deal was put forward with regard to wagons, and I am wondering whether the government has given any further consideration to the possibility of an amendment?


John (Jack) McIntosh: I might also say that I recognize the necessity of protecting eastern industry, but if the minister will go back into the history of the question he will find that eastern industry has been protected for over two years on this very item, and none of those engaged in manufacturing this type of box in eastern Canada found enough volume to necessitate manufacturing it. With the two or three years protection they have had we could now import them from the United States tax free, if there are only a few of them, in the same way as anything else.


Lucien Lamoureux: Shall the clause carry?


David Vaughan Pugh: May I have an answer to my question?
Excise Tax Act


Walter Lockhart Gordon: What is your question?


David Vaughan Pugh: The question I am asking is this: because of representations made on the floor of the house in committee, in the last week or two when on resolution stage, has the government done anything about considering an amendment?


Walter Lockhart Gordon: I wonder if the hon. member would refer to the page in Hansard where this was mentioned.


David Vaughan Pugh: I do not have it. However I asked the question myself, as did possibly three other members who were present at the time.


John Whitney Pickersgill: Could the hon. member look it up?


David Vaughan Pugh: I do not think it is necessary. Apparently the government did not pay attention to what was said, but I am sure we could have an answer to the question. The hon. member for Peace River has brought forward a most important point, that because of rail abandonment a farmer has to truck more than seven miles. Therefore it is something that should be considered, and the government has had notice of this within the last week or two.


Lucien Lamoureux: Shall clause 6 carry?


John (Jack) McIntosh: No. I move, seconded by the hon. member for Peace River:
That clause 6 be amended by adding after the words ''boxes for farm wagons" the words ''and farm trucks."


Walter Lockhart Gordon: I wonder if Your Honour has considered whether the amendment is in order?


Gerald William Baldwin: Might I make a submission on that point. I think it has already been noted by the hon. member for Swift Current-Maple Creek that it has been indicated by one of the departments that such an interpretation as we are striving for now might be accepted. We are not trying to add anything which was not included before. We are merely attempting to clarify an existing definition.


Walter Lockhart Gordon: I want to make it quite clear that farm trucks are not included.


Gerald William Baldwin: We are not asking for farm trucks. We are asking that boxes attached to farm trucks be included in the definition of boxes presently used.


Lucien Lamoureux: In the opinion of the Chair the proposed amendment extends the scope of the resolution and is therefore out of order and cannot be put to the committee.


John (Jack) McIntosh: I disagree with your ruling.

Division
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:
In committee of the whole when Bill No. C-90 was being considered the hon. member for Swift Current-Maple Creek (Mr. McIntosh) moved the following amendment:
"That clause 6 be amended by adding after the words "Boxes for farm wagons" the words "and farm trucks".
The Chair ruled the amendment out of order on the ground that the proposal was outside the scope of the resolution adopted in committee of ways and means on which the bill was based, whereupon the hon. member for Swift Current-Maple Creek appealed to the house from the decision of the Chair.


Mr. Speaker:: Is it the pleasure of the house that the chairman's ruling be confirmed? Those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the ruling confirmed.


Richard Joseph Cashin: I was paired. Had I not been paired I would have voted to uphold the ruling.


Walter Lockhart Gordon: I was paired. If I had not
been, I would have voted to uphold the ruling.


William Howell Arthur Thomas: 
Mr. Mackasey:: I was paired. If I had not been paired I would have voted to sustain the ruling.
(Translation):


Paul Raymond Martineau: Mr. Speaker, I was paired with the Associate Minister of National Defence (Mr. Cardin). Had I voted, I would have voted against your decision.


Mr. Gerard Ouellel (Rimouski):: Mr. Speaker, I was paired with the hon. member for Matapedia-Matane (Mr. Tremblay). Had I voted, I would have voted against your ruling. (Text):
And the house having resumed in committee:
On clause 6.


Edward Nasserden: Mr. Chairman, I do not think the House of Commons has seen a minister deal with a matter of such importance to the agricultural industry in such a cavalier fashion as did the Minister of Finance this afternoon and this evening.


Some hon. Members:: Order.


Lucien Lamoureux: Order. I think the hon. member will recognize that he should be talking about the bill and not about the attitude of hon. members of the house.


Edward Nasserden: Thank you very much, Mr. Chairman. I want to talk about the particular item before us at the present time. I want to draw on the history of the Liberal party-


Lucien Lamoureux: Order. The hon. member realizes that when he prefaces his remarks by saying that he wants to go over the history of the Liberal party is immediately going beyond the bounds of clause 6.


Edward Nasserden: Mr. Chairman, I thought hon. members opposite would welcome it, but I see that they do not so I will try to keep away from it. I should like to say though that one of the precepts that has been recognized by the parliament of Canada over a number of years has been that agricultural implements should enter this country free of excise taxes. In this instance boxes for farm trucks are being denied this preference. That has been the substance of the argument put forward by the hon. member for Swift Current-Maple Creek and other members from farm constituencies in this debate.


Lucien Lamoureux: Order. Perhaps hon. members would like to co-operate with the Chair and with the hon. member who now has the floor so that we will have the opportunity to hear him out.


John Whitney Pickersgill: Mr. Chairman, before the hon. gentleman resumes what he has to say, perhaps it might be drawn to Your Honour's attention that Your Honour ruled that a cer-
Excise Tax Act
tain amendment was out of order as being irrelevant to the bill, and if it was out of order to move the amendment as it was irrelevant to the bill it would appear to me that what the hon. member is now saying is equally out of order.


Paul Raymond Martineau: Mr. Chairman, it is quite
clear that the Secretary of State has raised a point of order which has no application in the present case. Surely we are not going to be prevented from discussing a clause that is pertinent to the bill. I might remind the Secretary of State that we have not yet passed clause 6 and as the remarks are relevant to the discussion of clause 6 the discussion should therefore be permitted.


David Vaughan Pugh: On the point of order, Mr. Chairman, I do not know whether Your Honour has made up your mind or whether you wish to hear more, but there is no question but that we are still talking about farm boxes. An amendment was put forward and turned down which had to do with bringing them in free of charge. We are still talking about farm boxes as far as I can see and I think the hon. member is quite right in going ahead.


Lucien Lamoureux: Order. I think hon. members will agree that a decision has been reached on that very point and the Chair does not consider that the point can be reintroduced now. However, I am quite disposed to hear further from the hon. member for Rosthern to determine exactly what his proposed argument is going to be, and a ruling can be made then as to whether or not he is out of order.


Edward Nasserden: Mr. Chairman, the point I was trying to make, and it may not be recognized by some as very valid, was that throughout the years parliament has recognized the fact that farm implements should enter the country free of duty. While the act has been interpreted in a certain way for a number of years, quite a change has taken place in the agricultural industry in recent years and the result is that a situation has come about with regard to interpreting the intent of parliament in this particular instance which in the minds of the farmers of western Canada at least approaches bureaucratic arrogance and stagnation. It was that point I was trying to draw to the attention of the committee and particularly to hon. members opposite who from time to time have been very loud in their boasting that it was their party that brought these benefits to the agricultural community of Canada.


Fred Frise Stenson: Mr. Chairman, this afternoon the hon. member for Saint John-Albert

Excise Tax Act
spoke about importing machinery and I understood the minister to say that the tax would be levied as of the date the budget was brought down. Does this cover the importation of machinery and equipment for dairies?


Walter Lockhart Gordon: It depends a good deal on the kind of machinery about which the hon. gentleman is talking. If it was taxable under the budget proposals it became taxable on the date of the budget. If it was not taxable it still is not taxable.


Fred Frise Stenson: It was not taxable before the budget was brought down but I understand there will be an 11 per cent tax.


Lucien Lamoureux: Order. The Chair has
recognized the hon. member for Kootenay West. Perhaps we can come back to the hon. member for Peterborough in a moment.


Herbert Wilfred Herridge: Thank you, Mr. Chairman. I have been trying to restrain myself as much as possible and to rise only to seek information or to advocate a cause. I wish to refer to the provision having to do with "boats bona fide purchased by fishermen for use in the fisheries", and so on. I have the honour to represent some farmers who have to use boats as the only method of transportation in going to the villages or in transporting their supplies, cattle, fruit and things [DOT]of that sort. Has consideration ever been given to the farmer who has to buy a boat and in some cases operate a small barge to transport his produce by way of extending the same exemption to him as in the case of fishermen?


Walter Lockhart Gordon: Mr. Chairman, I think this is the first time, as far as I know, that the proposition has been presented, so I am afraid that no consideration has been given to the situation to which the hon. member has just referred.


Herbert Wilfred Herridge: Would the minister consider for inclusion on another occasion bona fide cases of persons who are confined to water transport?


Walter Lockhart Gordon: Yes, I would be very glad to. Perhaps a little later we might have a discussion about this matter and the hon. member might inform me in a little more detail about the problem.


Herbert Wilfred Herridge: I thank the minister. There are only a few cases, but I think persons living under these circumstances are entitled to every consideration. They are on the frontier and are rendering a great service.


Fred Frise Stenson: I had reference to machinery or dairy equipment being brought in. In discussing the matter with the Department of

National Revenue on June 25 they agreed that the tax would be refunded. These people had a contract price for the equipment.


Walter Lockhart Gordon: I presume in that case it was being imported by a wholesaler of some kind for resale, in which case that would be the proper interpretation.


Mr. Winkler:: Mr. Chairman, I should like to direct the minister's attention to an item on page 5, line 20, where there is a reference to soft drinks. I realize this matter has been referred to before and I heard the minister's statement in this regard. It was rather revealing. He may say when I have finished that I should have taken up this matter with the previous administration when we formed the government, so let me assure him immediately that I did. I feel that if the items included under flavourings, extracts, emulsions and powders are not taxable, then soft drinks should not be taxed either because of the discriminatory nature of such a tax.
I am sure that the minister will find some support for my argument from his colleague the Minister of National Revenue. I do not say this by way of advertisement for the Minister or iMationai rtevenue, out we ail know he is a big Pepsi-Cola man. I am sure the Minister of National Revenue will agree with me that this is a discriminatory tax when we consider that these drinks for children such as Fizzies and Kool Aid are not taxed, and they are sold in great quantity. If these items are sold to the public tax free, then I feel the soft drink industry should have the same consideration. All I am asking is that the area of discrimination be eliminated. Either this tax should be imposed across the board or we should extend the extension to soft drinks. I am thinking here of the advantage to the industry, Mr. Chairman, because the minister has indicated that the revenue from that particular industry is in the neighbourhood of $12 million. Is that correct?


Walter Lockhart Gordon: Yes, that is correct.


Eric Alfred Winkler: This is a lot of money to receive as revenue of the country. I just ask that consideration be given to relieving the discrimination against one of these industries.


Walter Lockhart Gordon: I wonder if I might ask my colleague, the Minister of National Revenue, to reply to that comment?


John Richard Garland: Perhaps I should use this opportunity to correct the impression that may have been left by what the hon. member said about my connections with the soft drink industry. Prior to joining the cabinet, I resigned from all my directorships and active management of my soft drink business.

Now, dealing specifically with this question, I might say I do not believe the hon. gentleman has fully appreciated what is intended here. Food flavourings, extracts, emulsions and powders, not including those for beverages, are mentioned. Soft drinks, as such are taxable. These ingredients that go into these soft drinks are exempt, because the manufacturer of soft drinks can purchase these items tax exempt under licence.


John (Jack) McIntosh: I do not believe the minister's explanation is correct because the item says, "not including bases or concentrates for making soft drinks". They are not exempt, therefore.


John Richard Garland: There again I do not believe the hon. member for Swift Current-Maple Creek fully appreciates the situation. These bases and concentrates of course, are taxable. But when they are turned into the finished soft drink the soft drink manufacturer is able to purchase them tax exempt. You are talking about two different things. You are talking about the bases and syrup that go into the drink and confusing them with the finished soft drink.


Eric Alfred Winkler: I would not want the Minister of National Revenue to think I am trying to put across the idea that there is double taxation. I am saying there should not be tax discrimination against the manufacturer of soft drinks as opposed to other beverages which compete on the market in precisely the same field.


Walter Lockhart Gordon: I should like to assure the hon. member that alcoholic beverages are, in fact, taxed to quite an extent, if he is thinking about that.


Eric Alfred Winkler: That is an absolutely irrelevant argument. I am talking about soft drinks, the item here. If the minister becomes involved in any more irrelevant discussion, Mr. Chairman, you should set him down. I am only referring to the two kinds of soft drinks a consumer may purchase in a shop. One is taxable and the other is not. This is discrimination against the soft drink industry.


Stuart A. Fleming: I
should like to direct a question to the minister which departs from the present discussion but does relate to the exemption provided by clause 6 of the bill. What is the position of a municipally or provincially owned public utility, apart from sewage disposal utilities that are provided for in the bill, for example a utility generating electric energy from thermal or other sources, so far as exemption from this building materials and production machinery tax is concerned? Does the public 28902-5-179
Excise Tax Act
utility producing electrial energy qualify for exemption from taxation or is it taxable?


Walter Lockhart Gordon: It is taxable, Mr. Chairman.


Stuart A. Fleming: May
I ask a supplementary question? Does that mean a project such as the Columbia river project in British Columbia, which is presently under negotiation and is a provincially owned utility, would be subject to tax on both building materials and production machinery?


Walter Lockhart Gordon: Yes, Mr. Chairman.


Stanley James Korchinski: I do not believe the Minister of National Revenue completely understood the argument presented by the hon. member for Grey-Bruce. I am sure he is quite familiar with the problem. The complaint is that the manufacturer of soft drinks pays the tax but any vendor of lemonade or Kool Aid does not pay the tax. The suggestion is that either this tax should be removed or both people should pay the tax. This is the only point of argument that has been presented, so far as I am aware.


Walter Lockhart Gordon: Mr. Chairman, as I understand it, all these products are taxable. In the case of some of them you only buy a little powder and there is no tax on the water that goes with it.


Mr. Byrne:: Since the discussion has ranged from dump boxes to soft drinks and to cabs over caterpillars and tractors, I want to bring to the attention of the committee the fact that this objection to the tax on soft drinks is not a new one. I can recall that 10 or 12 years ago I endeavoured to persuade the then minister of finance that there was discrimination in respect of the tax on soft drinks. I am sure the soft drink industry does create a large amount of employment as compared with the industry which manufactures these powders. The mixing, bottling, washing of the bottles, packaging and distribution by truck all provide a considerable amount of employment and these employees contribute greatly to our tax return.
I was disappointed, Mr. Chairman, that you ruled the hon. member for Rosthern out of order, because I do think that a history of the-


Lucien Lamoureux: Order. I do not wish to interrupt the hon. member uselessly, but we have already decided that we should not go over the ground which has been decided upon by the vote of the house.


Eric Alfred Winkler: If the hon. member is prepared to move an amendment I would be very pleased to support it.

Excise Tax Act


James Allen (Jim) Byrne: I would be delighted to move an amendment, but I bow to your ruling, sir, that an amendment affecting the balance ot ways and means would be out of order. Since you have ruled the matter of dump boxes out of order, I am wondering whether it would be in order to remind the committee that the hon. member for Marquette, on July 16, was in favour of imposing an excise tax on the cabs that go over trucks and tractors and other machinery. Really, the only difference between a cab and a metal box is that the cab is a box upside down. Therefore there is no real difference, and the Conservative party is not unanimous in opposing excise taxes on farm machinery.


Eric Alfred Winkler: Did I understand the minister correctly? Did he tell me that there is a tax on these small packaged drinks sold in grocery stores?


Walter Lockhart Gordon: Yes, Mr. Chairman.


Eric Alfred Winkler: At what stage?


Walter Lockhart Gordon: Manufacturer's selling price.


Stuart A. Fleming: I
would like to come back to the answer the minister "aye a few moments ago regarding the imposition of a tax on building materials and machinery as related to provincially and municipally owned electric producing utilities. Is it not true that, prior to the introduction of these amendments, building materials and production machinery used in the construction of hydroelectric and thermal electric producing plants were exempt; and is it now the purpose of this bill to add on to the cost of the development of such plants an additional 4 per cent, 8 per cent or 11 per cent, depending on their timing? Does this not defeat the very purpose of the minister's declared intention, on the introduction of the budget, that we wish to encourage secondary industrial development in Canada?
If we, by the introduction of this tax, attack the very root source of energy for secondary industries, which I can only assume is the outcome of the minister's answer to my question, then do we not attack the very basis of his intention to build a flourishing and developing economy?
Although I feel this ought to be done for private industry, if it cannot be done for private industry then at least it should be done for public industry owned by provinces and municipalities. Surely this should be re-assessed, and if it cannot be done now it should be done at some future time.
If we impose 11 per cent, or as is the case 4 per cent in the immediate future, of additional cost on a major public utility such as the Columbia river project or the Peace river project in B.C., where hundreds of millions

of dollars of capital development are involved and where loans have to be secured and amortized over 20, 30 or 40 years, and if that initial increase in cost occasioned by this tax has to be amortized at 4 per cent over the same period, then it is possible some of the major developments in the country will be brought to a standstill because the power produced from them will be uneconomic. Costs are being imposed on these projects that had not previously been considered because there was no federal tax on the cost of building materials and production machinery.
I do not want to impute any motive whatever to the minister. I do not want to suggest that there has been carelessness here. I only ask whether consideration has been given to the effect of the imposition of this tax on the cost of installation and operation in respect of projects as large as the Columbia project in British Columbia will be, or as large as the Peace river project is at present?


Herbert Wilfred Herridge: I briefly want to support the hon. member for Okanagan-Revelstoke in his appeal to the minister to reconsider this matter. I do urge that he use this new period of restagnation to give it very serious consideration.


David Vaughan Pugh: The hon. member for Okanagan-Revelstoke made a rather good point, and I wonder if the minister could give us any information as to whether officials from British Columbia or any other province have made representations to the government asking that the 11 per cent tax be taken off building materials and production equipment used in this type of project? I am reliably informed that the additional cost on the Peace river project will be $18 million.


Walter Lockhart Gordon: Representations were received; they were considered carefully and, as hon. members are well aware, certain modifications were made in the application or implementation of the tax. It is the policy of the government to proceed with it on this basis.


Stuart A. Fleming: If such representations from provinces and municipalities have been rejected, then apparently there is no hope for private investors such as those who, during the last eight or ten months, indicated that they intended to proceed with the development of pulp mills at Kamloops, Prince George, and several points on the coast, projects which to the best of my knowledge would cost over $200 million. I believe that the projected costs of the development at Kamloops run as high as $26 million; at Prince George, $50 million and on the coast a further $100 million, approximately, by various companies. There has been the suggestion of potential development at

Kitimat, taking advantage of the power available from the Alcan power production capacity there.
Does this mean that private industry in Canada which is prepared to invest substantial sums in the development of secondary industry, and in British Columbia particularly in the pulp and paper industry, where approximately $200 million, it has been announced, may be invested in the next 12 month or 18 month period, does not have any hope of relief whatever from this taxation on building materials and production machinery; that not even the provinces and municipalities which are endeavouring to provide the energy with which secondary industry can be developed, sustained and increased, can expect sympathetic consideration or relief from the additional capital cost that will be imposed by this tax? If this is the case, this bill, if it is passed must mean that we are going to strangle or at least diminish the benefits to be derived from industrial expansion both public and private from this time forward. Are these to be the consequences of the bill?
We have heard a great deal of discussion about exemptions to be provided for agriculture, the fishing industry and other industries. Coming from an agricultural riding as I do, I do not for a moment attempt to diminish the importance of the criticisms that have been made or the attempts to secure exemptions for agricultural machinery and other items that are covered. But now we are dealing with something that goes far deeper and has a far wider application. This bill, if passed in its present form, attacks the very foundation of industrial development in Canada; it attacks the root of energy; it attacks the very basis upon which industry can be built; it attacks the power upon which industry will depend. I say this because if you consider a development as large as the Columbia development is believed to be, if the present difficulties between the federal and provincial authorities can be reconciled and if that development goes ahead in the treaty projects alone, something like $400 million will be spent. If the total river can be developed it will be $1,300 million. If you add 11 per cent to that you are adding $110 million or $125 million to the cost of the project; and if you amortize that at even as little as 4 per cent or 3J per cent over a 20, 30 or 40 year loan period you are perhaps making it impossible to continue to even contemplate the development of that resource. This is the possible consequence of the bill before us.
Hon. members across the floor can smile and make remarks to one another as they are doing at the moment. But let them come into British Columbia and talk to the people there about 28902-5-1794
Excise Tax Act
developments of this size; let them go abroad in any province in this country and talk to the people who are depending upon that kind of development; let them have a look at the development of national resources which are now having imposed upon them an additional cost of 11 per cent, and then let them smile, because the people will not comprehend or understand their attitude.


Some hon. Members:: Hear, hear.


Stuart A. Fleming: Mr. Chairman, I do not wish to inject a note of political partisanship into this debate. I am only concerned at this moment that perhaps not sufficient attention has been paid to the implications of the implementation of this bill. What do you do to the cost of the kilowatt hour; what do you do to the cost of a kilowatt of power of the Columbia river development if you add 4 per cent, 8 per cent or 11 per cent to the capital development cost of the project? What do you add to the kilowatt hour cost of the energy if you add this capital expense, and project that expense over the period of time the loans that are necessary to develop the river have to be amortized? These are matters about which I am concerned. I am only interested in whether by implementing this bill and making it an act we may inadvertently-because I do not think the government would do this deliberately-stop or remove from all possible consideration the development of these major river systems which remain in Canada to be developed, which remain in British Columbia particularly to be developed, because there are many river systems and many possibilities of development. But if the government is going to add 11 per cent to the capital cost, what happens to the unit cost of the energy that is developed from it?


Mr. McBain:: Mr. Chairman, I wish to come back from British Columbia to Ontario. My question concerns farm wagons, including four-wheeled farm wagons equipped to be tractor drawn. This question is relative to the southwestern Ontario area where the farmers use anhydrous ammonia in the production of corn. I might explain that anhydrous ammonia is a liquid fertilizer which is applied by an applicator and has to be stored in storage tanks. These tanks are put on the farm wagons that I understand come in duty free. The tanks remain on these wagons probably for the life of the tank and the life of the wagon. They are used for agricultural purposes only, but they are subject to the excise tax. I wish to ask the minister whether consideration will be given to allowing these tanks used by the farmers of the southwestern Ontario area for the application of anhydrous

Excise Tax Act
ammonia to be imported duty free? I might mention that very few are manufactured in Canada and they necessarily have to be imported from the United States.


Walter Lockhart Gordon: As far as I know, Mr. Chairman, there have been no representations of any kind about the particular tank to which the hon. member has just referred.


The Deputy Chairman:: Shall clause 6
carry?


[Stage Direction]
Clause agreed to.
On clause 7-Application and coming into force.
Walter Lockhart Gordon: Mr. Chairman, my colleague the Minister of National Revenue would like to move a technical amendment on this clause which has to do with renumbering.


John Richard Garland: Mr. Chairman, I move:
That Bill No. C-90, to amend the Excise Tax Act, be amended by striking out line 44 on page 9 thereof and substituting therefor the following:
"(2) Subject to subsection (3), section 1 and sections 3 to 7".


Walter Lockhart Gordon: It is just a difference in numbering.
TU.	rUoii-man. QVtoll fVlCt fllTlPn^.
* **v	"''r***!	

 

 

 

ment carry?


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 8-"Designated goods" defined.
Edward Nasserden: Mr. Chairman, clause 8 (1) (c) refers to:
-goods for use as part of sewerage and drainage systems, and articles and materials to be used exclusively in the manufacture thereof.
I imagine that at the present time quite a lot of revenue is secured from this item, but I should like to point out that there are many people who are trying to make improvements in the plumbing in their homes, particularly in rural areas, where the cost is already considerably higher than it might be in urban areas where houses are located closer together. Has the minister given any consideration to any alleviation of this tax with regard to the situation in rural areas, where a group is working together on a co-operative basis?


Walter Lockhart Gordon: Mr. Chairman, I went into this at some length this afternoon at the same time as I dealt with another matter, sending a memorandum over to the hon. gentleman concerned. I went into this subject at the same time.


Thomas Clement (Tommy) Douglas: Has the minister made a statement about the matter I raised earlier concerning mobile homes and trailers? I believe he was giving some thought to it.
[Mr. McBain.l


Walter Lockhart Gordon: Mr. Chairman, this was one of the items covered under clause 6, which for some reason was not raised at the time when we reached that clause, but perhaps I might be permitted to give the explanation.
Before 1957 trailers of all kinds were subject to sales tax on their full selling price, but in March 1957 an exemption was introduced for 75 per cent of the selling price or the duty paid value of trailers for use as homes. It is believed that parliament did not provide this exemption for 100 per cent of the selling price because trailers are different from houses and because some building materials and appliances entering into the construction of trailers would not have been exempt from tax if used in the construction of a house. Now that building materials used in house construction are to be taxed, trailers for use as homes should also be taxed.
It is recognized, however, that the selling price of these trailers includes a considerable amount of labour, and therefore taxing the full selling price would tax trailers for use as homes more heavily than houses. On the other hand, trailers for use as homes require in their construction a larger taxable content
At__ 1_______ +U/\ir llpiiollw OOTI _
til Cl 11 11UUOCO. AT V^A	

tain stoves, refrigerators and built-in furniture and furnishings, and they require wheels and tires. The application of the tax to 75 per cent of the selling price is believed to be a reasonable level of taxation for these manufactured mobile units which provide a special kind of living accommodation. This exemption for trailers for use as homes does not apply to camping equipment, such as units to be placed on trucks or trailers which are merely converted into overnight shelters. Manufacturers of trailers will, of course, buy their materials free of sales tax, but they will pay sales tax on 75 per cent of the selling price.


Thomas Clement (Tommy) Douglas: Does that equally apply to mobile homes, the homes which are moved on foundations?


Walter Lockhart Gordon: This just applies to trailers
Clause 8 agreed to.
On clause 9-Refund of tax.
(Translation):


Paul Raymond Martineau: Mr. Chairman, as for
clause 9(1) (b) (ii), this is a case where a tender in writing would have been submitted by a contractor before June 13, or before the budget, but which would not have been accepted by that date.
According to the bill, if the tender contained a pecuniary penalty or provided for the forfeiture of a deposit sent with the tender in the case the contractor withdrew his

tender before it were accepted, instead of withdrawing the tender, the contractor could leave it as submitted. Then, he would have been able to take advantage of this tax exemption.
Now, in my opinion, the words after the word "contract" in line 14 are restrictive and of such a nature as to cause a real injustice to the contractor. I mean the words:
-and in default of so doing to incur or cause to be incurred a pecuniary penalty whether by forfeiture of a security deposit or otherwise.
Apparently, the minister's position has been that a tender did not really constitute a contract and therefore that the party sending in a tender could withdraw without any penalty except in cases where a penalty clause had been written in the contract and except, in addition, where the tender called for the forfeiture of the deposit in case of withdrawal of the tender before acceptation.
Now in my opinion, such an interpretation is not in accordance with current practices in the building industry.
As a matter of fact, Mr. Chairman, deposits are usually required or this pecuniary penalty clause is written only in the case of companies whose solvency or reputation has not been satisfactorily established. In the case of a recognized contractor, such a clause is generally not required.
Second, that section counters the existing rules with regard to contracts in the province of Ontario.
And third, in respect of the province of Quebec, such a restrictive interpretation is,
I think, contrary to the economy of the civil code, in connection with contract obligations and, more particularly, to sections 984 and 1079 of that code.
Indeed, under section 984, a contract is perfected by the parties' consent; section 1079, which concerns conditional clauses and obligations, reads as follows:
-an obligation is conditional when it is made to depend upon an event future and uncertain, either by suspending it until the event happens, or by dissolving it accordingly as the event does or does not happen.
Now, when interpreting section 1079, I submit that here we are facing a contract with suspensive effect, and authorities have commented on that section as well as the legal aspect of a tender.
I am more particularly thinking of Castel who, in his treatise on the civil law system, explains the difference between a simple pollicitation and an offer which cannot be withdrawn once it has been made, until expiry of the period of time provided in the offer.
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Indeed, the learned author tells us that, in such a case, there is much more to it than a simple pollicitation and that there is a contract divided into two parts, the first of which represents the contract itself, or the tender, and the other the pre-contract, which constitutes a binding agreement by the party submitting the tender, from which he cannot withdraw without being liable to damages.
In view of those authorities, in view of the well established practice, as recognized in the province of Ontario, in view of the economy of the civil code, I think that those who tendered before June 13 last, but whose tender had been neither accepted nor rejected before June 13, are in a position where they cannot claim a refund of that tax. I thinir that if the minister does not grant them that exemption, they will suffer a real prejudice.
I know that there are here, in front of me, legal authorities of great competence and great renown. I refer particularly to my friend the Minister of Citizenship and Immigration (Mr. Favreau) whose legal and constitutional authority is recognized. I am sure he will agree entirely with my observations and that he will recommend to the Minister of Finance to accept the amendment I wish to move.
I therefore move, seconded by the hon. member for Berthier-Maskinonge-Delanau-diere (Mr. Paul), that section 9, subsection (1), subparagraph (b) (ii) be amended by striking out the words:
and in default of so doing to incur or cause to be incurred a pecuniary penalty whether by forfeiture of a security deposit or otherwise.
which appear immediately after the word "contract" on line 14 of page 11 of the said bill.
I have no doubt that after seeing the amendment, the minister will be willing to accept it.
(Text):


Walter Lockhart Gordon: I think the hon. member was, perhaps, paraphrasing a brief which has been circulated recently by the Canadian Construction Association and a letter to the Canadian Construction Association from Messrs. Stike-man and Elliott solicitors, Montreal. The Canadian Construction Association has, I expect, made representations to all members of the house. Certainly, they have made representations to the government about this particular item and about a number of other items that are being proposed.
I suppose that whenever any new tax is introduced the people affected find it burdensome. I believe that in this particular case the construction industry will find that this is an added cost, which no doubt in most cases they will be able to pass on to their

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customers in the same way as they pass on other additions to their costs which they face from time to time. I would point out that it is customary, when a new tax is imposed on commodities, to apply it to goods sold after a certain date. The general rule for federal sales and excise tax changes is to have the new tax apply with respect to sales made, or goods cleared through customs, after midnight of the day on which the budget speech is delivered. In this way all persons are treated alike.
In the case of this year's tax changes, the sales tax on building materials and production machinery is intended to apply on and after June 14. In accordance with the usual rule it was not intended that the fact that goods had been ordered or prices quoted before June 14 would affect the imposition of the tax on goods sold after budget date.
It was recognized, however, that some manufacturers and some contractors would be caught in a very difficult position because of the imposition of the tax on all sales after June 13. If a manufacturer who was required to pay tax on goods sold by him after budget date was also required to sell those goods under the terms of an enforceable contract at a price which did not include the tax he might suffer a severe loss.
Similarly, a building contractor who was required to construct a building at a fixed price under an enforceable contract would find the price of his materials increased by the amount of the sales tax and because of this squeeze might be placed in a difficult financial position.
The government recognized these facts and the budget speech promised relief for those who were bound by fixed price contracts entered into on or before budget date. It should be noted that the purpose of this relief was not primarily to protect the eventual purchaser of goods. If the purchaser has a fixed price contract he is already protected. The purpose was to help the person caught between the tax and a commitment to supply goods at a price which did not permit addition of the tax.
In determining under what kinds of fixed price contract relief should be granted, consideration had to be given to the difficulties of ascertaining what were legally binding situations from which the vendor or contractor could not escape without having to absorb the tax himself or suffer some pecuniary penalty.
It became evident that bona fide contracts in writing signed by both parties prior to the budget date were capable of being both ascertained and verified. The same could be said of tenders made in writing prior to June

13 whereby the person submitting the tender was bound to enter into a contract and in default of doing so, would incur a pecuniary penalty, whether by forfeiture of a security deposit or otherwise.
It was realized when the line was drawn to include only these two types of formal contractual obligations that there would be a number of closely related or borderline cases where the commitments lacked the contractual characteristics of those just mentioned. For example, the government has been urged to accept as grounds for relief contracts which have arisen out of offers, or tenders made orally, and contracts which have arisen out of tenders not binding in the sense that the person making the tender would suffer a pecuniary loss if he did not proceed to sign a contract. It has also been asked to grant relief in respect of contracts with a guaranteed upset or maximum price, cost plus contracts and contracts related to leased property. All these requests have been examined carefully but it has been concluded that it would be unfair and unmanageable to base tax relief on any contracts other than those concluded in writing before June 14 or those concluded after that date in accordance witn the terms of a tender in writing which committed the person who submitted the tender to a pecuniary penalty if he failed to stand by his bid. Such contracts may include certain upset or maximum price contracts that have the elements of a fixed price contract, but would not include cost plus or percentage fee contracts.
To go beyond what I have indicated would open the door to claims in respect of a wide range of transactions where the manufacturer, contractor or supplier is not prevented from passing on the tax to the purchaser or user of the goods in question.
Although it is realized that this may not be an entirely satisfactory solution, particularly for those firms who conduct their affairs in a more informal manner and do not always put commitments down in a written con-tractural form, it must also be accepted by those who have given this matter careful thought that it would be administratively impossible to do other than rely on independent documentary evidence.
The fact that many people had made plans or had entered into arrangements which have not the necessary legal formalities to qualify for relief was an important consideration in the decision to introduce the tax in stages commencing at 4 per cent. This provides an important measure of tax relief for all concerned.


Paul Raymond Martineau: May I ask the minister another question? In view of his remarks, I

wonder whether he believes that a tender can in no case have a binding effect until it has been accepted?


Walter Lockhart Gordon: Certainly, and that is what I said-I did not quite get the implication of the question.


Paul Raymond Martineau: In view of the minister's remarks, is it to be concluded that a tender cannot in any event be an enforceable document?


Walter Lockhart Gordon: I am not prepared to give a legal opinion in this matter.


Paul Raymond Martineau: I understand that the minister is not a lawyer but we do have a battery of very learned lawyers sitting on the front benches opposite and I think they should be prepared to defend this clause of the bill which the minister has admitted is a very important one. He has stated he has received representations from the Canadian construction association representing the Canadian construction industry, and there is a very important point involved. There is real hardship incurred by those who have made tenders and who may not, according to good business practice and even according to the law withdraw from that tender until the expiry of the acceptance date without incurring a penalty even if there is no penalty clause inscribed in the tender; because even without such a penalty clause the person to whom the tender is made has recourse in damages if the tender is withdrawn under certain circumstances.


Horace Andrew (Bud) Olson: Mr. Chairman, under the provisions of clause 9 I think there is a need, with or without the amendment, for a great deal of clarification and explanation by the minister and the officials of his department. I am not demanding an explanation tonight but I think the provisions should become a matter of general public knowledge so that municipalities and contractors all across Canada will know what the situation is. For example, will a limit imposed by a bylaw of a municipality be considered as confining the amount of money and therefore imposing a limit within which the contractor must remain to claim the sales tax exemption, if the bylaw has been passed before June 13?
I know that in the bill there are many provisions exempting the materials that municipalities buy for sewer systems, and that materials for schools, which are the responsibility of local government, are also exempt. But there are occasions when municipalities undertake to build civic centres and there may be some that have been approved recently. There are municipalities that undertake to erect sports stadiums, swimming pools
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and so on, and I think it is essential for this information to be known.


Paul Raymond Martineau: On a point of order, Mr. Chairman, I am sorry to interrupt the hon. member but before he goes on with what he is discussing I think we should restrict the discussion until the amendment has been disposed of.


Lucien Lamoureux: If the hon. member wishes to speak to the amendment I would invite him to do so.


Horace Andrew (Bud) Olson: I am not exactly sure, Mr. Chairman. We have not been supplied with the amendment. I do not have one in the English language and I have a little difficulty in translating it. But I think the remarks I am about to make apply to the amendment as well. I have reference to the staging of the sales tax that is going to be imposed at different levels. Clause 9, without the amendment and perhaps with the amendment, takes into account the deadline date of June 13. There can be some exemptions made and the penalties will not apply if there was a firm contract prior to that date.
But I think that the construction industry must know the exact situation. For example, let us say that between June 13, 1963 and March 31, 1964 contractors enter into contracts but do not expect to buy all of their materials in that period. Do they have to estimate their costs upon the basis of 4 per cent for the amount that will be purchased during that period, 8 per cent for the amount of building materials purchased between March 31, 1964 and December 31, 1964 and 11 per cent for those building materials that will be purchased after December, 1964? As I said, I do not expect the minister to explain all of this tonight, but the information is essential to the construction industry so that they will know what figures to use in estimating their costs for tendering.


Walter Lockhart Gordon: I am glad to have that suggestion and I will most certainly take it up with the Minister of National Revenue. I agree that this matter should be made perfectly clear to all the people who will be affected.


Lucien Lamoureux: The hon. member for Edmonton West.


Norman Platt Lambert: Mr. Chairman, I will speak after you have dealt with the question raised by the hon. member for Pontiac-Temisca-mingue and with his amendment.


Guy Favreau: May I be allowed to put a question to the hon. member? Is his amendment directed expressly at the case where a tender, not containing a provision for a specific penalty or forfeiture but being otherwise binding either because there is a fixed

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period set or because it has been accepted after June 13, has the effect of a contract, all the provisions whereof have been specified before June 13? It that it?


Paul Raymond Martineau: That is right.
(Translation):


Rémi Paul: I have listened carefully to the comments of the Minister of Finance (Mr. Gordon) who has certainly examined the brief submitted by the Canadian construction association, but in my opinion, the minister has taken a position contrary to the spirit of the Quebec civil law. There is in civil law, what is called pollicitation; now legal consent is the expression of agreement on an object or a cause and as long as the agreement has not been worked out, there are only parties in pollicitation.
I know that the hon. member for Quebec South (Mr. Cantin) will try later on to refute this legal point, but I maintain that as long as the parties have not reached an agreement, there is no contract; but however, the parties
ar<" hound hy this pollicitation and such is the case with which we are now dealing.
The Minister of Finance, in his mathematical and accounting statement, was in disagreement with the spirit of the civil law of the province of Quebec, and the effect of the amendment moved by the hon. member for Pontiac-Temiscamingue (Mr. Martineau) is exactly to legalize the statute law of our Canadian courts concerning pollicitation.
It actually happens that contractors submit a tender, discussions are held and the coming into effect of the contract is delayed, while the parties are still bound by pollicitation. Now, this contract comes into effect when the parties have made up their minds, and even though one of the parties withdraws his consent, the party responsible is liable to a claim for damages and the courts in the province of Quebec have recognized the validity of such a contract.
I know that the Minister of Citizenship and Immigration (Mr. Favreau), as well as the hon. member for Quebec South (Mr. Cantin), are familiar with the Sanschagrin case which is referred to in the 1928 summary of jurisprudence. It was in the case Renfrew Flour Mills v. Sanschagrin that the courts recognized the existence of a contract with pollicitation.
By virtue of this jurisprudence which has never been changed since, neither by the appeal court nor by the supreme court, we

are therefore in the existing legal situation in the province of Quebec. The minister, in trying to give a strict interpretation of the law, by establishing other limits for the refund of this tax, is thereby rendering useless and inoperative that provision in our civil law and consequently, the minister interprets a provision of our civil code which contradicts the opinion of the judges of the supreme court and of the court of appeal of the province of Quebec.
This interpretation will cause serious prejudice to those having contracted by pollicitation. Now, the effect of the amendment proposed by the hon. member for Pontiac-Temiscamingue is precisely to invite the minister to recognize the existence of a contract, notwithstanding the fact that it was not a written one, because under the provisions of the code, that contract exists and is binding upon the parties, although a clause may be suspensive, inoperative or expired. If the minister wants to give a restrictive interpretation of that provision of the civil code of the province of Quebec, I am of the opinion iiiai he is doing irreparable wrong io the numerous contractors. And I understand that the minister in his remarks a while ago, has mentioned the justifiable reaction of those who are affected by a tax. That is normal.
In this case, it is much more than a reaction to the economy; the point is to give a constitutional interpretation to existing legislation in the province of Quebec.
The civil code is recognized in the province of Quebec where it has force of law. I do not see why the minister would not accept the proposed amendment, which is entirely in order as, in my humble opinion, it is a matter of clarifying an existing situation and of giving legal interpretation to a clause which, as it now stands, cannot in any way affect the balance of ways and means.
I am sure that the Minister of Citizenship and Immigration will be able to give us his views on this vital constitutional question since it compels, as it were, the minister to give a legal interpretation other than the one found in the majority of the provinces under common law, which is greatly different from the exacting provisions of our civil code.
That is why we are asking, on behalf of the population of the province of Quebec, not a preferential treatment but the recognition of an existing legal provision, sanctioned by our courts and which, if it were rejected,

could mean, for many contractors, hardships which, in my opinion, would not happen in the other provinces, because, as far as I know, they do not have that pollicitation provision.
That is why we are confident that the legal experts from the province of Quebec, our hon. friends opposite, will support the remarks made by the hon. member for Pontiac-Temiscamingue, so that the proposed amendment be accepted, for it is in conformity with the civil code and the standing orders of the house.
(Text):


Paul Raymond Martineau: Speaking again to the amendment, I should like to refer to some remarks made by the Minister of Finance a few minutes ago. I believe he was under the impression that the amendment would create undue administrative difficulties for the officials. Possibly he was under the impression that the passage of this amendment would mean, as he said, that verbal tenders would come within this provision or people who did business in a less formal way could use this provision as a loophole to claim exemption.
I would point out to the minister that such is not the purpose of the amendment. It would only apply to written contracts evidenced by a binding tender, and therefore the officials would have no difficulty in establishing the contract was made before June 13 because they would have written proof of that contract.


Guy Favreau: I do not intend to offer a legal opinion to this house because that is not my business, especially since becoming a minister I have relinquished the practice of law and my opinion now might not be as good as it was when I was practising law. However, I believe it is my duty to discuss the point raised by the hon. member from the standpoint of an individual citizen who looks at this act.
I agree with the hon. member for Pontiac-Temiscamingue that there might be cases not covered by the clause as it is presently drafted. It is true that in Quebec there are tenders which contain a period for their acceptance and the condition that they be not changed subsequently, which is fully binding on the tenderer. If these tenders were made before June 13 then there might be some difficulty if a contract is afterwards signed.
However, I have some misgivings about the type of amendment proposed, which consists simply of deleting all the words in clause 9 (b) (ii) after the word "contract". I think there should be some notion conveyed in the amendment that the tender, if it does not contain a forfeiture or penalty clause, should 28902-5-180
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be such that if accepted it binds the tenderer, and if he did not carry it out he would incur some kind of pecuniary consequences by way of damages or otherwise.
My feeling is that the clause is now too limited in that it is restricted to those particular tenders which actually contain a penalty clause. I do not want to move an amendment, but this is what I suggest if I were to submit one. I would delete lines 14, 15, 16, and 17 in the subclause and make it read like this:
-into such a contract and in default of so doing may incur a pecuniary penalty, forfeiture of a security deposit, damages or other pecuniary consequences.
This I think refers to any type of a tender. In other words, it is a bona fide tender from which the tenderer may not back track.


Paul Raymond Martineau: So far as I am concerned I would be willing to modify my amendment to conform with the wording suggested by the minister. I think that wording would serve the purpose of the original amendment, and would ensure that anyone who had submitted a tender, from which he could not withdraw even though it is not an express provision in the tender, without involving some penalty or damages, would have his claim for refund or exemption of tax recognized.


Norman Platt Lambert: I am wondering if the minister went a little too far in his suggestion regarding pecuniary consequences. I do not think anybody can show what these are. Would he consider this-and in default of so doing to incur specified or unspecified damages either by forfeiture of security deposit or otherwise?


Mr. Macdonald:: Does the hon. member think the ejusdem generis rule would apply?


Norman Platt Lambert: I think specified and unspecified damages could get into these pecuniary consequences.


Guy Favreau: Then you only have to say "secure specified or unspecified damages so long as they are real pecuniary consequences."


Donald Stovel Macdonald: My understanding of the law is that a penalty as such is distinguished from damages as awarded by a court. A penalty is something which may be awarded irrespective of damages suffered by either party.


Norman Platt Lambert: I take it that the amendment has been withdrawn.


Lucien Lamoureux: I have to wait for the hon. member to advise me whether he is forcing his amendment or not, but I understand he

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is awaiting advice from the Minister of Cit- Mr. Mariineau: Mr. Chairman, I certainly izenship and Immigration before he reaches would go along with the proposal made by the his decision.	Secretary of State.


Paul Raymond Martineau: That is not exactly correct. I am waiting for the draft he made to make sure I have taken it down properly.


Lionel Chevrier: I think the proper procedure is for the hon. gentleman to withdraw his amendment and, having withdrawn it, if the minister wants to make a proposal it is up to him; but there cannot be two amendments before the Chair.


Paul Raymond Martineau: If what the minister has said is correct, he was not going to propose an amendment. He read it very slowly but I have not got all the words. If he has a draft I will replace the one already before the committee with the one that has been suggested.


Horace Andrew (Bud) Olson: While they are preparing this new amendment, if I may call it that, I am not sure I understand all of the implications here. But, if it is the intention of a new amendment to open up the field and have the government responsible to pay a refund in the wide open field of general damages that could be ordered by a court, then 1 think some caution should be exercised.


Lionel Chevrier: May I suggest that this clause stand for the time being so that we would have an opportunity of considering it between now and tomorrow.


Paul Raymond Martineau: If the minister has not finished his draft, then I am willing to propose a substitute amendment which would correspond roughly to what the minister implied would be acceptable. Subject to these observations I therefore withdraw the amendment already moved, and propose an amendment in these words-


Lucien Lamoureux: Has the hon. member the unanimous consent of the committee to withdraw his amendment?


Some hon. Members:: Agreed.
Amendment (Mr. Martineau) withdrawn.


John Whitney Pickersgill: In order to make sure that we have a draft which means what we really want, the government feels it would be desirable to have professional advice, and I wonder if the committee could not rise-


Louis-Joseph Pigeon: Experts.


John Whitney Pickersgill: Professional advice is what I said. I wonder if the committee could not rise now and report progress on the understanding that the rest of the work of the committee is completed, except consideration of this clause and the amendment thereto.
[The Chairman.]


Some hon. Members:: Agreed.


Norman Platt Lambert: Mr. Chairman, I have a question that is not related to this particular amendment. It is a question for information which the minister might be able to give us. The other day we were discussing the matter of goods ordered prior to June 13 which could not be delivered, and what was to be the criterion if they had been bought under a conditional sale agreement. I remember the minister said, "Well, I suppose the crucial date, or the limitation date would be when property passes". I was wondering whether he has taken this point into consideration. I have tried to spell it out. I think the clause does cover it but I would like to have that assurance, because if December 31, 1964 is the operative date for property passing, this would mean no machinery or heavy equipment would be covered if it had been purchased under a conditional sale contract the terms of which extended beyond a period of 18 months. This is the matter I would like tn guard against- because we know there are many instances of production machinery being purchased under contracts which provide that payment may be spread over a period of four or five years. This is the point upon which I seek assurance from the minister, that these goods will not be caught by reason of the fact that property does not pass, under the conditional sale agreement, if payment is completed after 18 months.


Walter Lockhart Gordon: Mr. Chairman, I am afraid the goods in question would be caught.


Norman Platt Lambert: In other words, the long term payment machinery is caught; the medium term payment machinery is not caught. Well, I think we should rise and report progress, Mr. Chairman. The answer the minister has given calls for more discussion.


John Whitney Pickersgill: Mr. Chairman, I move that the committee rise and report progress and ask-


Lucien Lamoureux: Order. Before we take the motion perhaps I should bring to the attention of the committee that one point has not yet been disposed of. I am referring to that part of the amendment to clause 1 dealing with the renumbering of the original clauses in the bill. This point was left standing to facilitate the work of the committee. Therefore I would suggest that the committee could now agree to that part of the amendment which had been set aside and left standing earlier today. Is that agreed?


Some hon. Members:: Agreed.
Progress reported.


John Whitney Pickersgill: Mr. Speaker, I wonder whether in view of the fact that all of us, I think, would like if at all possible to complete the work of this part of the session in the current week, the house would consider sitting for another half hour and making a start on the committee stage of the economic council bill. We might at least dispose of clause 1, the more general part of the bill, and make some progress toward the conclusion that I think all of us want to achieve.


Mr. Deputy Speaker:: Is that agreed?


Some hon. Members:: Agreed.



ECONOMIC COUNCIL OF CANADA


[Stage Direction]
The house resumed from Wednesday, July 17, consideration in committee of Bill No. C-72, to provide for the establishment of an economic council of Canada-Mr. Lamon-tagne-Mr. Lamoureux in the chair.
On clause 1-Short title.
Mr. Churchill:: Mr. Chairman, in our desire to co-operate the house from time to time gets taken by surprise, as we did just before six o'clock by a switch of business. We are now on the economic council bill which was last discussed on July 17, when the second reading stage was concluded; then we went into committee on the bill and rose after standing clause 1. My purpose in speaking now is to provide hon. members with a chance to locate the bill with which we are dealing, and if they refer back to Hansard of July 17 they will see what was going on at that particular period.
The economic council of Canada proposal, of course, is very much what we proposed last session and were close to having accepted, but there was an unnecessarily prolonged debate on that bill although members on the other side of the house were in agreement with the proposition. Had the normal course been followed the bill would have been on the statute books last winter and would have been in effect. We are not following that practice this session; we are giving an example of a much more responsible opposition than the one which faced us last winter.


Mr. Pepin:: Politics.


Gordon Minto Churchill: Somebody says "politics", as if that is not our lifeblood in this chamber. Is there something wrong with politics? I think there is something good about politics.
28902-5-180J
Economic Council of Canada Part of the practice of politics is to accept responsibility whether you are on the government or the opposition side. That was the point I was making. Last session I was not impressed with the attitude of the opposition.
The bill we have before us has adopted our proposal, with some modifications which do not necessarily improve the bill. The name has been changed around and a few other matters have been dealt with, put the general purpose, as I see it, is pretty much what we had in mind when we first put the proposition before the House of Commons. We may want to examine the bill as we go through it now to see whether unnecessary additions have been made to some of its clauses. Our hope when we introduced this measure was that the economic progress of Canada would be benefited by setting up a council which would advise the government of the day as to progress that might be made in various sections of our country, and assistance that might be given in order to improve economic conditions. There is a very wide field of activity essential here, and this council, I presume, would be of very considerable assistance to other departments of government, particularly to the Department of Industry which was recently established. In fact, the danger may be that there will be overlapping of functions and duplication of tasks with a Department of Industry and an economic council; but only time will tell whether or not that will happen, and we will have to hope that the good sense of the government will be in evidence and that overlapping will not occur.
My introductory remarks, Mr. Chairman, have served, I think, to let the committee find its place with regard to this bill and give consideration to a matter which is of very considerable importance. We are taking the position that the economic council of Canada should be supported, and we may have certain suggestions to make as we work our way through the bill clause by clause.


Gordon Harvey Aiken: Mr. Chairman, when we were discussing the second reading of this bill I put some questions to the minister which I do not believe were answered. Perhaps he would permit me to put them again in general terms. On second reading of the bill I said that we felt the bill was a combination of a piece of legislation which is already on the books and the proposed bill that the government introduced last year in connection with the establishment of a board. What I said at the time was that the only difference between the two pieces of legislation which the Conservative government had brought forward and this piece of legislation was in the objects of the bill, mostly as set out in clauses 9 and

Economic Council of Canada 10. I said then that our great fear was, in view of what the minister had said as to the theoretical approach that might be taken to this legislation, that the ideas of planning might be more compulsive than necessary, and that we should like to have some assurance from the minister that, while the bill was very broad in its terms, caution would be observed in proceeding with it. I said at the time that what we feared most was a proliferation of government forms to be filled out by both small and private business; more and more interference with private business, especially small businesses.
Before proceeding further, perhaps the minister at this point would give us some assurance that so far as possible the bill will not be an excuse for an advanced series of planning measures requiring the co-operation of business in making more returns and more investigations into their business; in suggesting things that they ought to do without the consent of such businesses. I should like to place this before the minister now. We feel that planning has its place, and a very important place, in the business world; but we also feel that at this time, when business is making an effort to recover and to produce more and obtain access io export markets we should not unduly burden it with nonproductive work or the proliferation of office work. I feel that to a large extent business wants to be left alone, and that the planning involved in this measure should proceed with as little interference with production as possible.
These are the points I asked the minister to clarify for us. I might say that some of us on this side of the house feel that the minister perhaps moves a little too fast, or is moving a little too fast, in his ideas, and that he may he more theoretical in his approach than practical-ana i do not say that unkindly. But our tear is that he may bring into this bill a series of planning measures that will not be useful at this particular time in our economic progress. If the minister would like to comment on this matter I would appreciate it.


Maurice Lamontagne: Well, Mr. Chairman, my comment will be very brief. I can assure the hon. member that the council is not designed to interfere with small business and that it has no compulsory powers, so that the kind of interference the hon. member may fear will not I am sure become a reality. (Translation):


Paul Raymond Martineau: Mr. Chairman, the other day, the minister presented his bill and, needless to say, took that opportunity to make an authoritative speech which has some fine points, I will admit. But I was surprised to hear him say that the measure meant the setting up of a planned system in Canada. In


other words, under this bill, the country Is subjected to planning. Consequently, I ask the minister to give us more details and, in particular, to let us know in a few well chosen words-he is very good at it-the elements of planning he is considering for Canada. He should not limit himself to generalities and tell us that it is a kind of planning meant to stimulate, to indicate, in short, that is not binding. He should give us the details, the elements of that plan, because I believe that the members of the committee want to know what it is.


Norman Platt Lambert: Mr. Chairman, I just want to say that I thought the remarks of the President of the Privy Council (Mr. Lamontagne) most interesting, more particularly in view of the Leader of the Opposition (Mr. Diefen-baker) inviting him the other night to give us a fuller explanation of the philosophy on which the government has based its planning.
And, with regard to this matter, I wonder if the hon. member for Parry Sound-Muskoka (Mr. Aiken) and the hon. member for Pontiac-Temiscamingue (Mr. Martineau) recall certain words of the minister. I apologize, Mr. Chairman, for a slight impingement on the rules by quoting certain words which the minister used when discussing the motion for second reading. According to page 2087 of Hansard, he said:
To overcome our present difficulties, we need new policies, applied in a new spirit and within new administrative structures. In other words, we need a plan so that the various aspects of the economic policy will be well co-ordinated and so that the private sector can work in the same direction as the government towards the common objective of harmonious growth.
Mr. Chairman, I think that those fine words aim at full planning, and that this is only an effort on the part of the minister to tell us that the aim and philosophy of the economic council are complete planning in the public or private sectors.
I believe no one could infer anything else from these remarks.
(Text):
I was also referring to certain statements made by the minister the other day. There was some indication he felt the private sector of the economy had been deficient. We wonder how he felt we might be able to cure these so-called economic ills which, he says, came about because of stagnation in the private sector. Is there to be an artificial stimulation of the private sector or is it through the stimulation of the public sector

that we hope to bring about a reinvigoration of the economy? Is it perhaps, by a combination of both? I think the answers to these points would be most constructive and it is most important we should get some clarification with regard to this. In the light of some of the philosophy which has permeated the Liberal party in the last couple of years and which has been evident in the speeches of Liberal party spokesmen old and new, but chiefly new, it seems we are entering upon an era of the planned economy. This is something I want to know: are we to have planning and, if we are to have planning, how is the government to guarantee the efficacy of the planning unless there is an effective degree of control? I am sure all hon. members will agree that controls breed controls, and if there is anything which is debilitating to the economy it is control and supercontrol. These are matters in which both businessmen and private individuals are deeply concerned. They are concerned at the direction which policies have tended to take and they have been interested in certain legislation which has been proposed, including provision for an economic council. I think we could perhaps have some light thrown by the minister on the future of this council.


Stuart A. Fleming: While it is true that we in the opposition may have reservations about certain particulars in this bill, while we may feel there are provisions contained in it which are not sufficiently precise and which do not indicate how far the government is prepared to go in implementing the recommendations of the economic council, I think we are nevertheless encouraged by the fact that the government is prepared to create an economic council for Canada.
If the policies of the last two months to which we have been exposed in this house are any indication of the government's ability to govern this country in the absence of advice, then we look forward to the creation of a council which may provide hon. gentlemen opposite with an opportunity to accept advice enabling them to avoid some of the errors of the past ten weeks or so. We have in the course of this very evening considered certain government policies whose implementation can only have the effect of diminishing growth and retarding progress. In this bill, on the other hand, we find that if this economic council is created as outlined it will be entrusted with responsibility for advising, recommending, studying, exploring, encouraging, fostering, promoting and so on. All these tasks are being given to the council to do so as to encourage the government to find out what its responsibility is to the people of
Economic Council of Canada Canada and to the growth of the Canadian economy. On the face of the performance of the government since this session began this is essential because when one considers that as a consequence of policies so far announced it is conceivable that major developments in the province of British Columbia and, by projection, in other provinces throughout Canada could be retarded, it becomes clear that this government requires the assistance of recommendations, inquiries and so on by qualified people.
We do not know, of course, at this moment who the government intends to appoint to provide this assistance and advice. In order to know how effective this economic council may be, we shall have to be given some idea of the people who are to provide this advice to the government, and what their qualifications are. At the moment it is probably incumbent on us to be reasonably hopeful-to be encouraged by the fact that the government has taken up an idea from the former administration and is prepared to create a council to advise, to encourage, to promote and to study. We shall not argue with these objectives. At the same time we might ask: will the government pay any attention to this advice? On the basis of what we have seen so far, is it to be expected that this council will have any effect on policy? Will it, in fact, be able to persuade the government, on the basis of its studies, that there is a necessity in Canada for a fresh approach to the problems which confront us?
The hon. member for Parry Sound-Mus-koka spoke of the undesirability of imposing on businessmen small or large the necessity of filling out more forms and questionnaires most of which do not seem destined to serve any practical purpose. Most hon. members are aware from their own experience or from the experience of others that in relation to one branch of government alone, the dominion bureau of statistics, a great many merchants and businessmen of one kind or another are required to devote a substantial part of the annual cost of their operations to filling out forms to provide information which apparently it never used or, even after it is assembled for use, is not comprehended. There are a great many businessmen in this country who are sympathetic to the idea of the government acquiring information on which to base policy, which would make it possible for them to thrive and prosper. But when they find that a substantial part of their time is devoted to doing the bookkeeping for the government, resulting in the services

Economic Council of Canada of many of their staff being effectively removed, they tend to question the efficacy of the type of legislation we have before us at this moment.
The idea of an economic council drawing upon the best advice that business and the professions in every phase of our economy can provide is a sound idea, but I think we also need some assurance that if we do draw on this experience, if we do draw upon the competence of qualified men from every segment of the Canadian economy, when they make recommendations they will be heeded, for if they are not this is an exercise in futility. I do not wish to unduly emphasize this, but if we go back to the business that has been under discussion in the house earlier tonight and the business that has been done in the house over the past two months we must realize that the present government has taken advice from no one who understood what policies are essential to the development of the economy of Canada. If they had taken such advice they would surely never have introduced some of the policies, either budgetary or legislative, that have been brought into the house in the last two
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I can only say, Mr. Chairman, that this idea is a good idea in essence. Potentially it is an excellent idea, but if it is only a measure brought in here to keep the people quiet, to make it appear as though something is being done, then the people of Canada are going to be misled and further disillusioned, for I believe there is a great deal of disillusionment in the country now. We must avoid creating another government body whose function is to do nothing but advise and be ignored.
Therefore we will need assurance from the minister that when the council is created, not only will it be given the authority to assemble all of the information, to bring together all of its strength and its resources and the benefit of all its wisdom but that having done that, having evolved ideas that can assist the government in creating policies for the development of Canada, its recommendations -for only the government can take the responsibility for policy-will be heeded, and that the government will not legislate for the country as it has done during the past two months.
(Translation):


Mr. Beaule:: Mr. Chairman, we now have before us Bill C-72, an act to provide for the establishment of an economic council of Canada. I hope that the purpose of this council is not to give rewards to those people who have served the party well, but on the contrary, that it will find solutions to stimulate our economy.
[Mr. Fleming (Okanagan-Eevelstoke) .1
Mr. Chairman, I think that our first task is to restore our own confidence in our country and to decide what part we want to play in this rapidly changing world. Our country still possesses the same tremendous resources and the same people, while offering even greater possibilities than ten years ago, when its reputation was at its best, when we looked at the future with confidence and when the whole world considered us as the country which offered the best hopes and promises.
It is worth while trying to find out why confidence in Canada has declined. The main reason of the present lack of confidence in our country is the fact that we have failed to choose a formal and clear policy in the field of trade. The reason for this concern is of course that Canadians, as most other people, take an intelligent interest in their own financial affairs.
It may be that the reason for this lack of a well-defined economic policy lies in the fact that such a policy requires nowadays
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trade in a rapidly changing world and that those alternatives require necessarily that decisions be taken which might cause discomfort in some fields, in some industries and would inevitably require that sacrifices be made in the interest of the general economy. Many disappointments face the ambitious persons who are not ready to make sacrifices. The true freedom is to make a choice and not simply to have a choice to make.
Mr. Chairman, we can no longer be satisfied with making mere distinctions between primary and secondary industry or between domestic and export industries. They are all interdependent. In most cases, the same company manufactures products to sell in Canada or outside and could not, therefore, without undergoing grave strains argue some day in favour of a freer trade for export products and try the next day to obtain more protection for its Canadian markets. Our industry provides a good example of that situation.
We have an important part to play in our economy. Should we fail to play that part, to take position on the important questions of today, in that case, if things went worse, we should have no one to blame but ourselves if, later on, the decisions made were not to our liking; and even if everything worked out for the best, our national effort

would be weakened by the indecision and the silence of the businessmen. It is imperative that there be some communication between the public and the private sectors but the voice of business on important questions has too often been confused and weak.
Mr. Chairman, the minister said that he wanted a planned economy. The word "planning" nowadays has a strong emotional connotation. It is being used indiscriminately and brings about violent reactions, which are either favourable or unfavourable.
The concept of national economic planning seems to have gained much more with us. But we are still very evasive when it comes to giving an exact definition of what we really mean by economic planning.
Is there one successful company without planning? We must reckon with the human element and individual freedom to decide what should be done to serve a company's best interests. The second prerequisite is to define a company's objectives. A man gives his best when he has been assigned definite objectives, knowing that he is free to attain them on his own initiative.
Both conditions are important. If you set objectives and limit the freedom of the individual trying to attain them, in general, he will never succeed. On the other hand, if he is given full freedom of action without any definite objectives, you will have confusion.
Both conditions are also necessary on a national scale. The objectives must be well defined. In other words, we have to do some planning; all sectors of our economy, that is, industry, labour, agriculture, etc., must be left free to experiment and choose with a view to attaining the national objectives. Such planning on a national scale is not synonymous with socialism and does not mean that the state must take over and control our economy. As a matter of fact, socialism, in its strictest meaning, carries the germ of its own defeat and not only on the theoretical level, because we think that it entails an inferior way of life, but on the level of practical achievement, since an economy where administration is too centralized and controlled will be less successful, produce less and will be less efficient than the one where the individual is left free to choose and make his own decisions.
But personal initiative has little chance to give the best results on a national scale unless objectives are clearly set out. And such national objectives can only be established when the government has clearly de-
Business of the House
fined and explained them and shown their benefits, after having consulted all economic groups.
We are today facing a serious problem of surplus capacity which, for several years, will cause serious difficulties in the marketing field. During those years, we should be able to rely on a national policy ensuring a freer and easier access to world market for our products, on a fiscal policy enabling us to maintain employment, to improve our equipment and productivity and, lastly on a transportation policy which will permit us to compete in Canada and abroad.
Finally, we must, because of the size of our industry, establish and publicize our objectives five to ten years ahead, so that the government, as well as industry and labour, can take the necessary steps to reach this goal.
Mr. Chairman, it is to be hoped that when the minister is talking of economic planning, these are the directives which he intends to give to the economic council. But I doubt that the economic council will reach its objectives, because the minister has not provided in the bill for the necessary financial reforms, in order to make the responsibilities of the Bank of Canada more flexible, to increase the purchasing power, in brief to achieve the production level which would make financially possible what is physically desirable in Canada.
(Text):


Mr.   Chairman@: Shall clause 1 carry?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Lucien Lamoureux: Clause 2?


Gordon Minto Churchill: No, we shall stop there. It is 10.30.
Progress reported.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Mr. Speaker, before I say anything about the business for tomorrow, I want to express appreciation of the co-operation in getting this extra half hour and getting a start on this other bill. I did raise a question with my hon. friend from Winnipeg South Centre about sitting tomorrow evening. I gather that would be inconvenient, but I wondered about the possibility of perhaps sitting until seven o'clock, which might not inconvenience members unduly and might make the difference between getting through and not getting through.

Business of the House


Gordon Minto Churchill: I regret that it would be inconvenient to sit tomorrow night. I have an alternative proposal which we might confirm after each party has a caucus tomorrow. We would give consideration to extending the hours even further on Thursday, and really extending them on Friday to see if we could not wind up this week. I am not making any commitment at this stage, but I am prepared to discuss that with my colleagues, and later tomorrow confer on this proposal.


John Whitney Pickersgill: I can assure hon. members on the other side of the house that I believe I can speak for everyone on this side of the house when I say we are willing to sit whatever hours hon. gentlemen on the other side are willing to sit this week, with a view to completing the work of this part of the session before the end of the week. If hon. members would consult in caucus and let me know after the caucuses tomorrow, I would be glad to make the necessary proposal tomorrow to the house.


Robert Norman Thompson: I believe that all members in this house are interested in getting through the work which is before us as quickly as
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we will discuss this tomorrow morning, but I can say now that we will join in any general agreement to extend the hours in order that we can get through the work as quickly as possible.


Stanley Howard Knowles: Perhaps the four of us who deal with these matters might meet for a few minutes when the house rises so we will know what it is we are going to discuss in our caucus meetings tomorrow morning.


John Whitney Pickersgill: That is a very good idea.


Gordon Minto Churchill: I hope, with all this preparatory work, the house leader will not add another item to the business he has already proposed.


John Whitney Pickersgill: I am happy to say that I can subtract one because we got through the bridge bill today. Tomorrow we will complete, I hope, the excise tax bill. Then, we will go back to the economic council bill which we have been discussing. Then, after that, we hope to start and perhaps complete second reading at least of the municipal development loan bill.


Gordon Minto Churchill: That is enough for Wednesday.


John Whitney Pickersgill: Yes, that is enough for Wednesday. I perhaps might indicate we will continue on Thursday with the same order I outlined, the municipal loan bill and then the surcharge order. Unless I am mistaken, the only other thing is interim supply. However, I must enter the same caveat as I entered last night, about which the Prime Minister will make a statement tomorrow.


Robert Norman Thompson: I wonder if I might ask the house leader a question concerning the business for tomorrow? Would it inconvenience his plans too much if we went on with the economic council measure tomorrow after orders of the day in order that we might carry through with what we have been talking about tonight?


John Whitney Pickersgill: I must say that if that would meet the wishes of the members of the house, and I take it there is nothing more in the committee stage of the tax bill except the one amendment that is under consideration, and if it is felt the continuity would be hptter if we took the economic council first, the government would not mind at all.


Gordon Minto Churchill: You cannot get exact continuity because first, you have the interruption tonight, then questions on orders of the day, and so on. Let us finish off the excise tax bill first and take things in the order the house leader has suggested.


John Whitney Pickersgill: Perhaps it could be clearly understood that we could go right on with the excise tax bill for third reading after the committee stage?


Gordon Minto Churchill: Not necessarily; I do not think you should have third reading when there is an amended bill.


Stanley Howard Knowles: I think we had better have the meeting.


John Whitney Pickersgill: Perhaps I had better stick to the order of business I announced at the beginning. I want to thank the hon. member for Red Deer for his co-operation.
It being twenty two minutes before eleven o'clock, the house adjourned, without question put, pursuant to standing order.
283S

Wednesday, July 31, 1963