1963-11-08

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, in the absence of the Secretary of State for External Affairs I would like to ask a question of the Prime Minister regarding the series of occurrences on the autobahn which, while the matter is peculiarly one for the big three allied powers, affects all NATO nations. I would ask the Prime Minister whether representations have been made to the United States against indulging in actions that are provocative and dangerous in their implications.


Righi Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, without accepting the right hon. gentleman's description of United States policy in this matter, we are making inquiries, and I hope that as a result of these inquiries either the Secretary of State for External Affairs or I will be able to make a statement on Tuesday morning.



PAKISTAN


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kooienay Wesi):: Mr. Speaker, I wish to address a question to the Prime Minister. Is the government of Canada giving any form of assistance to the government of Pakistan in connection with its program of reorganization, improvement and enlargement of its defence forces?


Lester Bowles Pearson: Mr. Speaker, I wonder whether the hon. gentleman would repeat the question. I did not quite get it.


Herbert Wilfred Herridge: Is the government of Canada giving any form of assistance to the government of Pakistan in connection with that government's program for the reorganization, improvement and enlargement of its defence forces?


Lester Bowles Pearson: To my knowledge, Mr. Speaker, no, but I had better look into the matter.



SOUTH VIET NAM


[Stage Direction]
On the orders of the day:
Hon. Paul Mariineau (Poniiac-Temiscamin-gue):: Mr. Speaker, my question is directed to the Prime Minister. In view of the statement made by the Secretary of State for External Affairs, could the right hon. gentleman tell us whether there has been a change in Canada's stand toward the recognition of the new regime in South Viet Nam?


Lester Bowles Pearson: No, Mr. Speaker; that matter is under consideration.



U.S. ACTION RESPECTING ECONOMIC CREDITS TO RUSSIA

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Can the Prime Minister say
whether representations have been made by the United States to Canada and to other NATO nations in favour of denying the sale by any of those nations of unstrategic materials on a credit basis to the U.S.S.R.?


Lester Bowles Pearson: I understand that reports have appeared in the press recently concerning discussions among NATO members on the subject of long term credit to the Soviet union and other communist countries in respect of the commodities which the right hon. gentleman has mentioned. As the house knows, it is the custom for members of NATO to hold periodic discussions relating to these and other matters of interest to the alliance. These discussions are, of course, of a confidential nature but I may say that no representations have been made to the Canadian government on this matter by the United States government or by any other government.


John George Diefenbaker: Would the Prime Minister not agree that if such representations were made-and there have been many reports that they have been made to NATO countries other than Canada-Canada should take the same attitude as the United Kingdom and continue to sell on credit regardless of the wishes of the United States?


Lester Bowles Pearson: Since I have said no representations have been made, the right hon. gentleman's question is surely hypothetical.

Inquiries of the Ministry


John George Diefenbaker: It is not very hypothetical according to the New York Times.



USE OF GRAIN COMPANIES IN SALE TO RUSSIA

[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. In the matter of the recent agreement to sell wheat to the Soviet union, was the Canadian wheat board making use of grain companies as agents and, if they were, what part of this transaction was handled by grain companies acting as agents of the Canadian wheat board?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: Mr. Speaker, the answer to the first part of that question is yes, the wheat board did make use, as usual, of its agents, and the Soviet union also made use of its agents in the transaction. It would not be in the public interest, nor would it be in conformity with public policy, to reveal the proportions or amounts done by individual agents.


Thomas Clement (Tommy) Douglas: As a supplementary question, when the minister spoke of the Soviet union having agents, do I assume these were simply agents of the Soviet government, or was it using grain companies as agents on this continent?


Mitchell William Sharp: The Soviet union uses international grain trading firms, just as the wheat board does, the only difference being that it uses them for buying while we use them for selling.


Thomas Clement (Tommy) Douglas: Did they use them in this instance?


Mitchell William Sharp: Yes, they did, Mr. Speaker.



POTATOES


[Stage Direction]
On the orders of the day:
Mr. Heath Macquarrie (Queens):: I have a question for the Minister of Trade and Commerce. I am sorry I did not give him notice but usually, it seems to me, the hon. gentleman has his music with him. Can the minister tell us how he is getting along in his exploration for new markets for potatoes which are very plentiful and very good in the maritimes just now?


Mitchell William Sharp: Perhaps the hon. gentleman
would not agree, but I think we are making satisfactory progress.



PENSIONS


[Stage Direction]
On the orders of the day:
Hon. J. W. Monteith (Perth):: Mr. Speaker, may I ask a question of the Minister of National Health and Welfare. Has the minister or the government expressed their willingness to share an additional $10 per month on old age assistance, blind and disabled allowances, so that the provinces may come to the November 25 conference prepared to accept such a suggestion without having to go back to their respective governments for agreement?


Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: Mr. Speaker, all aspects of this matter were discussed in September last at the ministerial meeting in Ottawa.


Jay Waldo Monteith: All I am asking is whether the provincial governments are in a position to come here to accept this. Have they been told this is available?


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, I cannot speak for provincial governments.


Mr. Heward Graffiey (Brome-Missisquoi):: Mr. Speaker, as a supplementary question, has the government's announced policy of withdrawing from joint programs changed the hon. lady's position in this regard since the meeting last September, of which she made mention?


Mr. Speaker:: The hon. member for Quebec West.


William Heward Grafftey: I repeat my question. Has the government's announced policy of withdrawing from joint programs changed the hon. lady's attitude in this regard since the meeting of last September which she mentioned?


Julia Verlyn (Judy) LaMarsh: No, Mr. Speaker.


Mr. Joseph Slogan (Springfield):: 1 have a further supplementary question for the Prime Minister. Is it Liberal policy, as outlined in this pamphlet, that an increase in the old age assistance pension to $75 per month will be made available to single women and widows at age 60, and the blind and disabled? Is it government policy, inasmuch as it was promised in the last election?


Lester Bowles Pearson: Orders of the day are not the appropriate place to discuss matters of policy of this kind as you yourself, Mr. Speaker, pointed out the other day in laying down the rules that should govern questions.

Inquiries of the Ministry


John George Diefenbaker: Another retreat.	DEFENCE PRODUCTION


William Heward Grafftey: I rise on a point of order, sir.


Some hon. Members:: Oh, oh.


William Heward Grafftey: I rise on a question of privilege, Mr. Speaker.


Mr. Speaker:: Which is it, a point of order or a question of privilege?


William Heward Grafftey: I may state my privilege very succinctly and briefly. The Prime Minister says that orders of the day is not the time for us to ask these questions regarding federal-provincial relations. May I inform this house, as I reach my point of privilege, that before the month of June last year I asked a series of questions of the minister-


Some hon. Members:: Order.


William Heward Grafftey: Mr. Speaker, if I could have silence I would state my question of privilege. Howling down by this arrogant government is something that cannot be condoned. Last June I asked at least two ministers pointed questions about federal-provincial relations. Subsequently I put on the order paper three motions for the production of papers asking for information. This was before June 26 last. We are now, Mr. Speaker, less than two weeks away from a federal-provincial conference, and I am still without that information.
Today we asked the ministry questions relating to federal-provincial affairs, but we were told orders of the day was not the time to ask those questions. My point of privilege is this. This is a new, subtle, Machiavellian type of closure.


Some hon. Members:: Oh, oh.


William Heward Grafftey: Hon. members may laugh, but it so happens that at this stage in Canadian confederation, federal-provincial relations are exercising the imaginations of many people. This is a new, subtle type of closure, when opposition members cannot get information.


Mr. Speaker:: Order. I have been as lenient as possible because, for obvious reasons, I was interested in hearing the question of privilege raised by the hon. member for Brome-Missisquoi. It might be useful to recall to all hon. members citation 178 in Beau-chesne's fourth edition:
Questions addressed to ministers should relate to the public affairs with which they are officially connected, to proceedings pending in parliament, or to any matter of administration for which the minister is responsible. Within these lines an explanation can be sought regarding the intentions of the government, but not an expression of opinion upon matters of policy.
I do not believe the hon. member has anything more to add. At least the latter part of his statement I thought was out of order.



CARIBOU AIRCRAFT


[Stage Direction]
On the orders of the day:
Mr. John R. Maiheson (Leeds):: Mr. Speaker, in the absence of the Minister of Defence Production I have a question for the acting minister, of which I have given notice. Is it a fact that the United States congress has revised its decision and has now agreed to continue to participate in the Canadian Caribou II development program, as reported in last night's issues of the Ottawa Citizen and the Ottawa Journal?


Hon. J. R. Nicholson (Acting Minister of Defence Production):: Mr. Speaker, I regret to have to advise that the report is incorrect. In the absence of the Minister of Defence Production, I am informed by his officers that to the best of their knowledge the whole matter of continuing participation in the development of the Caribou II aircraft is still under consideration by the appropriate committees of the United States House of Representatives and Senate. When a final decision has been taken, an announcement will be made by the minister.



TRANS-CANADA AIR LINES WINNIPEG MAINTENANCE BASE    REQUEST THAT REPORT BE MADE AVAILABLE TO PROVINCE

[Stage Direction]
On the orders of the day:
Mr. S. J. Enns (Porlage-Neepawa):: Mr. Speaker, will the Minister of Transport reconsider his position on the question of the T.C.A. overhaul base in Winnipeg and make available to the Manitoba authorities the Dixon-Speas report so that the province can examine the arguments contained therein, which so far have been kept secret?


Mr. Speaker:: I think this is a question for the order paper.


Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I should like to ask a question of the Prime Minister in connection with the T.C.A. overhaul and maintenance base in Winnipeg. Has the Prime Minister suggested to the provincial government of Manitoba that a detailed and comprehensive submission should be made concerning the economic conditions surrounding that problem, and, if so, how can that be done by the provincial government without access to the Dixon-Speas report?


Lester Bowles Pearson: I have not made such a suggestion myself to the Manitoba government.

Inquiries of the Ministry FINANCE



AUTOMOBILE PARTS


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. The president of the B. F. Goodrich Company, speaking in Windsor, has said that his firm has found that tariffs between the United States and Canada are about 100 per cent higher than they were before the recent auto parts announcement. I should like to ask the minister if this is correct, and whether he considers that some act of retaliation is being exercised by the government of the United States.


Mitchell William Sharp: Mr. Speaker, so far as I know the laws of the United States on tariffs remain as they were. I cannot believe that the gentleman in question is quoted correctly, or that he was speaking about facts if he was, because the laws of the United States are acts of congress that cannot be changed overnight.


Thomas Clement (Tommy) Douglas: May I put a supplementary question to the Minister of Trade and Commerce following the statement I made a moment ago. Would the minister look into the statement made by the president of the Goodrich company of Canada in the course of his speech at Windsor that rubber sealing strips were now facing a tariff of 17 per cent instead of 8J per cent, and that farm tractor tires, which formerly had been admitted without paying any duty at all, were now faced with a tariff of 8-J per cent? I wonder if the minister would look into this to see whether the statements are factual and whether they reflect any retaliatory action by the United States.


Mitchell William Sharp: I will be happy to do so. I can assure the hon. member that in any case this would not represent retaliatory action. If it has happened, it has been pursuant to laws passed by the United States before the auto parts announcement was made.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Georges Valade (St. Mary):: Mr. Speaker, my question is directed to the Prime Minister. The matter was brought to my attention yesterday by the newspaper which mentioned that the Postmaster General and 16 other members from Quebec went to make representations to the royal commission on biculturalism. During that visit one member

asked the commissioners not to be a smokescreen. Was this visit intended to make sure that the royal commission would not be a smokescreen?



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, my question is directed to the Minister of National Revenue. Has he received complaints from taxpayers whose income tax returns were altered without notice, especially with regard to charitable donations?


Hon. J. R. Garland (Minister of National Revenue):: Mr. Speaker, I think it is fair to say that the Department of National Revenue receives many letters expressing different views on this matter, but I want to make it clear that so far as charitable donations are concerned, amounts are not reduced arbitrarily. As I have said before in the house, an attempt is made in all cases to verify the correctness of the amounts claimed.


Gilles Grégoire: Mr. Speaker, I wish to ask a supplementary question. Could the Minister of National Revenue have an investigation made at the Quebec office to find out if the policy he mentioned regarding the procedure to be followed has always been carried out?


John Richard Garland: I am glad to say I am regularly in touch with most of the offices, particularly the Quebec office, and I am quite certain that that policy is carried out in Quebec. The same policy is carried out in the Quebec office as is carried out in the rest of Canada.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. In view of the fact that the list of business which the Prime Minister gave us last Monday appears in the main to be a list of business for the next session of parliament, can he tell us whether that list, when it is completed, will include legislation respecting health insurance or medicare?


Lester Bowles Pearson: Mr. Speaker, as this question seems to me to

consider the next session of parliament, I do not think it can be considered urgent today.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. May I ask the Prime Minister whether this subject will be considered at the forthcoming federal-provincial conference?


Lester Bowles Pearson: I think the agenda of the forthcoming conference has already been tabled, so my hon. friend will know what it is.



ROYAL COMMISSION


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, is the Prime Minister now in a position to say when the report of the royal commission on health services presided over by Mr. Justice Hall will be brought down?


Lester Bowles Pearson: I am not, Mr. Speaker. My last information was that it would be available some time between the end of November and the early part of December, but I will make further inquiries.



HOUSING


[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 Minister of National Revenue. Could he explain why the deputy minister of public works does not sit on the executive of the Central Mortgage and Housing Corporation as did his predecessor, Mr. Young?


Mr. Speaker:: Order. I do not think this question is in order.


John Richard Garland: I should like to answer it, Mr. Speaker.


Some hon. Members:: It is not in order.


Marcel Lessard: If the minister thinks he can answer my question, I feel the house would be interested to know why the deputy minister of public works, Mr. La-londe, does not sit on the executive, as did his predecessor, Mr. Young, when he held the same post.
Is it because the new deputy minister of public works is a French Canadian that he is not allowed to sit on the executive?


Mr. Speaker:: Certainly that question is definitely out of order on several grounds,
Inquiries of the Ministry not the least of which is that matters of administration are surely the responsibility of the minister himself. While there is no particular objection to inquiring for this information, I suppose, certainly the last part of the question was completely out of order.



DOMINION-PROVINCIAL RELATIONS INQUIRY AS TO TERMINATION OF JOINT PLANS

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Since the Prime Minister was, very properly, away yesterday, I was unable to ask him the following question. I wish to address it to him today. Is it now the stand of the government of Canada that shared programs with the provinces shall end?


Lester Bowles Pearson: The policy of the government on this matter has already been announced, and I have nothing to add to what has previously been said.


An hon. Member:: By whom?


John George Diefenbaker: Has the Prime Minister read the words of the President of the Privy Council in this connection; his speech in Toronto? I ask the right hon. gentleman again whether it is the purpose of this government to do away with shared programs.


Lester Bowles Pearson: As I have stated, the policy of the government on this matter has been announced. It has been announced both by myself and by the President of the Privy Council, and I have nothing to add.


Thomas Clement (Tommy) Douglas: Do I take it the Prime Minister is now saying that the statement made in Toronto by the President of the Privy Council, to the effect that the government would be prepared to withdraw from joint federal-provincial programs and to compensate provincial governments willing to take over such programs on their own, is the official position of the government with regard to this question?


Lester Bowles Pearson: That statement is not a new one; it has been made before on behalf of the government-that we would be prepared to consider, with the provinces, withdrawing from these programs in certain circumstances.


Stanley Howard Knowles: May I ask the Prime Minister a question. Will he consider, not today but at an early date, making a clear statement to the house indicating which of these shared programs the government is considering withdrawing from, so that the uncertainties that are now created can be cleared up?

Income Tax Act


Lester Bowles Pearson: There is no uncertainty of which I am aware, but I shall be glad to take the hon. member's suggestion under consideration.


Paul Raymond Martineau: May I ask a supplementary question. Will the Prime Minister state whether the speech made by the President of the Privy Council represented government policy in regard to joint programs?


Lester Bowles Pearson: I have already answered that question.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Marcel Lessard: Mr. Speaker, I should like to put a question to the Minister without Portfolio, the hon. member for Matapedia-Matane. Since the establishment of the joint department or of the double office of ministers of agriculture is postponed indefinitely, could the minister assure the house and eastern farmers that he will speak forcibly on their behalf to the cabinet and push the demands of eastern farmers in particular.


Hon. Rene Tremblay (Minister without Portfolio):: Mr. Speaker, like all other Liberal members in the house, I shall always champion the eastern farmers.



INCOME TAX ACT

[Stage Direction]
The house resumed, from Thursday, November 7, consideration in committee of Bill No. C-95, to amend the Income Tax Act- Mr Gordon-Mr. Lamoureux in the chair.
On clause 16-Exemption of income from manufacturing or processing business in designated areas.
Mr. Hales:: When we were last discussing the amendment to this clause, the Minister of Finance was going to give the committee his views on this section relating to the 95 per cent provision covering the cost of machinery, and we were discussing whether new and old machinery would be eligible. Has the minister any further remarks to make?


Mr. Gordon:: I think we pretty well exhausted the subject, Mr. Speaker.


Mr. Baldwin:: Mr. Chairman, would you read the amendment?


The Chairman:: Yes.
That clause 16, section 71A, subclause (3) be amended by substituting 25 per cent in place of 95 per cent in line 17 and by substituting 25 per cent in place of 95 per cent in line 45.
(Mr. Knowles.]
All those in favour of the amendment will please rise.
Amendment (Mr. Skoreyko) negatived: Yeas, 39; nays, 83.


William Heward Grafftey: Before this clause carries, would the Minister of Finance, the Minister of Industry or the Minister of Labour tell us what the government's future intentions are relating to consultations with municipalities before they are designated under this provision? I think by now hon. members opposite realize that we consider this principle of consultation extremely important. Is it the government's intention in the future to consult local officials before designating areas?


Walter Lockhart Gordon: Mr. Chairman, the Minister of Industry has already stated that when we have had some experience with this legislation he will be considering ways and means of improving it. Apart from that I do not think I can go further at this moment, except to point out to the hon. member that if any consultations of that kind were to be conducted, the proper thing would be to talk to the provinces rather than the municipalities.


Alfred Dryden Hales: On this subject, would the minister give us an assurance that he will reconsider the designation of Brantford before the 12 months expire?


Walter Lockhart Gordon: I would be very pleased to give the hon. member an assurance that all the areas, and the formula, will be considered once we have had a little experience with it.


Mr. Lambert:: I have one question for clarification of what the minister indicated the day before yesterday, that the areas are designated on the basis of reporting districts of the national employment service. It has been the practice of the national employment service to extend the number of its offices, and this will create new reporting districts. I am thinking of the case put forward by the hon. member for Renfrew South, when he indicated that in one reporting district there was great disparity of conditions but by reason of an average the district qualified as a designated area. In other words, within a reporting district there could be an area that would not qualify, an area that was pretty well off. What happens under that circumstance? Does that district lose its qualification, or what happens to any projects started in it?


Walter Lockhart Gordon: Quite clearly anybody who started an operation to take advantage of these inducements should not be penalized. Apart from that I really have not anything to add to what I have said already. If any of these national employment districts should

Income Tax Act
be changed, then there will be a problem that will have to be dealt with, but I have not heard any suggestion that any of these particular areas are going to be affected in that way.


Alfred Dryden Hales: I wonder if the minister would enlarge on the wording in line 35 on page 13, "new manufacturing or processing business." What does he mean by this? Does a new manufacturing company have to be manufacturing a new product?


Walter Lockhart Gordon: The definition is the same that v/as used under the old section 40A, which was introduced by my friend the hon. member for Digby-Annapolis-Kings a year ago.


[Stage Direction]
Clause agreed to.
Clauses 17 and 18 agreed to.
On clause 19.
Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Chairman, I suggest that this clause be reconsidered, because here again the government is doing something that is definitely not very advisable. In this connection I would like to quote from Hansard of November 9, 1962 dealing with the question of special provisions for pipe line companies to deduct exploration costs as business expenses. The question which comes to my mind is, why would a pipe line company rfnbark on the process of drilling and exploration unless it were going to embark on oil and gas production?
On November 9, 1962 the hon. member for Kingston, who since that time has been elevated another step in the hierarchy, had some very pointed things to say about special provisions being given to oil and gas companies. I remember thinking at the time it was an excellent speech, in fact I marked it very carefully in Hansard, and I am glad the matter has come up again. Quoting from page 1464 of Hansard for November 9, 1962 the hon. member for Kingston had this to say:
That is fine. Resolutions 6 to 10 primarily affect the oil and gas industry in Canada. It was estimated by the previous minister when they were introduced that they will cost the treasury some $15 million in a full year. The oil and gas industry as such will contribute very little to the income tax revenue of the federal government even though its gross revenue exceeds $500 million. I can think of no other industry in Canada in this favourable position.
It has been claimed that this industry needs further encouragement to find reserves. According to figures produced by the Canadian petroleum association, at the end of 1961 reserves on hand in Canada amounted to 18.9 years supply. If we compare our situation with the United States we will find that the United States had on hand at the same date some 12 years supply, and over the past 100 years the United States working inventory has ranged between 10 and 15 years-
What we need is more and faster growing markets for petroleum products. If we had these we would not need tax concessions to stimulate the search for oil. It is noteworthy in this regard that we import far more oil than we export, in spite of our unused capacity, and this is a factor contributing to our exchange problems. Incidentally, although we have had a national oil program, according to bureau of statistics figures capital investment in oil producing was $561 million in 1961 compared with $697 million in 1957.
I suggest that the situation is no way changed from the time when the hon. member for Kingston made that very eloquent and telling speech, and I would urge the Minister of Finance, in view of his situation with regard to our national housekeeping, that he should cast a very dubious eye over this measure that he introduced some months ago, and determine whether this is justified in the light of Canada's present economic situation and in the light of his own views with regard to budgetary deficits. I should hope this particular provision would be reconsidered by the government in the light of the figures presented by the hon. member for Kingston, and in the light of the figures I myself presented during that same session, in 1962.


Mr. Benson:: I thank the hon. member for Nanaimo-Cowichan-The Islands for complimenting iqe on my speech of last year, and I can assure him that my views generally toward these sections of the act have not changed. However, it was not deemed advisable to withdraw the sections in this particular budget, which was a decision of the government. In dealing with this particular clause, however, which is designed to extend the privileges which exist under the substance of the act to the pipe line companies, I am in complete agreement with it as such.
The majority of the independent pipe line companies in Canada are Canadian owned. As I recall it, three out of five are Canadian owned, and their position has been that they are not allowed the advantage of going out and developing their own raw materials to send through their own pipe lines. As these companies are to a large extent Canadian owned I would like to see them continue to exist, and they should have the same right as integrated companies to write off their exploration and development expenses. Integrated oil and pipe line companies can now write off their development expenses. The cost of going out and expanding their fields can be written off against the operations of their pipe lines, whereas an independent pipe line company cannot do this. In a similar sense you can take the large steel companies in Canada which have the

Income Tax Act
privilege of going out west and writing oil expenditures in this regard as against steel profits in eastern Canada.
The purpose of the section is to extend fair play to independent pipe line companies.


Colin Cameron: I find the hon. member's argument singularly unpersuasive. What he is telling us is that we are allowing some people unjustifiably to get into the public treasury and we should allow others to exercise their sticky fingers in the same way. Any pipe line company that embarks on a program of development and exploration becomes an integrated company. It has an integrated operation. At any rate, I suggest that last year the hon. member for Kingston considered these allowances to be scandalously unjustified; and to give them to other companies just because some companies have these allowances, which he considers scandalously unjustified, does not seem to me a suitable argument for extending the scandal a little farther even under the guise of these other companies being true blue Canadian companies.
I do not think it really matters very much to the Canadian consumer whether he is robbed by a Canadian or robbed by a foreigner. On the other hand, I do suggest this is something that indicates the necessity for a complete overhaul of this section of our fiscal set-up, and I would be much better pleased to see the minister come forward with a completely revamped structure in this regard rather than, as I say, compounding the mistake that has already been made in regard to existing companies.


Edgar John Benson: If I may, I should like to make my position clear. Last year I was against all these allowances and the sections in the act dealing with them. Quite honestly I still have grave doubts with regard to their validity from a taxation point of view. Let me first state that. However, since it has been the decision of the government to allow these sections to stand, I think there is a strong argument that the same benefits should be extended to the independent pipe line companies as are extended to the large integrated companies at the present time.


Herbert Wilfred Herridge: Mr. Chairman, I have been interested in this hybrid section of the Income Tax Act for a good many years. I want to support what the hon. member for Nanaimo-Cowichan-The Islands has said. I cannot continue without complimenting him on his elephantine memory, which is very useful on occasions.
[Mr. Benson.)
We object to this type of legislation regardless of the explanation, and one could see that the parliamentary secretary was most uncomfortable in having to make a retreat on account of expediency. We object in principle to this type of legislation which permits these corporations to deduct from their taxable income the cost of mining operations and in other cases the cost of well drilling and pipe lines. As a matter of fact, on account of this legislation being in the Income Tax Act the Canadian people have financed United States subsidiaries in Canada to the tune of hundreds of millions of dollars. Then we are told we have not got the capital in Canada.
I want to take the opportunity to mention again something I have mentioned in previous years, because it is obvious that the government is going to continue this same practice on this occasion. We have been told repeatedly that this type of clause in the Income Tax Act was intended to promote investment and increase production in Canada. That is what we were told some years ago when it was first introduced into the Income Tax Act.
I want to ask the minister this question. On the basis of that argument, and if the principle is going to be continued, has any further consideration been given to extending the same advantages to farmers who increase production as a result of clearing, draining or irrigating land? All these activities increase production. The farmer, who is a small person compared to these companies, gets no advantage at the present time although he does exactly the same thing that these large companies which are taking advantage of the act are doing.
I also want to bring to the attention of the minister a paragraph in the annual report of the Department of Forestry for 1961-62. Under the heading "Study of the Effects of Income Tax on Private Timber Management" it reads as follows:
This study was begun in co-operation with officials of the taxation divisions of the Departments of Finance and National Revenue in response to representations that have been made to the government. Its purpose is to examine the merits of recommended tax changes that would modify the taxing of income that is solely attributable to timber growth. The study should reveal conditions under which the growing of timber by private enterprise will be encouraged.
I want to ask the minister two questions before I sit down. First, has consideration been given to extending to the farmers of the country who increase production by any method the same privileges that are extended to these large corporations? Second, what has been the result of the study referred to in this report, and is the department giving consideration to extending the same privileges

Income Tax Act
to tree farmers who are farming on management principles over a long term and who are increasing production while at the same time, because of their practices, maintaining a perpetual yield and conserving our forest resource capital in so far as that comes within their jurisdiction? Is the minister giving any consideration to amending the act in the future to allow these people to enjoy the same privileges as large corporations?


Walter Lockhart Gordon: Mr. Chairman, I am very interested in the points that the hon. member for Kootenay West has just raised. Like him, I happen to be a tree farmer, although I suspect I am a very much smaller tree farmer than the hon. member. However, I know enough about it to be sympathetic. I think the matter should be investigated, and I will see that it is done. I am not familiar with the report the hon. member mentioned, but I will look it up and see that the matter is looked into.
As to the main point that the hon. member for Nanaimo-Cowichan-The Islands has mentioned, I not only compliment him on his elephantine memory but also on his pungent phraseology, some of which I do not always agree with. It seemed to me that his point was whether it is necessary any longer, if it was necessary originally, to grant fairly substantial concessions to a particular industry.
I must say that personally I think he has raised a very important point. It is something that the Department of Finance started to consider before the budget and then we decided that in view of the magnitude of the problem perhaps we should wait until we had heard from the royal commission on taxation, who I am sure are looking into the matter. It seemed to us that in the meantime these particular companies which are essentially in the same industry should not be penalized, and that is the purpose of clause 19. I agree with the hon. member that the broader issue should be investigated and looked at very seriously.


Thomas Clement (Tommy) Douglas: Mr. Chairman, I am wondering where the hon. member for Kingston gets his information when he speaks of these pipe line companies as being mainly Canadian companies. If he has some information I would certainly be glad if he would give it to the committee.


Edgar John Benson: I am speaking offhand, but I will be glad to check into the statistics with regard to the matter. As I recall the situation there are five of these companies, three of which are Canadian controlled. I do not have the information with me, but I will be glad to check. As I said, three of the five are
Canadian controlled companies. With regard to the fourth there is some doubt whether control is in Canada or the United States. As to the fifth, the majority of the stock is held in the United States.


Thomas Clement (Tommy) Douglas: If one takes the total capital assets of all companies I do not think there is any doubt about the fact that the preponderant ownership of the pipe line companies in Canada is located in the United States.


Walter Lockhart Gordon: I think the hon. member may be mistaken about that. The largest one, of course, is Trans-Canada which, according to my recollection, is 80 per cent controlled in Canada.


Thomas Clement (Tommy) Douglas: Does this mean that the Texas buccaneers have unloaded themselves of their ownership and control?


Walter Lockhart Gordon: It means that control has changed.


Thomas Clement (Tommy) Douglas: Mr. Chairman, I think we would appreciate having some information on this matter, and maybe the Minister of Finance or his parliamentary secretary would supply it. I know something about the pipe line companies in the west, and I know that a good many of them are mainly owned in the United States. If the minister says he has some information I will be glad to sit down so he can put it on the record. I thought the minister was going to give it.


Walter Lockhart Gordon: I have not got it here.


Thomas Clement (Tommy) Douglas: If the minister is not going to give it now I want to say that I think the whole question ought to be thoroughly investigated. I am not sure that the government is justified in saying that the matter is going to be discussed by the royal commission on taxation, and therefore the government should not do anything. If the principle is wrong we should be restricting it instead of extending it. The only justification for allowing companies to carry on drilling and exploration programs at public expense, which is what this legislation means, would be if we were faced with a possible shortage of gas and oil supplies. This is certainly not the case. What we have done in this country over the years is to finance, out of the public treasury, drilling and exploration programs that have resulted in fantastic profits for oil and pipe line companies, a goodly number of which are owned in the United States.
Instead of the government extending this I think it should be eliminated. We will certainly be watching with keen interest what the Minister of Finance does when he brings down his budget, and I certainly urge him
4S44

Income Tax Act
not to wait till the royal commission brings down its report. I suggest that for his midnight reading, instead of perusing the Diefenbaker years he should read the speech of the hon. member for Kingston, and having read and digested it I hope he puts the fine conclusions to which the hon. member came into legislation when he brings down his budget.


[Stage Direction]
Clause agreed to.
Clauses 20 and 21 agreed to.
On clause 22-Tax.
Mr. Brewin:: I have an amendment to propose to clause 22 to which I invite the attention of the committee. I shall move the same amendment to clauses 23 and 28 when they are reached.
Clause 22 imposes a special tax of 5 per cent on certain dividends and corporations which do not have "a degree of Canadian ownership and control". I invite the committee to notice the words "and control". I might mention for the sake of completeness that clause 23 uses the same phrase. It alters the rate of the withholding tax so as to impose a tax of 10 per cent after the date fixed in the clause dealing with dividend payments by corporations with "a degree of Canadian ownership and control"; it imposes a 20 per cent withholding tax on corporations which do not so qualify.
Clause 28 defines what is to be deemed, for the purposes of the act-that is covered by clauses 22 and 23-a corporation which has a degree of Canadian ownership and control. By clause 28 a corporation is deemed to have a degree of Canadian ownership and control if two alternative conditions and another condition exist; that is to say, if 25 per cent of the voting shares are owned in Canada; second, if shares are listed on a Canadian exchange and no one foreign shareholder owns more than 75 per cent of the stock; and third, there is another condition that not less than 25 per cent of the directors are resident in Canada.
My proposed amendment will strike out of the phrase "a degree of Canadian ownership and control" wherever it appears the words "and control". The effect of the amendment would not be to change the substantive tax; the tax will remain precisely the same. The purpose of the amendment is to remove from the act what might be called a false and misleading label or description.
It is not necessary for me to discuss the merits of the proposed change. At the resolution stage we expressed our reasons for feeling that the proposed change did not achieve the stated purpose of encouraging Canadian control of industry, but in fact discouraged it. We in this party are all in

favour of effective legislation to encourage Canadian control of Canadian industry, but in my submission the label put on these corporations, which would benefit from the proposed incentives, of "a degree of Canadian ownership and control" is false and misleading. The words "and control" are meaningless. Under this definition a corporation can qualify for the incentives which could not, by any fair stretch of the language, be said to have a single trace of Canadian control. For example, a 25 per cent interest may in certain cases give a measure of control, but in the case of a wholly owned United States subsidiary, which is the most typical case with which we are dealing here, there would be no element of control whatsoever.
The same reasoning applies even more clearly to that part of the clause which states that all that is required to qualify is that shares should be listed on an exchange, and that no one foreign shareholder should own more than 75 per cent of the stock. Nor does the provision that one out of four directors should be resident in Canada give any measure or degree of Canadian control. It would be perfectly easy to have what is known as a dummy director, who to all intents and purposes would actually be 100 per cent subservient to the foreign shareholders. If I as a lawyer, or any other learned hon. member, were asked to give advice as to whether in the case of a corporation with 25 per cent of the shares owned in Canada and with one dummy director resident in Canada it could be said that there was any degree of control over that company, I would be negligent if I said yes. I would be fired from my job if were to be so misleading as to suggest that that state of affairs constituted any degree of control. There is no such thing as a degree of control; there is either control or no control. This state of affairs represents no control whatever.
My objection to the wording of the clause is not a frivolous or pedantic one. People are prosecuted who attach false labels to goods and then seek to sell them to the public, and they are rightly prosecuted. We condemn, and properly so, false advertising. Yet the government of Canada can sell this legislation to the public on the pretext that it is giving incentives and encouraging Canadian control over Canadian industry. This claim is not true. In my view parliament should set an example of honesty. According to the legal authorities it is true that parliament can declare black to be white and white to be black. I believe it was the famous Sir Edward Coke who said that.
But notwithstanding our right to declare white to be black and black to be white,

we must not be misleading. It is my view that it is misleading to define a corporation, lor purposes ol tax incentives, as having a degree of Canadian ownership and control when there may well be not one iota or scintilla of Canadian control involved. Therefore I move:
That clause 22 of the bill be amended by striking out from subsection (1) (a) and (1) (b) thereof the words "and control".
If this amendment meets with the approval of the committee I will move a similar amendment in respect of clause 23, where the words appear, and clause 28 when the same phrase appears.


Norman Platt Lambert: I think this may well come as a surprise to the minister, but so far as clause 22 is concerned, which is section 105B (a), there is a complete divergence of expression. What is said in the French version is not what is said in the English version. The English version says:
-did not have a degree of Canadian ownership and control.
The French version says:
-n'etait dans aucune mesure possidie oil con-tr6l6e.
When we turn to clause 28, which is the definition clause, the meaning is the same in French as in English. Therefore there will have to be a necessary amendment to the French version to bring it in line with the thinking expressed by the act.
Having said that with respect to the drafting, I must say that I would go even further than the hon. member for Greenwood and repeat the remarks I made on the resolution stage and on second reading, that so far as the Canadianization or the patriation of capital is concerned, this provision means precisely nothing. It is already simple to have foreigners or non-Canadian citizens resident in Canada hold office for a period as managers or as local officials of companies. I refer particularly to smaller companies, not the larger ones; the privately held and controlled companies. I do not know many subsidiary companies in Canada which are public companies; they are primarily wholly owned or closely controlled subsidiaries of foreign corporations. To say that you are going to have a greater degree of control because you have Canadian residents or residents of Canada as directors is frankly nonsense. If you are going to have Canadian ownership and control, then these people must ba Canadian citizens.
I realize the minister may say that this is introducing into the act a concept of nationality or citizenship which does not exist in other parts of the Income Tax Act. There
Income Tax Act
is nothing else in the act which offers incentives to companies which have a Canadian nature, and the Canadian nature comes about by reason of this so-called ownership or control. The minister is himself introducing an exception into the act in this regard by providing for these incentives.
If he is trying to patriate foreign capital, let him go all the way. He is offering an incentive to capital. All right; let us make it Canadian. I cannot see the logic of the argument that because this provision does not exist elsewhere in the act it must not be introduced now; that we must not allow the principle of citizenship but, rather, that we must look merely to residence. I find the whole provision in this connection to be meaningless.
With regard to the amendment put forward by the hon. member for Greenwood, I think there may be some justification for it, though the words "and control" seem to be a reference to the directors rather than to the so-called ownership. It comes down to this. The hon. member is asking us to delete or subtract something from nothing.


Walter Lockhart Gordon: I was impressed by what the hon. member for Greenwood had to say, though I do not think it makes any great difference one way or the other. I do not think there is any real substance in the point. I could argue, I suppose, that the present drafting has certain advantages, and it has, but I do not think it really matters. I wonder whether the hon. member would be willing to withdraw his proposed amendment and allow us to pass a separate amendment which I would ask my hon. friend the Minister of National Revenue to move in the following terms:
That Bill C-95, an act to amend the Income Tax Act, be amended by striking out the expression "ownership and control" wherever it appears therein and substituting therefor the expression "ownership".
Thus we would be able to do it all at one time.


Francis Andrew Brewin: Sounds all right to me.


Lucien Lamoureux: Is it agreed that the hon. member may withdraw his amendment?


Francis Andrew Brewin: On the understanding that the minister will introduce an amendment which covers the same ground and goes one better.


John Richard Garland: I move the amendment which was read by my colleague.


Stanley Howard Knowles: I do not wish to be pedantic, but surely amendments have to be in terms more precise than this. Should we not be told in what clauses and in what lines this change takes place?

Income Tax Act


Walter Lockhart Gordon: Not according to the Department of Justice, which prepared that amendment.


Norman Platt Lambert: Under which clause of the bill will this amendment appear?


Lucien Lamoureux: May I suggest that the amendment be made in connection with a specific clause. Perhaps it might be made to refer to clause 22 in this particular instance.


Walter Lockhart Gordon: I wonder if the committee would allow this amendment to stand until we have had a chance to consult the lawyers.


Francis Andrew Brewin: I may have acted too quickly in withdrawing my amendment. It may be that my drafting is superior.


Walter Lockhart Gordon: We can always give the hon. member for Greenwood the opportunity to come back.


Francis Andrew Brewin: I am glad the minister has accepted the principle. No doubt he can work it out.


Stanley Howard Knowles: The Department of Justice notwithstanding, I think your ruling is a proper one, Mr. Chairman. We should make amendments to specific clauses of the bill. We cannot, in committee, amend the bill. We amend clauses. What is the Department of Justice thinking about?


Lucien Lamoureux: We are on clause 22, and I submit this is the only matter we can amend at this time.


Mr. Nowlan:: It seems that the amendment, like Lucifer, is suspended between heaven and hell. I do not know what will happen to it finally, but I am wondering whether the minister has any general statement to make on this clause. It is a clause which is far reaching in its implications, and it is one which introduces an entirely new principle. I think it is just as important as any of the clauses upon which we have spent a certain amount of time in the past few days, and I would hope the minister has a statement to make with regard to it before we begin dealing with it ourselves, in our discussion in committee and possibly by moving amendments later. Does the minister wish to comment or make a statement?


Walter Lockhart Gordon: I have made several statements on this subject. If the hon. member for Digby-Annapolis-Kings has anything to say about it I am sure we would be happy to hear from him, but I am not sure whether this other matter ought not to be disposed of first.


George Clyde Nowlan: I think we would wish to take a look at the proposed amendment. I assume the minister is not urging that there should be a division on this at once. I should

like to look at it and see what effect the proposal might have. There is no point in having a vote on it right now, particularly in view of the ruling of the Chair that it must be applicable to a certain specific clause. I think we should study the application of the proposed amendment to the various clauses, and when we have done so we shall be in a better position to reach an opinion with regard to it.
I do not intend to speak at any length on this part of the bill. As the minister has just indicated, we have discussed the matter at some length on other occasions. I spoke on it, as did other hon. members, during the resolution stage. We spoke on it again on second reading and now we are in committee. I do not propose to reiterate arguments which have already been advanced, or to weary the committee by repetition.
However, speaking for members on this side, for the official opposition at least, let me say I feel this clause introduces a new principle into the taxation law, a principle which in my view is of very dubious merit and which may do tremendous damage to the Canadian economy. We cannot allow the clause to pass in silence, contenting ourselves with the reflection that since we spoke about it before we need not say anything about it now.
I think no one would quarrel with the minister's motivation, his desire to have a greater degree of ownership by Canadians in corporations in Canada. We should all like to see a greater degree of Canadian ownership of our corporate structure. We in Canada, of course, are in a different position from the United States where corporations were established many, many years ago before the incidence of income tax and succession duties, when there was a tremendous pool of capital in Britain to be used for the development of the United States through the purchase of bonds and fixed income securities. The holders clipped the coupons and paid no income tax on the dividends. Finally United States corporations paid up the bonds and secured ownership of the equities.
That could not be done today because of the incidence of taxation. Investors generally are looking forward to capital appreciation; they are interested in equity holdings rather than the collection of dividends. The result is ownership rather than the holding of money, and this is the way in which our corporate structure in Canada differs from that of the United States.
I accept the theory that it is desirable to have ownership in Canada. On the other hand, I do not necessarily accept the argument that ownership by outside interests of Canadian

corporations or of corporations in Canada means there can be any great degree of political control of Canada or of Canadian institutions. I do not think this has been proven, and I doubt if it can be proven. There is, of course, a tremendous degree of foreign ownership. The minister has given us the figures of foreign ownership, mainly United States ownership, of our corporate structure. I am sure all of us who have had some experience with government know that from time to time problems arise in this connection. There are, perhaps, statutes in other countries which do tend to have an impact upon corporations outside the nation, but I have never seen them amount to any degree of interference with the Canadian political organization or with the government of Canada per se.
I do not believe it has existed. I do not believe it will exist, and I do not accept the argument that because a certain percentage of our corporate structure is owned by another country there is great danger of losing political control over our own institutions. I do not think we face this menace which is sometimes conjured up in week end magazines and newspaper headlines.
I noticed last week in Newsweek magazine -I do not suggest that this periodical has biblical authority, but it is sometimes quoted as being worthy of attention-an article referring to the degree of independence now being exercised by various countries which we used to call satellites of Russia-Rumania, Poland, and the rest-despite not only economic control but political control. The article, whether it is right or wrong suggested there was a fairly high degree of independence being exercised by those countries. If that is true, then it is rather fallacious to suggest we are going to lose control of this country because there are corporations in New York or Detroit which have ownership of our corporations.
Canada certainly would be a far different country if we did not have this United States control. We may not like it; we may not like to have the effects of it, but I wonder how much employment there would be in Canada today if we did not have this degree of United States ownership and control. I know in my own constituency, which is a rural constituency, there have been three corporations come in within the last 18 months. They are wholly owned subsidiaries of United States corporations employing several hundred people. Certainly they have integrated into the local economy, into the society of the community, and are becoming remarkably good citizens. The same situation applies all over Canada.
28902-5-290
Income Tax Act
As I have said, we can have some sympathy for the minister in his desire, a laudable desire. If we were rewriting the history of the world or reconstituting this nation, things might be done differently. I do not believe this provision is as essential as the minister urges. However, that is not my worry. If it is not as essential, and I suggest it is not, then I can see where very real difficulties might arise from the implementation of these measures which are put forward in this legislation. Great difficulties might be created for this country in the future.
As I said, what is the future going to be in respect of Canadian subsidiaries in the United States? After I sit down I should like the minister to discuss with us the situation in relation to the United States-Canada tax convention. We have conventions, of course, as hon. members know with various countries such as the Netherlands, the United Kingdom and Germany. I could run through a long list of them. As I recall it, and I am subject to correction, there is only one of these conventions under which a provision can be abrogated immediately, and that is the Canada-United States convention. This convention provides that if one country takes action to increase the tax beyond the 15 per cent, then automatically that section has been abrogated. In every other case, the United Kingdom, Belgium, and so on, as I recall it you would have to give notice before the first day of June in one year and the notice of abrogation would become effective on December 31 of the next succeeding year. In this case, once we pass this bill which the minister has before us providing for an increase in the withholding tax from 15 per cent to 20 per cent, the Canada-United States convention is abrogated.
It may be argued, and no doubt this is the hope of the minister, that since this provision does not become effective until next year it will not be construed as an abrogation, that there will be lots of time to renegotiate the treaty; after all, this is only November and we have December, January and a few more months in which things can be done; that we can renegotiate the treaty in the meantime. 1 am sure the minister has had discussions on this matter with the authorities in Washington, and perhaps has received assurance as to what they hope can be done. Nevertheless I am suggesting that once His Excellency gives approval to this bill, then technically we have abrogated the convention. Although the measure does not become effective until next year, our friends in the United States could consider the passage of the measure

Income Tax Act
now an abrogation of the convention. In any event, it is said, we have from now until 1964.
How long does it take to renegotiate a convention? I can tell the minister, I am sure the minister has been told, and if he has not his colleague the Minister of National Revenue could remind him very forcibly of what happened in the department not too long ago when this parliament changed from a succession to an estates tax act. This was merely a technical change. There were some changes in the rates, but there were no provisions in the bill applying to any one country. There was no resentment created. This was a simple matter for the Canadian parliament to decide, yet what happened? Immediately after the act was passed and the usual claims were going back and forth relating to the taxation of estates on the United States side, the United States said the treaty was broken. We had a succession duty act and now we have an estates tax act. It does not apply; we have to renegotiate the treaty. It was very simple; there were no problems. However, in spite of this, as I recall it took over two years to renegotiate this simple treaty. There was not so much time spent in the negotiation of it, because all that can be done by officials in a few hours, and it was.
We must not forget, however, that any treaty has to be enacted by the Senate of the United States. The Senate is a sovereign parliamentary body such as this. It does not intend to be pushed into the passage of an enactment, with the heavy calendar that it has. I am wondering just how long it is going to be or what the minister proposes in relation to the renegotiation of the treaty. If I understand the law in this regard-I may be wrong but I do not think I am-once this treaty is abrogated we are going to have a 30 per cent withholding tax. This is the United States taxation law, once a tax convention is abrogated. We have a good many Canadian corporations in the United States, perhaps not as many as we would like but I think Canadians are apt to overlook this. There are a number of Canadian corporations doing business in the United States. I have not had time to prepare a study of this, but if one reads the returns of the Department of National Revenue under tax schedule 1, or reads the report of the Bank of Canada, one will be pleasantly surprised to find the degree of ownership by Canadians of corporations in the United States.
I suggest, and I think the Minister of Industry and the Minister of Trade and Commerce would not quarrel with the argument, that this is one way we can develop our trade, by having subsidiaries in other countries and particularly in the United

States. They are doing this. We can think of the Moore Corporation and probably a dozen others. If these corporations are going to be subject to a 30 per cent withholding tax, what is going to be the result? Obviously there is going to be a change, and a field day for corporation lawyers. I should like to exchange the seat I have now for a partnership in some firm in Toronto. Obviously the corporate structure will have to be reorganized in these Canadian corporations; at least this is a possibility, and I think more than a possibility. They will become holding companies, and the Canadian parent will become the subsidiary. The whole corporate structure of these companies will be changed very drastically. We may well end up with United States corporations paying taxes to the United States government, and we will have branches of what were once Canadian parent corporations.
This is one problem that could arise out of this bill. The minister may be able to clarify the situation this afternoon as we proceed with the discussion. As I have said, in my opinion this is one of the most important legislative measures to come before parliament, with all due respect to the very important matters we have discussed during the week. I believe that every section of an income tax bill or any taxation bill is important to individuals, sometimes to scores and sometimes to thousands. This, I think, is important to the nation as a whole, and is something to which we in this parliament should give very careful consideration.
The minister has said it is the intention of the government to pass this measure. I am not proposing to move any technical amendments to it at the moment. The purpose of the measure is to obtain a greater degree of ownership of corporations here in this country. Suppose you have United States subsidiaries here, and there are hundreds of them; and suppose that, rightly or wrongly, they believe this law may be changed some day, that it is unworkable. If they are paying dividends they could stop the payment of dividends for the time being, and what would have been paid in dividends to people in the United States, on which the corporation would have to pay this 20 per cent, would be transferred to capital reserve, and that money would be used for expansion in Canada. So there would be a greater concentration of American ownership in Canada because we were penalizing them for sending the money out, and they would use the money for expanding here in Canada. The last state would be worse than the first. What the minister is trying to avoid could easily become the reverse because of the situation I have mentioned.

I said I did not intend to speak at length on this matter, but I have developed a little further some of the general arguments I advanced previously. We feel very strongly that this is a matter to which parliament should give a great deal of attention. Giving the minister full credit for his laudable desire to develop a national spirit, and so on, we feel this is the wrong way, and that we are starting off in a tax situation where we are penalizing one class as against another.
We have discrimination for the first time, and the minister has replied that this has happened before. I am not going into a corporate debate on it; but after the minister said that, I had representations made to me that if in fact discrimination may have taken place previously it was done by corporation statutes rather than through taxation statutes. I am doubtful if there is any other tax statute in the western world, certainly not in the British commonwealth, where you get discrimination between two classes of taxpayers, as is proposed to be set up through this bill. I think it is a wrong principle and one-


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


George Clyde Nowlan: Yes, but I cannot guarantee to answer it.


Donald Stovel Macdonald: He has made reference to the fact that there are no tax statutes in other countries which control foreign investments in this way and that the same purpose was achieved by corporation statutes. Can he refer to any other country which has the same division of legislative jurisdiction that we have? Is he not aware that this is a constitutional problem?


George Clyde Nowlan: It may very well be a constitutional problem, but we are dealing here with a tax statute and we have always applied equality of taxation. I suggest that we are departing from this principle in the bill that we have before us at the moment.
I am sure there are others of my colleagues on this side of the house who will want to discuss this matter, but I am particularly interested in hearing what the minister has to say about tax conventions and the possibility of renegotiating them. I do not have to remind the Prime Minister or the Minister of Trade and Commerce of the negotiations which this country will have to carry on in GATT. As the Prime Minister once said, there are and will be no easy or automatic solutions to our problems in the future. They are becoming more closely interwoven and interlocked with the trading problems of other nations.
28902-5-290J
Income Tax Act
Already we have a document which has appeared in the United States press, and rightly or wrongly the United States resents this type of legislation. The United States press thinks it is anti-American. At any rate it is technically, because that is the only country in the world with which we have a tax convention which is automatically abrogated when we approve of this tax. We have to give notice to every other country, but technically at least this is anti-American, and it is creating a substantial degree of resentment in certain quarters in the United States.
We need United States capital coming into this country, and we need co-operation in our international negotiations which will be conducted this year, next year, and I suppose on into eternity, because they have become part of our permanent way of life. One should be very careful in bringing forward legislation such as this even for a laudable but sort of will o' the wisp-with all due respect-intention that the minister has in mind.


Walter Lockhart Gordon: I will try and answer some of the points raised by the hon. member. In the first place, so far as I could gather, he raised some very grave doubts about doing anything in this general area of trying to get a greater degree of control of the Canadian economy back into Canadian hands. He raised a number of bogies and a number of points which were raised previously and which we have tried to answer previously.
The one with the most substance was that if we do anything like this we will annoy people, and therefore we will not be able to get the capital we need in the future. I would remind the hon. gentleman that the most important part of this bill-it is not this clause but I hope I will be allowed to refer to it because it has a bearing on it-in some ways the most important part of this bill is that which relieves certain institutions in other countries from a withholding tax on bond interest that they receive, provided those institutions do not pay tax in their own country.
There has been very little said on this point, and perhaps I am at fault because I have not emphasized it. However, I do so in relation to this clause because it has a bearing on it. This means that with the passing of that particular clause, and with the exemption of withholding tax on this particular kind of interest, we will open up an opportunity in this country to sell securities to one of the fastest growing accumulations of capital funds that exists. These pension funds by and large would not touch Canadian bonds since the withholding tax of 15 per cent was imposed on bond interest in the budget of December, 1960. That action eliminated this very large capital pool from Canadian borrowers, and in

Income Tax Act
addition that 15 per cent tax on bond interest payable to non-residents has increased the cost of money in Canada.
It is a firm part of this government's economic policy that we should keep interest charges as low as possible, having regard to the rates of interest charged in other countries. Therefore I suggest to the hon. member that this fear of his in relation to this withholding tax on dividends should be related, at least to some extent, to the other measures that are proposed in this bill, which to me, in so far as future capital requirements are concerned, are far more important.


George Clyde Nowlan: I do not want to interrupt the minister, but does he have any other instances? Has he any other clauses similar to that which he wants to draw to the attention of the committee, or is that the principal one?


Walter Lockhart Gordon: No, I mean to get back to this clause.


George Clyde Nowlan: This is the principal one to which the minister refers?


Walter Lockhart Gordon: Yes, for now. The hon. member in his recitation of the facts that troubled him about this particular clause raised the question of the tax treaties and the fact that they will have to be renegotiated. Well, that is true; quite apart from the tax treaty with the United States, our tax treaties with all other countries have to be renegotiated because of the changes in the withholding taxes imposed in December, 1960.
Apart from the one with the United States, in the case of all others notice must be given before the end of June. Notice was not given before the end of June 1961. Notice was not given before the end of June 1962. When I became Minister of Finance last April one of the questions that was raised with me, and to which I gave considerable attention, was whether in June 1963 we should give notice to all these other countries that we intended to renegotiate our tax treaties with them, as we must do. I thought at that time it would be better to wait until this bill had been passed before giving that notice. It is perfectly obvious however this is something that has been hanging fire for three years, and that it must be attended to in the very near future.
I think, Mr. Chairman, I said all the treaties have to be renegotiated. There are one or two which do not, but certainly the majority of them have to be renegotiated. In the meantime-and I do not think this has been fully appreciated-the recipients of dividends from Canada in quite a number of countries have been getting their dividends tax, despite the fact that the law provides for a 15 per cent withholding tax, and has done so ever

since December 1960. They have got this income free of tax because these treaties have not been renegotiated.
I agree with the hon. gentleman that it is high time we attended to that particular piece of business, and I can assure him we propose to do so as soon as this bill is passed. As to the tax treaty with the United States, there is a provision in it that as soon as a higher rate than 15 per cent is imposed, then under United States law their withholding tax goes to 30 per cent.
As the hon. member suggested, we have had some preliminary conversations about this matter. As I said the other day, it was suggested to us that, first, these proposed changes in the withholding taxes do not become effective until January, 1965 and so, if I remember the words correctly, it was suggested that there was no immediate hurry. Second, it was suggested to us that it would be preferable from the standpoint of the officials who will be doing the renegotiation on the American side to wait until the bill had been passed. They asked me when the bill would be passed and I said, perhaps rather optimistically, that I hoped it would be passed by the middle of October. But things move slowly.


Stanley Howard Knowles: What year?


Walter Lockhart Gordon: That is my out because I did not mention any year. I might say I do not expect to be confronted with quite the arbitrary approach that I think the hon. member perhaps had in mind. After all, when this matter is examined, naturally we will point out that the withholding taxes are being reduced from 15 to 10 per cent in a number of cases, not increased, and that they are being increased from 15 to 20 per cent in a number of others but not effective until 1965. It is anybody's guess as to how these things will balance out exactly, but my officials are inclined to think that we will be collecting a little less rather than more in the way of withholding taxes on these dividends.
I think also that most people know that the amount of United States investment in Canada very greatly exceeds the amount of Canadian investment in the United States, and I daresay this point will not be overlooked in the negotiations. Certainly we will point it out. The hon. member was worried about certain Canadian companies that have subsidiaries in the United States. I have no doubt he had in mind Distillers Corporation, Hiram Walker and Gooderham and Worts.


George Clyde Nowlan: We have never heard of them down in the valley.


Walter Lockhart Gordon: Perhaps the hon. member is not interested in the products of these companies. I am sorry about that; possibly I can change his mind after this committee rises. But these companies naturally have been making representations, as they are nervous about the matter; and I can assure them and also the hon. member that we will be keeping their problems very much in mind. I am not quite as convinced as he seemed to be that it is so simple just to move out of Canada arid establish a head office in the United States. There are some technical problems about which his predecessor, who is now a leading counsel with a Toronto firm, might be able to inform him if the hon. member needs that information.


George Clyde Nowlan: I am looking forward to it.


Walter Lockhart Gordon: Perhaps I could call it one o'clock, Mr. Chairman.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
The Deputy Chairman:: When the committee rose at one o'clock we were considering clause 22. Shall clause 22 carry?


Francis Andrew Brewin: Mr. Chairman, there was an amendment which the minister proposed to put forward, I think, or if not, 1 do.


Walter Lockhart Gordon: There are in fact two amendments to this clause, Mr. Chairman. During the luncheon recess we had some discussion about this matter, and before we get on to the particular amendment perhaps I might be permitted to finish the remarks I was making in reply to the hon. member for Digby-Annapolis-Kings.
One of the points made by the hon. member was that he said he knew of no other instance where the taxing statutes were used in a way which was discriminatory, and that we and other countries have always used these tax statutes in such a way that taxes were applied equally. With the greatest respect I suggest to him that this may be true, but depending on the narrowness or breadth of the interpretation used. I remind him, to take a rather narrow example, that it was not very long ago that there were differences in the rates of withholding tax. The rate was 5 per cent in the case of dividends paid by subsidiaries substantially owned by corporations in other countries. The rate was greater in the case of dividends paid by other companies where there was not a very high degree of control. Certainly that form of discrimination existed, and I personally think that it was pointed in the wrong direction. I said that on many occasions to several
Income Tax Act
previous governments. There certainly was a differential in the rates and to that extent there was discrimination.
Following up the point raised this morning by the hon. member for Nanaimo-Cowichan-The Islands, he said that certain industries in this country have for many years received incentives or a form of reduced taxation which did not apply to other industries. I think the hon.' member suggested this gave the oil companies certain advantages. I think the hon. member for Burnaby-Coquitlam suggested that this was one of the reasons why the oil industry in Canada is pretty well dominated by foreign concerns. I am not going into the reasons why this form of incentive was given. I do not even propose to discuss whether, in the end result, it was not quite useful, because it did result in the development of our oil industry. I mention it because the companies which received most of the benefit were relatively few in number, and they were controlled in other countries.
I suggest this could be interpreted as a form of discrimination in their favour. I mention it only because to me all taxation is bound to be discriminatory. Parliament decides on the rates, and in their wisdom successive parliaments have decided to charge different rates in the case of individuals, depending on the amount of their total incomes. I do not suppose there are many hon. members of the committee who do not believe that a progressive rate of taxation as far as personal incomes are concerned is a reasonable way to redistribute income and to some extent redistribute wealth. In any event the progressive personal income tax is established in this country and I doubt very much that it will be abandoned in the near future.
I could give a number of examples to show that by and large there are many forms of discrimination in the tax statutes; I suppose it is inherent in the method of collecting government revenues, and always has been. Someone might ask why in this enlightened age we still collect customs duties. Other people may think, as I am sure some of my hon. friends opposite do, that we would be better off if there was no personal income tax. I do not think the hon. member for Nanaimo-Cowichan-The Islands would share that point of view, but others might.


Stanley Howard Knowles: When the minister refers to friends opposite, I think he should indicate what part of the house he has in mind.


Walter Lockhart Gordon: I do not think the hon. member for Winnipeg North Centre should be so sensitive. Any reader of Hansard would be able to tell from the context of my remarks which particular friends I was referring to

Income Tax Act
at a given moment. I am glad to say I have friends in all parts of the house; at least I hope so.
I do not think this issue should be interpreted as dogmatically as the hon. member for Digby-Annapolis-Kings did this morning. The question has been asked why it was necessary to increase to 20 per cent the rate of non-resident withholding tax on dividends paid by companies which do not have a degree of Canadian ownership and control. That was the phrase originally used. I should perhaps now say "foreign ownership" in deference to the hon. member for Greenwood. The government desired to provide a worth while inducement for non-residents to release ownership of some shares in those subsidiaries in Canada in which there is now little or no Canadian participation. Since the non-resident withholding tax falls directly upon the nonresident who owns shares in Canadian companies, it is the tax which can best be used to encourage non-residents to make way for a reasonable degree of Canadian ownership.
To be effective, a tax inducement of this kind must amount to more than a few percentage points. Accordingly it is proposed that a relatively low rate of 10 per cent be provided where dividends are paid by companies with a degree of Canadian ownership, and that a rate of 20 per cent, which is more than can be absorbed by foreign tax credits in most cases, be imposed after a reasonable period in those cases where the paying company has not acquired a degree of Canadian ownership.
I do not think it would be particularly profitable for me to review at this point what I have said on other occasions about this clause. The fact is that this is, as the hon. member for Burnaby-Coquitlam said, if I recall his words correctly, a timid first step in the right direction. I am not prepared, in view of what has happened in the last few months, to admit it is as timid a step as the hon. member has suggested, but I am prepared to say it is a first step and I would hope all members of the committee would support it.


Stanley Howard Knowles: What about the amendment?


Walter Lockhart Gordon: It has been proposed, Mr. Chairman, that instead of amending each of several clauses there be one amendment at the end which would deal with all the clauses and which would refer specifically to them and to the lines in the bill where the changes should be made. The amendment could be moved now.


Stanley Howard Knowles: I think that would be better. Otherwise we would have passed the clause and we would have to reopen it.


Walter Lockhart Gordon: Well, I will ask my colleague the Minister of Public Works to move:
That Bill C-95, an act to amend the Income Tax Act, be amended as follows:
1.	by striking out the expression "ownership and control" appearing in the heading immediately preceding section 105D of the Income Tax Act as set out in clause 22 thereof and substituting therefor the expression "ownership";
2.	by striking out the expression "ownership and control" in line 22 on page 18 thereof and substituting therefor the expression "ownership";
3.	by striking out the expression "ownership and control" in lines 35 and 36 on page 18 thereof and substituting therefor the expression "ownership";
4.	by striking out the expression "ownership or control" in lines 26 and 27 on page 20 thereof and substituting therefor the expression "ownership";
5.	by striking out the expression "ownership and control" in line 39 on page 20 thereof and substituting therefor the expression "ownership";
6.	by striking out the expression "ownership and control" in line 42 on page 20 thereof and substituting therefor the expression "ownership";
7.	by striking out the expression "ownership and control" in line 5 on page 25 thereof and substituting therefor the expression "ownership";
8.	by striking out the expression "ownership and control" in lines 40 and 41 on page 26 thereof and substituting therefor the expression "ownership";


Mr. Deschalelets:: I so move.


[Stage Direction]
Amendment agreed to.
Walter Lockhart Gordon: I think there is another amendment which the Minister of Public Works would like to move. It applies to the clause we are now considering. Between the resolution stage and the drafting of the bill certain words which were in parenthesis were omitted. They should be reinstated. The amendment reads:
That Bill C-95, an act to amend the Income Tax Act, be amended by striking out line 17 on page 18 thereof and substituting therefor the following:
"corporation (other than a non-resident-owned investment corporation) as, on account or in lieu of payment"


Jean-Paul Deschatelets: I so move.


[Stage Direction]
Amendment agreed to.
Jay Waldo Monteith: Before the clause as amended is carried, I should like to say a few words concerning this part of the bill. The minister indicated a moment ago that these provisions represented at least a first step. I suggest it is a first step down the wrong path. It occurs to me that the minister is approaching this problem in an altogether incorrect way. I appreciate that there is a problem. I under-we are now considering. Between the resolu-stand what the hon. gentleman is trying to do. My hon. friend from Digby-Annapolis-Kings, when he spoke before the recess, also said he appreciated the problem which the minister faces. We all do; but surely this is the wrong way to go about remedying it.
I think this is a retrograde step. I think it will be found unworkable, and in the few minutes during which I intend to speak I shall try to point out the inconsistencies

which it appears to me to contain. I believe this legislation is iniquitous and discriminatory. I suggest that an entirely different approach should be taken. Instead of penalizing people who wish to invest money in Canada, encouragement should be given to Canadian citizens to invest in their own equity securities. A more positive approach should be taken. The minister said this was a small step. I think it is a huge step in our relationship with other countries. I think the whole question should have been set aside until a report had been received from the royal commission on taxation.
The minister said my hon. friend from Digby-Annapolis-Kings had indicated that this provision would annoy people. Then the minister commented that whatever kind of tax might be imposed, some people would be annoyed. It is true that everybody is annoyed when a tax which they have to pay goes up by 1 per cent, or when some move such as this is made. But this particular provision does seem to me to be going off the wrong end. I agree with the statement made in the Globe and Mail of October 21, that this does appear to be an egghead approach.
My hon. friend from Digby-Annapolis-Kings said there were three subsidiaries of United States companies in his riding. I could name innumerable companies of this kind. I was talking to a representative of one the other day. His company had a lengthy lease. It did not expire for another year, and they had been about to exercise their option to purchase. Well, they are now reconsidering the whole move. The expression used to me in this connection was "Why should we do this when there appears to be a climate in which we are not wanted?" The financial climate in Canada today is such as to discourage foreign capital from entering Canada, and to discourage the holding of capital in Canada.
Even if the steps which are now proposed were in fact taken, what would be the result? What would happen if a company were to sell 25 per cent of its interest in Canada in order to take advantage of the 10 per cent differential in the withholding tax? What would happen to the amount for which they had sold the interest? Undoubtedly the parent company would take it out of the country, to the United States or whatever country was concerned. If they were going to sell any share of the corporation they would undoubtedly remove any savings they might have accumulated in this country, any surplus cash they might have, before they actually put a percentage of the stock on the Canadian market. John Meyer, a financial writer for a Montreal newspaper, has estimated that these savings might amount to as much as
Income Tax Act
$4 billion. This would, I feel, put the minister in a difficult position concerning his foreign exchange.
Another question that might be raised is, are Canadian funds actually available for the purchase of these equities if they are put on the Canadian market? Possibly some Canadian capital is available. However, in other cases those wishing to exercise their right to purchase some of these equities might have to borrow capital. They might go out of the country to borrow this capital. The interest payment on this borrowed capital might amount to more than the dividends if they had been left in the hands of the original holder.
I could go on, Mr. Chairman, pointing out these inequities. I should like, however, to give one small illustration in actual figures, which I believe to be true. As I understand it, if there is 76 per cent foreign ownership under the control of one person and 24 per cent Canadian, that particular company would have to pay the 20 per cent withholding tax. For the sake of argument, let us say a different company has 75 per cent held by one foreign person, 23 per cent held by another foreign person, and only 2 per cent Canadian. I understand, or my interpretation of the provision is, that this particular company would only pay the 10 per cent withholding tax. I suppose the company with the 76 per cent foreign control in one person and 24 per cent Canadian would be, as the hon. member for Digby-Annapolis-Kings has put it in the past, considered to be the bad boys, whereas the company with 75 per cent foreign in one hand, 23 per cent foreign in another and only 2 per cent Canadian, would be considered the good boys. They would only pay the 10 per cent withholding tax.


Walter Lockhart Gordon: May I ask the hon. member a question? I will try to put it in the form of a question.


Jay Waldo Monteith: I would be glad to be corrected if I am wrong.


Walter Lockhart Gordon: Then if I may correct the hon. member, 25 per cent of the stock would have to be listed on a Canadian stock exchange, the shares would have to be listed on the stock exchange, so Canadians would have an opportunity to buy them. The regulations of the exchange would require a substantial number of shareholders, or they would delist the stock.


Jay Waldo Monteith: Does the minister mean that 25 per cent would have to be listed on the Canadian stock exchange and that no foreigners could invest in it, only Canadians?


Walter Lockhart Gordon: No.

Income Tax Act


Jay Waldo Monteith: Then my original statement stands. I think a much more positive objection can be taken to this. My friends to the left may not agree, but I believe that consideration should be given to encouraging Canadians to invest in Canadian equities. We now have a situation where there is a deduction of 20 per cent on income tax on dividends received from Canadian corporations. Perhaps an increase in this amount could be considered as a positive approach. Another possible approach would be the broadening of the regulations under which insurance and trust companies are allowed to invest in equity stock. These provisions might create more Canadian interest in these equity securities and do it in a positive way rather than, as I claim, a discriminatory way which is going to discourage foreign capital investment which we feel is necessary.
This country is still young. The minister mentioned a moment ago the other sectors in which he indicated that perhaps he had not emphasized strongly enough the fact that he is trying to get foreign capital to come in here and invest in bonds rather than equities. I agree with this move. However, on the other hand he then penalizes them for investing in equities. Despite the fact that there may have been a day when other countries, for argument's sake, found that the borrowings on bonds, debenture debt with fixed interest rates was possible-despite this, I think that today if we want investment capital in Canada we have to give some encouragement.
I say, Mr. Chairman, that we are going completely in the wrong direction on this matter. I think this is unworkable. I do not see how the minister is going to regulate this. As I mentioned earlier, there was the one instance I pointed out of the 76 per cent foreign ownership on one hand and the 24 per cent Canadian, and that company still would have to pay the 20 per cent withholding tax. On the other hand the company with 75 per cent in one foreign interest, 23 per cent in other foreign hands and only 2 per cent Canadian would be considered the good boys and only pay the 10 per cent withholding tax. As one hon. member said, you do not even have to have 2 per cent Canadian, because all you have to have is 25 per cent of the stock listed on the stock exchange. You would not have to have any in Canadian hands, except for the qualifying directors.
As the hon. member for Digby-Annapolis-Kings has indicated in the past, this may well be a good field for lawyers. They will be receiving some great retainers. In fact at that time I would rather belong to that profession than the one to which the minister and I belong. There will be a gold mine

for the lawyers in the appointment of these dummy directors, and so on.
I reiterate, Mr. Chairman, that in my humble opinion one cannot regulate the flow of capital in this way. You cannot do it by legislation. I do not think it is logical. I feel that we are going to disrupt the whole business community, and we are going to frighten the business community. This has happened already. I agree wholeheartedly with what the hon. member said this morning concerning this agreement, but I am not going into detail on that matter right now. I am referring to the tax conventions and how they will have to be amended. Then at this moment, of course, we are facing the possibility of the imposition of a 30 per cent withholding tax on Canadian corporations which have subsidiaries in the United States.
Sir, I come back to the fact that it is not only my opinion but the opinion of those whose financial experience is much broader than mine that this measure is only going to further undermine confidence in our financial structure. It is an indication that this type of capital is not wanted. I mentioned an experience I had this week. I believe this provision will create the kind of financial climate that would give the appearance that this capital is not wanted in Canada, and I do not think that ought to be the case.


Norman Platt Lambert: There is one question that bothers me.


Lucien Lamoureux: Order. Perhaps, so that we may proceed in an orderly fashion, I ought to bring to the attention of the committee that the minister might want to move the amendment proposed earlier this afternoon.


Jay Waldo Monteith: He has done so.


Lucien Lamoureux: It is a general amendment, but I think the amendment should be related to each individual section. The amendment, therefore, reads:
By striking out the expression "ownership or control" in lines 26 and 27 on page 20 thereof and substituting therefor the expression "ownership".
By striking out the expression "ownership and control" in line 39 on page 20 thereof and substituting therefor the expression "ownership".
By striking out the expression "ownership and control" in line 42 on page 20 thereof and substituting therefor the expression "ownership".
Shall the amendment carry?


Norman Platt Lambert: I have one brief point to raise on clause 22, in connection with the matter of ownership and control, or ownership by Canadian residents. In a province such as Alberta memoranda of association are used, which provide that directors need not be shareholders. This is quite feasible and permissible. Therefore it is possible under the bill to specify that 25 per cent of the directors be Canadian residents, but they need

not own any shares. This does not provide Canadian investment in Canadian companies. I am sure this does not apply only in the province of Alberta, but I can assure the minister it is a device commonly used. The requirement of Canadian directorship can be followed without one blessed penny being invested in a company.


Walter Lockhart Gordon: It can, but the rest of the clause would then not apply. Therefore I do not see this creates a difficulty.


[Stage Direction]
Amendment agreed to.
Mr. Wahn:: I would like some clarification from the minister of the definition of "management or administration fee or charge" which appears on page 21 of the bill. My remarks are directed specifically toward the wording which appears at line 32 on page 21, which excludes from the definition of management or administration fee or charge "a specific expense incurred by the non-resident person for the performance of a service that was for the benefit of the payer."
Perhaps I could make my question specific by putting a specific case. Suppose a parent company uses its own employees to perform for its Canadian subsidiary an identifiable service, for example purchasing, expediting, assisting in contract negotiations, architectural services or engineering services. There might be a number of services customarily rendered by parent companies to subsidiaries, and if a parent company charges a subsidiary a reasonable fee, perhaps cost plus a reasonable allowance for overhead and profit but a reasonable fee, will such a fee be subject to the 15 per cent tax? In other words will such a fee be considered within the wording of the bill as "a specific expense incurred by the non-resident person for the performance of a service that was for the benefit of the payer"?
If the wording had covered a specific amount paid to the non-resident person for the performance of the service I would have no worry, but I would like some clarification from the minister of what is meant here, because it would indicate what is in mind is an actual out of pocket expense paid out by the parent company to an independent firm. Does it cover a service performed by the parent company with its own personnel, and does it cover a reasonable fee which might be cost plus an allowance for overhead and profit?


Walter Lockhart Gordon: The subsection provides that the expression "management or administration fee or charge" does not include an amount paid to a non-resident person at arm's length for services which are performed as part of the non-resident's business, for example engineering or architectural services performed for a Canadian company by a nonresident firm of engineers or architects. Also 28902-5-291
Income Tax Act
the expression does not include amounts paid to a non-resident to reimburse him for a specific expense performed for the benefit of the Canadian parent.


Norman Platt Lambert: This will only have the result of increasing the management fee charged to the Canadian subsidiary by the American parent to take care of the tax paid.


Walter Lockhart Gordon: I do not think there is any danger of that, and this has been the case since 1960 when the withholding taxes were changed. It was open to a parent company, instead of withdrawing a dividend from Canada on which that 15 per cent withholding tax would be paid, to take the money out in the form of so-called management fees. This will stop that; or if the money goes out in the form of management fees the 15 per cent tax will be collected. So far as the treasury is concerned it will now be protected. If the management fee is for a specific expense then it is a legitimate expense it will be treated in the same way as all other legitimate expenses and deducted from the Canadian company's income and not subject to the withholding tax.
Clause as amended agreed to.
Clauses 24 and 25 agreed to.
On clause 26-Dividend stripping.


Norman Platt Lambert: The other day I queried the minister about the possibility of retroactivity, as appears at page 4292 of Hansard for November 1, and the minister indicated he wanted to make sure that he did not have any retroactivity in this regard. However, if we look at the clause carefully we will see it is still open to question as to whether there cannot be retroactivity. In other words it is discretionary with the Minister of National Revenue to determine whether the series of transactions did or did not commence prior to June 13, 1963. What is really needed is a clear indication within the legislation that the beginning of the transactions shall be a matter of fact and not open to discretionary determination by the minister.


Walter Lockhart Gordon: I completely agree with this point. There is no intention at all that this should be retroactive in its application. I understand the hon. member for Digby-An-napolis-Kings would like to amend this clause by changing the place where the words "in the opinion of the minister" appear, by deleting them from line 17 and including them at the end of line 21. If the hon. member for Edmonton West would agree I would ask my hon. friend the Minister of National Revenue to move the amendment.


Norman Platt Lambert: That is fine.

Income Tax Act


John Richard Garland: I move, seconded by the Solicitor General:
That section 26 be amended by deleting the words "in the opinion of the minister" in line 17 and inserting the words "in the opinion of the minister" at the end of line 21 after the words "one of the purposes of which"


[Stage Direction]
Amendment agreed to.
Jay Waldo Monteith: Before the clause as amended passes, I notice that in section 138A there is some discretionary power given to the treasury board. Could any of the officials give the minister an idea of how frequently, if ever, this discretion has been used in the last number of years?


Walter Lockhart Gordon: I think the hon. member's question had to do with section 138 of the act rather than this particular clause. Am I right?


Jay Waldo Monteith: That is right.


Walter Lockhart Gordon: The officials inform me that provision has never been taken advantage of.


Jay Waldo Monteith: What I fail to understand is that if section 138 has never been taken advantage of, why do we need 138A at this time giving discretion to the minister? I fail to understand the reason for it.


Walter Lockhart Gordon: 1 am informed that under the old section it was necessary to prove that something was improper, which is perhaps a question of judgment. This provision is to cooper it up and, if I may say so again, to plug one of the most blatant loopholes in the Income Tax Act. There may be differences of opinion as to the amount of tax that anyone should have to pay on corporate incomes, but surely there is no difference of opinion, that we should not have a situation where one lot of taxpayers get off scot free while the others have to pay a high rate of tax. This clause is intended to stop that.


Norman Platt Lambert: I should like to ask one clarifying question. With regard to the provision for appeal found on page 24 of the bill, could the minister tell me whether it will be mandatory to go through the tax appeal board before going to the exchequer court, or will the taxpayer have the right, as now exists, to elect to go to the exchequer court directly?


Walter Lockhart Gordon: It will be just the same as it is now. The taxpayer will have the right to elect.


Jay Waldo Monteith: Is it anticipated that the department will be asked to give opinions? I know that in the past it has been impossible to get an opinion from the department whether such and such a deal was within the provisions of the law, and so on, or as to how it would stand tax-wise. As I understand

the situation, the stand has been that people should go ahead and make their arrangements and if they are then taxable they will be assessed. Does the department not anticipate, as long as there is this ministerial discretion, more pressure on the minister actually to make a decision on the possible transaction before it has taken place?


John Richard Garland: Mr. Chairman, perhaps I could say a word on this matter. For the proper exercise of discretion it is necessary for the minister to know all the circumstances surrounding the transaction or series of transactions, and this can only be known after the facts have been determined and each transaction has been completed. It will be recognized that the minister cannot exercise his discretion in advance or even find himself to exercise his discretion in a certain way in advance of the event. On the other hand, the officials of the taxation division are prepared, within limits, to discuss informally proposed transactions with taxpayers and their lawyers and accountants, but conclusions cannot be reached which will be binding on either the minister or the taxpayer.
I should add that any requirement imposed on the taxation division to provide a service of advance rulings would create a strain on the modest number of trained, qualified staff capable of this work, and would reduce the number of tax returns of wealthy individuals and important corporate taxpayers which could be audited each year. Any slackening in the already limited audit function could only result in the weakening of compliance and the loss of tax revenue.
None the less the taxation division officials, I want to emphasize, will be available for informal consultation. The government is prepared to look into the matter further if experience shows that the absence of advance rulings hampers the orderly development of business enterprises and the economy of the country.


[Stage Direction]
Clause agreed to.
Clause 27 agreed to.
On clause 28-Where corporation has degree of Canadian ownership and control,
John Richard Garland: I move:
That clause 28 be amended by striking out the expression "ownership and control" in line 5 on page 25 thereof and substituting therefor the expression "ownership", and by striking out the expression "ownership and control" in lines 40 and 41 on page 26 thereof and substituting therefor the expression "ownership".


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Title agreed to.
Lucien Lamoureux: Shall I report the bill?


Walter Lockhart Gordon: Just before you leave the chair, Mr. Chairman, I should like to thank you for your assistance and patience, and I should like to thank the members of the committee for their great help during the past few days.
Bill reported.


Mr. Deputy Speaker:: When shall the said bill be read the third time? Now, by leave?


Jay Waldo Monteith: Next sitting of the house.


Mr. Deputy Speaker:: Next sitting of the house.



CONSUMER CREDIT


Hon. J. Watson MacNaught (Solicitor General) moved:: That a joint committee of the Senate and House of Commons be appointed to inquire into and report upon the problem of consumer credit, more particularly, but not so as to restrict the generality of the foregoing, to inquire into and report upon the operation of Canadian legislation in relation thereto;
That twenty four members of the House of Commons to be designated by the house at a later date, be members of the joint committee, and that standing order 67(1) of the House of Commons be suspended in relation thereto;
That the said committee have power to call for persons, papers and records and examine witnesses; and to report from time to time and to print such papers and evidence from day to day as may be ordered by the committee and that standing order 66 be suspended in relation thereto; and that a message be sent to the Senate requesting that house to unite with this house for the above purpose, and to select, if the Senate deems it advisable, some of its members to act on the proposed joint committee.
He said: Mr. Speaker, there seems to be complete unanimity in the house concerning the desirability of passing as soon as possible this resolution relating to consumer credit. The fact that there are upwards of a dozen or so public bills on the order paper relating to various aspects of consumer credit would indicate the intense interest that hon. members have in this controversial matter. Articles have appeared in leading magazines and newspapers from time to time alleging, among other things, that exorbitant rates of interest are being charged by finance companies.
The terms of the resolution are broad enough to permit the committee to make a report on these allegations. If the resolution passes, as I hope it will, it is my intention to move that the subject matter of the various public bills on the order paper relating to consumer credit be referred to this committee for further consideration. In view of the desire of all hon. members that the resolution should pass without delay, I shall not delay its passage further.
28902-5-291i
Consumer Credit Committee


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, with respect to the resolution brought forward by the Solicitor General I should like to say that it deals with a situation that has been before the house on many occasions in the last number of years. In that regard I refer not only to the last six or seven years but to many years before that.
I believe the main difficulty in the case of all the consumer credit bills now on the order paper is the question of jurisdiction. In each instance where the matter of consumer credit arises there has been a conflict as to the division of responsibility between the federal government, with its responsibility for interest, and the provincial governments with their responsibility for contracts of a personal nature. For that reason I hope if the resolution is passed and the committee is set up it will be composed of people who will be able to deal with the difficult constitutional problem.
After the constitutional problem is settled there is also the difficulty of passing legislation which will prevent people from being foolish at a time when they are badly in need of finances. All the bills on the order paper now, as well as previous bills, if they have been opposed when they have come up for discussion have been opposed on the ground that you cannot legislate common sense into people when they are making a contract. A person who is in a very difficult financial position is prepared to pay a large sum by way of interest in order to get the money which he badly needs at the time. It has always been another difficulty that if we legislate too stringently in connection with consumer credit it may dry up the legitimate source thereof and force people to other means of securing money when they require it.
In summary, Mr. Speaker, we also do not wish to hold up the resolution, so I would simply say we are prepared to support it. We hope the committee will make a very complete investigation of consumer credit. There are items of legislation in the provincial legislatures along the same line, and I feel we will have to consider the provincial legislation also to see that we do not overlap. But as I say, we are in support, in general terms, of this resolution.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the hon. members of this group welcome the setting up of this committee because we believe it has before it an important task. The problem of credit is becoming increasingly important, both because of the fact that the amount of credit being used by the people of Canada is rising at an alarming rate, and also because of the fact that there is in this

Consumer Credit Committee business, as I suppose there is in every business, a small percentage of people who are so interested in making money that they really have no scruples or any friends. The newspapers of Canada from one end to the other have been filled with examples of people who have not only gone into debt to an extent they could not possibly afford, but in fact have been charged the most fantastic and exorbitant rates of interest. Recently the Financial Post carried a story about a recent immigrant to Canada who became the victim of a mortgage broker. This person borrowed $1,501 from the broker, and that is what he received; but he had to sign a note for $2,350, the extra $849 representing an arranging fee. After paying the prescribed $35 a month for three years he discovered that he still owed $1,580, which was more than he had borrowed in the first place. He was supposedly paying an interest rate of 7 per cent but he was in fact paying 30 per cent. There are dozens of cases on record along this line and there is no need that I list them.
This year the Ontario legislature appointed a select committee to inquire into the situation. They called before them mortgage brokers who testified that they had lent money on which they had charged interest rates of 80, 90 and 100 per cent. It is true the mortgage brokers claimed that they really did not know the interest rates. But that is not the important thing; the important thing is that people were forced to pay these rates.
I know this committee will have great difficulty, owing to the federal set-up of our country. Part of the responsibility for this question is federal and part is, of course, provincial. We had in the province of Manitoba until recently an act which provided for the orderly payment of debt. Under this act people who found they could not meet their obligations were able to go to court and were able to get the court to set the rate they could afford to pay their creditors, as well as the order in which they would pay. Within the last year or so the courts in Manitoba have ruled that that act was beyond the powers of the province and really came under the jurisdiction of the federal government. I think the committee should consult with provincial governments. They would also have the responsibility of calling in people who are in the credit business. I was going to say there may be people, but I think that is a little unfair: there are some legitimate people in this business, but there are some who are not. I do not think the whole business should be tarred with the same brush. I do not think the responsible and legitimate people should take, or indeed would want to take the responsibility for the misdeeds of the few. They should have the right 
to appear before this committee. For example, I saw recently a case where the head of a big acceptance company was arguing that the business had no objection to telling people what they would pay by way of return, but that it was impossible to state it in terms of simple interest. I disagree completely. However, the committee should hear all these people, and I hope when it reports back to the house the government will bring in legislation so that the kind of stories now prevalent from one end of Canada to the other, of people being gouged and mistreated, will disappear, and this whole practice be declared illegal and prohibited in the future.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I rise at this time to support the measure now before us proposing the setting up of a joint committee of the Senate and House of Commons to inquire into and report on matters relative to consumer credit. We find today that many Canadians are placed in the paradoxical position of living in the midst of abundance, yet facing personal problems of poverty and in many cases destitution. We like to brag about our high standard of living, but on the other hand we must face the unpleasant fact that even in this country there are thousands living just above the borderline of destitution. I think this is an indictment of our society and the economic system which now operates.
We in the Social Credit party have always maintained that the amount of purchasing power in the hands of the people should fairly closely approximate the reasonable price of goods and services available. We believe that is essential if we are to maintain our economy at the proper level. At the present time this is not so. We find the income earned by our people is further drastically reduced by substantial rates of taxation at all levels of government, which further reduces the purchasing power of the people. I feel this entire problem needs real consideration, and we trust that the terms of reference of this committee will enable it to go into all these relevant fields.
I am sure that a survey of the homes in our nation would indicate a shortage of many of those appliances and other items which have become commonplace to many of us. On the other hand, as I have indicated, there is a superabundance of these items in our stores and factories. The result has been that in order to try and acquire these appliances many people have gone so far into debt that they almost find it impossible to extricate themselves. The temptation to buy on credit is, of course, very real. Walk down the streets of our cities and towns and see the neon signs everywhere proclaiming the fact that you

can come in and borrow money, on supposedly reasonable terms and under very pleasant circumstances. But we do find that this contributes to the position in which many of our people find themselves when they buy on credit to such an extent their income is not adequate to cover the payments they must make. So we find that credit buying runs to between $3 and $4 billion, which is a considerable amount of money.
We have a proliferation of companies who are engaged in credit operations, and we do not object to that fact. However, there is increasing concern over some aspects of the problem, and this has been pointed up by the number of bills currently on the order paper, the subject matter of which we have been assured will be referred to this proposed committee for consideration. Most of us have received letters and other communications calling attention to alleged unethical practices indulged in by some of these companies. As the previous speaker said, we do not want to tar all these companies with the same brush because many of them are carrying on in a very commendable manner; but there are some which are not. I have received a communication in which attention is drawn to one of these practices. I hope I can refer this to the committee for consideration during its hearings. A man bought a piece of equipment. He got behind in his payments once or twice and was charged, seemingly, an exorbitant rate of interest. He then carried on his payments satisfactorily. But when he had almost come to the last of his payments he was told he must have the complete amount ready in two days. This placed him in an enormous impossible situation.
Circumstances such as this do arise from time to time. I believe many of those who are now engaged in the financing business would, themselves, like to clear up such practices. Many of them are trying to carry on their operations in an ethical manner and are concerned about others who, by their sharp practices, bring discredit upon the lot. I welcome the proposal to set up this committee and for our part we shall give it our full support.


Gilles Grégoire: Mr. Speaker, I must say that this resolution on the appointment of a committee on consumers' credit is most welcome.
I can say without fear of being contradicted that Canada's economy depends on finance, on credits and on loans. The federal government is up to its neck in debt-if the simile may be forgiven-the provincial governments, or at least most of them, are carrying a much too heavy load of debts, and the
Consumer Credit Committee same thing applies to municipalities, school boards-one of my hon. colleagues says that the same situation prevails among members -and private citizens.
When a child is born, the happy father rushes to finance companies and borrows some money in order to buy a crib, diapers and feeding bottles. When the child is old enough to go to school, parents purchase various items on credit in the stores or by mail order catalogues, and get 36 or 48 months to pay on the instalment plan. When the time comes to go to college or to the university, finance companies are visited ones again.
And when the time comes to get married, money is borrowed either to buy a house, or to purchase furniture for the bedroom, the living room, or to buy a car or refrigerator.
Having reached 35 or 40 a man buys a house through Central Mortgage and Housing Corporation; he is allowed a period of 35 years to pay back his loan, so that he will be 75 or 80 by the time he becomes the owner of his house.
This thing has come to a point where morticians tell people: "Die now, pay later".
Mr. Speaker, such is the situation which prevails. Finance is with us from our birth to our death, and a person has to pay interest during his whole life. Our Canadian citizens do not know how to get out of it.
When a citizen, a small business or a small industry are in the hands of finance companies, they often have to pay extravagant interest rates and commissions.
I do not think it would be an exaggeration to say that in our region of Saguenay-Lake St. John, we have usurers who take advantage of the small people, the small worker and the small farmer, possibly to a greater extent than anywhere else in Canada. We have seen individuals who, in order to borrow $2,000, gave a commission of $1,000 and signed promissory notes for $3,000, so that in three or four years, they sometimes paid back up to $5,000.
It is when Central Mortgage and Housing Corporation refuses to lend money to farmers, that usurers take advantage of the situation. Finance companies will do the same when they lend money to an individual to buy furniture, a car, etc.
The time has come to put an end to all that, but when you take a look at the interest rate of the federal government, you must recognize that they too are excessive.
For instance, Central Mortgage and Housing Corporation is still lending money at 6] per cent, while chartered banks are prohibited by law from lending at more than 6 per cent. Therefore, I consider that the federal government sets a bad example by lending money at 6{ per cent.

Northwest Territories Act
The object of the act is to enable the little fellow to build a house, but the federal government is the first to take advantage of him by charging him 6j per cent interest, while forbidding the chartered banks to charge more than 6 per cent, which it considers a reasonable profit.
The same is true in regard to the industrial development bank which, in certain cases, charges up to 7 per cent interest. I think this is an excessive profit, and we should examine what the federal government is doing in this field.
We might also-and I just mention it incidentally-look into the credit situation of the chartered banks. It would be an opportunity for us to discover who is creating credit in Canada and why credit is such a scarce commodity.
The resolution will enable us to call and question witnesses, and we have the firm intention to question those who are creating and making credit in Canada.
Mr. Speaker, those are the remarks I wanted to make to point out that this committee is needed, and also to show up to what point we should go to establish credit sources while trying to delve into the problem.
I hope that all hon. members sitting on that committee will carefully consider the credit situation and see to it that a sensible solution of the problem is reached.


[Stage Direction]
Motion agreed to.


Hon. Arthur Laing (Minister of Northern Affairs and National Resources) moved: the second reading of Bill C-83, to amend the Northwest Territories Act and to rename the said territories, and to effect certain consequential changes in the statute law with respect thereto.
He said: It is my intention in moving second reading of this bill to make a brief statement concerning the proposal which, taken together with the succeeding bill, is intended to bring a greater measure of self-government to the people of the Canadian north. I hope that if any of those who take part in this debate wander from the terms of this measure to the extent of discussing the bill which is to follow, you will pardon them, Mr. Speaker, because these two bills are part of the same plan.
Some members of the house probably think that we are creating history in Canada today when we propose to establish two new territories in this country. I hope there will be participation from all sides of the house
[Mr. GregoireJ
in the debate which is now to take place. We are dealing with the Northwest Territories, that remaining part of the Canadian frontier which is not within one province or another. I wish to remind hon. members, especially those who have not had the good fortune to visit this part of the country, what an almost unbelievable stretch of real estate we are discussing. This region embraces 1,300,000 square miles or about 34 per cent of all the land area of Canada. It is almost 1,800 miles from any corner, or any part, to the furthest opposite point of this vast territory. It is a region which we have found largely unmanageable even from a central position in Ottawa.
We have decided that the time has now arrived when an increasing amount of selfgovernment should be granted to the people who live there. We think the efficiency of government in every sphere will be improved by moving away from centralized government towards a position where there will be more government on the ground, as I have chosen to describe it. We think that in the territory as a whole the time has now arrived for us to extend a great new measure of authority so as to enable the inhabitants to conduct their own affairs. I say this in the light of the increasing investment in the north, the increasing population, the higher standards of education and the greater understanding among those who live there of the resources available and of what can be done with them.
It has been decided, therefore, to divide this immense territory into two parts. It is the thought of this government, as it was of the preceding government, that if self-government is to be extended to this region it must be brought to at least something like manageable size. In the proposals contained within these two bills consideration is first of all given, as one might expect, to the historic division of this great territory, that is its division by nature. For reasons which will be readily understood, we are paying particular attention to the facts of transportation. This is a country where transportation appears to me to be the limiting factor.
We have therefore, paid attention to the western side which we propose to call Mackenzie. Outlining the boundaries there, we have set them along the Mackenzie river and up to the border of the Arctic ocean. The division line is the 105th longitude of west meridian; proceeding from the 60th latitude northward until it reaches the Arctic circle, thence surrounding Victoria island and Banks island, to take in these two major islands. This is to be incorporated in the territory of Mackenzie.

Northwest Territories Act
I am satisfied that this particular area is quickly going to be able to take care of itself. It is preponderantly, with the exception of Victoria and Banks islands, below the tree line. I want to remind hon. members that when they go to the Arctic they will see the unbelievable significance of a tree line in this country. When you leave the tree line of Canada it is like having the water cut off. Indeed, there is a relationship between the tree line and water. The western part of Mackenzie, which we propose to set aside, is largely treed. It has a great many things in common with southern Canada. Within the next several years. I would think by October, 1965, it will have a railway to latitude 62.
I am delighted to know that as a result of amendments that were made to the Railway Act in 1952, the laid down cost of carlots in Hay River, as a result of the provision then passed that freight to all areas in Canada in carlots must not exceed one and one third times the transcontinental rate, will be the same rate as for a car landed at Calgary, Alberta. This is going to mean a tremendous result in my opinion, in that country. I think it will have the effect of supplying goods to the western north at a saving of $10 to $15 a ton. This, in turn, is going to have the effect of reducing the cost of living, reducing the cost of operation of companies in that area in search of minerals and of oil to the point that some properties which they judge to be uneconomic may well be brought into the economic sphere.
At Hay River, which was unfortunately badly devastated by a flood in May of this year, rebuilding has taken place. As I think I told the house last night, freight shipments on the Mackenzie, down to the mouth of the Mackenzie by water, are some 50 per cent higher in 1963 than they were in the shipping year of 1962. At latitude 62, or just below it, we have the huge investment in the Pine Point mine. It, too, will be served by the railway, which will have its terminus at Hay River, by a spur line taken off some few miles below Hay River and running east to Pine Point. An enormous expenditure is being made there by the parent company, something in the nature of $30 million, on a lovely townsite.
After you leave Great Slave lake and go down the Mackenzie, there are a great number of locations of increasing importance populated by people in increasing numbers who have confidence in their ability to stay there and make their way. I think that with the many treasures of the future in the Arctic, particularly in the western Arctic, tourism is going to be one of our great industries. I was glad to note that a private
company operating out of Hay River is setting in motion plans to have a tourist ship run on the Mackenzie river next year down to the Arctic. I would think it would be blessed with success from the start. It is exceedingly interesting country. One can, if he should get up, or should stay up, until 2 a.m. in the morning, still see the sun. There are situations there and people there of very great interest to Canadians from southern Canada.
In so far as the eastern Arctic is concerned, I must say at once that, due to the fact it is above the tree line, due to the fact that so far, in spite of investigations we have made, there do not seem to be comparable resources to those existing on the western side of the Arctic, the outlook for the future is more difficult. The fact is that, in spite of investigations made by our fisheries department and other departments, the amount of resources in the country seems relatively low in proportion to the people who are living there. Communication is exceedingly difficult. It is for this reason that in the bill respecting that part, in other words the residue of the territory left when we pass the Mackenzie bill, we have decided to retain the centre of government in Ottawa.
Let me remind hon. members that transport for officials, transport for those engaged in search of development of the country, is largely by airplane. It is costly and it is of such a nature in respect of the eastern Arctic that if one flies out of here, or from Toronto or Montreal to the north, there is no service either east or west to the various points up there. One has to come back to southern Canada and go from there to the next point in that country.
I do want to pay tribute to the indigenous people of the area. Canadians, by and large, did not know them 10 to 15 years ago. In the last 10 or 15 years, we have made a real effort to know them. Probably, in many cases, a selfish interest took us there because we were looking for resources other than people, but we found people there. I want to pay tribute to these people. I do not want to portray quite the terrible difficulties that were put before the house last night by the hon. member for Northwest Territories (Mr. Rheaume) who spoke of the unbelievable hardships with temperatures down below 50 or 55 degrees. I am as fully aware as he that the kind of average climate up there is not the climate that I saw in the months of August or September.
However, I believe that successive governments have done a good job of taking those things up there that we want to leave there and taking to these people an increasing measure of the amenities of life to protect them from the elements. I admit that there

Northwest Territories Act are quite a number of people, particularly on the eastern side of the Arctic, who today have no home to put over their heads; none whatever. There are probably-this is only my estimate based upon having made one visit-1,000 or 1,500 indigenous persons who have no shelter from the weather. In the future, Mr. Speaker, I am going to propose to members of this house that one of the prerequisites for talking to these Canadians will be that we talk to them out of the weather. I would propose to this house in the future that we should find some means of taking these unfortunate people in out of the weather, by the production of homes which we could put in there for a reasonable price.
I saw what I believe was called a 10 by 24. The hon. member for Northwest Territories may correct me if I am wrong. It is just that -a house 10 feet wide by 24 feet long. I saw, in a number of instances, not one, two or three families but probably four families living in that one house. I do not want members of parliament to decry that condition because that is better than having no house at all, a great deal better. I hope that in the future, in respect of these people, we can move into an era where we can say these Canadians have a home and shelter from the weather, in an area which does not have the most hospitable climate in Canada.
In addition to the extremely low temperatures, I am informed there are winds accompanying these temperatures. I was told that the winds range from 80 miles per hour to 100 miles per hour with temperatures many degrees below zero. There are Canadians who know far more about the north than I who say that, in the end, the eastern Arctic may come off best. When I was there this summer I saw them drilling for oil at latitude 75. I endeavoured last night to pay tribute to the companies who are putting risk capital into that area. One of these drilling companies expended $360,000 to bring their drilling equipment into the area. I think it behoves Canadians in every part of Canada to give some marks to these companies who are taking the risk in that territory, when they could invest money in southern Canada and have it secure.
I think that their contributions should be emulated by a great many more Canadians, and should be accepted by members of parliament in the spirit in which they are risking that capital. A great deal of money is in there searching for oil, and if they find the fields which geologists are confident are present, then there could be the situation that the real riches of the Arctic rest in the east instead of the west. If that should be the case I would be extremely happy because I am content in my own mind that the future of the western part of the Arctic is secure.
[Mr. Laing.l
I think our chief interest for some years to come is going to be in respect to the eastern Arctic.
I could go on to tell something about the populations. When these bills pass the house, and I hope they do quickly, as otherwise we will have no government in those territories, we will have in Mackenzie a territory so vast that there will be one person per 38 square miles, and in the territory of Nunassiaq we will have one Canadian per 200 square miles. The size of these areas is almost unbelievable, and their difficulties are great. The costs of doing or developing anything there are extremely high, and the problems of living in that climate are not easy.
I think these bills, supported by the council of the Northwest Territories by formal resolution at their council meeting in Inuvik in July this year, were developed not by this government but by our predecessors, out of resolutions passed by the council of the Northwest Territories, and I hope we move forward with them quickly as a very important new offer of self-government to the people in that area, to the extent that in the western area they will have a majority of elected members.
They will have a commissioner resident in the Mackenzie. They will have for the first time almost the same degree of self-government as the Yukon territory enjoys today, and I hope therefore, Mr. Speaker, we can move forward intelligently but expeditiously with these bills.


Gilles Grégoire: Mr. Speaker, I should to put a question to the minister-


Mr. Deputy Speaker:: Does the hon. member for Lapointe want to ask a question?


Gilles Grégoire: Yes, Mr. Speaker, to the Minister of Northern Affairs and Natural Resources. While the house is considering Bills No. C-83 and C-84 concerning the boundaries between the Mackenzie territory and the Nunassiaq territory, is it the minister's intention to propose also the marking of new boundaries with regard to the islands located within a three-mile limit of the territorial waters of the province of Quebec?


Mr. Deachman:: On a point of order, Mr. Speaker, the subject under discussion has to do with the internal boundaries of the Northwest Territories and not with the territory outside those boundaries, and in no way divides them. Therefore the question of the hon. member for Lapointe (Mr. Gregoire) would not be applicable to the two bills before the house. In further proof of the point

of order I have before me the British North America Act and selected statutes, and here you will see in the British North America Act of 1871, an act respecting the establishment of the provinces in the Dominion of Canada, in which it sets out how the boundaries of a province are to be altered. Further, you will find the Quebec Boundaries Extension Act of 1912, an act to extend the boundaries of the province of Quebec. It is under acts similar to this in relation to the British North America Act that I submit the hon. member for Lapointe would find an opportunity for the question he brings before the house.


Gilles Grégoire: Mr. Speaker, on the point of order-


Mr. Deputy Speaker:: I am just wondering whether we are not engaging in debate rather than discussing a point of order. I am not sure whether the minister wants to reply to the question posed a moment ago by the hon. member for Lapointe (Mr. Gregoire). If not, then I can recognize the hon. member for Edmonton West who wants to put a question.


Norman Platt Lambert: Could the minister advise the house what legal studies, if any, were made either from a constitutional or civil standpoint as to the implications of the proposed changes?


Gilles Grégoire: Mr. Speaker, I rise on a point of order. I had put a question to the Minister of Northern Affairs and National Resources, and we are now about to discuss another matter. I think it would be in order that an answer be given to my question before going on to something else. That is why I ask the Minister of Northern Affairs and National Resources to be kind enough to answer the question I asked him.


Arthur Laing: As I understand the question the hon. member wishes some assurance that the delimitation or fixing of the boundaries shall be made after some thought, inquiry and study is given to it. I am fully aware of the commitment made to the house earlier this year that the bill, after second reading and if it is the desire of the house, would be referred to a committee, at which time we could go into a great deal more detail. I am quite certain we on this side of the house will be happy to move such a motion at the end of second reading, if that is the desire of hon. members. I will say I do not know
Northwest Territories Act
the means whereby boundaries of provinces in Canada are changed, but I am quite certain a measure such as this would not be the avenue for such an act.
Considerable studies have been made-and this may answer the question of the hon. member for Edmonton West (Mr. Lambert)- and we have gone back to the act of 1912 wherein, in respect of these particular areas the prime minister of Canada at that time, on March 18, 1912, said in the House of Commons that it was the full determination of the government to retain the offshore islands in those regions for the purposes of navigation and defence. Indeed in 1912 there was an act which was reciprocal legislation between the government of Canada and the provinces of Manitoba, Ontario and Quebec in respect of the limiting and setting out of their boundaries. Certainly if changes were being made in the boundaries of the provinces, I am quite certain it would be by an act other than this. I want to say to my hon. friend that the limits of any province could not be altered without the participation of that province, and to tell him that we have had no representations from Quebec in respect of this matter.


Gilles Grégoire: Mr. Speaker, still about the same matter-


Mr. Deputy Speaker:: Does the hon. member wish to ask the minister another question?


Gilles Grégoire: As a matter of fact, I rise on a point of order. Since we have before us today two bills, that is bills 83 and 84, which are closely related and cannot be studied separately, because there is a direct and immediate link between the two, we have preliminary remarks to make on both of them before consideration of either one is undertaken.
The point I am raising requires a clearcut answer from the minister. Otherwise, I shall have no choice but to move that those two bills be referred to a special committee of the house for study. In my opinion, such a thing can be done, since that procedure has been followed in the past.


Mr. Deputy Speaker:: Order. The hon.
member will have an opportunity to make such a statement or proposal later.
I should remind the hon. member that the minister himself has indicated that, if it was the wish of the house to refer those bills to a special committee, as has been suggested, he would be agreeable. The hon. member for Lapointe will have an opportunity to make his comments when his turn comes up.

Northwest Territories Act


Mr. Pickersgill:: I wonder if I might have the indulgence of the house for just a moment. I apologize for being outside the house momentarily when this matter came up, but there was a discussion through the usual channels about what would happen when the second reading of these bills came up. It will be recalled that before the house adjourned for the summer recess I had given an undertaking that if the hon. member for Lapointe (Mr. Gregoire), or any other hon. member wished to do so, we would And some means of putting a certain question to a committee before the second reading was proceeded with.
As I said in the house the other day, the hon. member for Lapointe was good enough to tell me he would not ask us to do that, and he would agree to the second reading of these two bills if the government in turn would undertake to send both bills, once they got second reading, to the appropriate standing committee. I gave that undertaking in the name of the government, and that is what the government intends to do. We intend, if the house will agree to give second reading to these two bills, to send them both to the appropriate committee where they can be considered. That is a firm undertaking on behalf of the government.


Gilles Grégoire: Mr. Speaker, in reply to the Secretary of State, it is true that we are ready to let the two bills be referred to a committee of the house, but we insist that the two go together, since they are directly related to each other.


John Whitney Pickersgill: Agreed.


Gilles Grégoire: I must add one thing, however. The main reason why we are interested in those two bills, is that they concern the islands. We realize at this time that we might well be prevented from making our remarks, about those bills in committee, especially as far as the property of those islands is concerned.
That is why, before the bills are read for the second time, we would ask the Minister of Northern Affairs and National Resources to give us the assurance that consideration will be given to the question of our boundaries, of the boundaries of the Northwest Territories and especially of the Nunassiaq territory and of the islands.
If we agree to the first, the second is automatically agreed to. This bill with which we are concerned deals with the islands off the coast of the province of Quebec and is the second one under consideration.


If the Minister of Northern Affairs and National Resources can assure us that the problem of the boundaries of the Nunassiaq territory, that is the second bill also dealing with the boundaries of the province of Quebec, will be considered, we will then accept the suggestion of the Secretary of State.
But it is essential that we obtain a firm undertaking from the government that this matter will be looked into by the committee.


John Whitney Pickersgill: I understood that was precisely what the committee was going to study. It seemed to me that was the whole point.


Gilles Grégoire: No, Mr. Speaker, that is not what the Minister of Northern Affairs and National Resources just said. He said it was another problem completely. Another member over there said it was not in order in discussing these bills but that we might find another occasion to do so. We do not want another occasion. This is the occasion to study the boundaries of Nunassiaq territory.


John Whitney Pickersgill: While it might not be possible to legislate at this time, Mr. Speaker, I am sure it would be perfectly possible to study the matter, and I give the undertaking as far as I can on behalf of the government that it is the intention of the government, if the house will be good enough to give these two bills second reading, to refer the bills to the appropriate committee and to bring the officials there and anyone else within reason who can throw any light on any of these questions so that they can be studied thoroughly.


Gilles Grégoire: Including the islands?


John Whitney Pickersgill: Including the islands and including the mainland too.


Gordon Minto Churchill: Mr. Speaker, the discussion is becoming a little involved, but there is a basic misunderstanding here. The Secretary of State is quite correct in what he has said. He has told us this afternoon that the government is prepared after second reading to refer the bills to a committee, if that is desired. The hon. member for Lapointe has a special reason for wanting certain matters discussed by a committee.
But where the misunderstanding is creeping in is in this regard. As far as we are concerned, and I tried to make this clear on other occasions, we have certain reasons of our own for wanting the subject matter of these bills referred to a committee before second reading. There is a great difference between the two positions. Second reading involves agreement in principle and the bill then goes to committee for study. But due to a misunderstanding that occurred last July-and we

have been over this ground before, because we discussed the matter on October 11-the house passed the resolution stage expecting that a special committee would be set up to consider, or a standing committee would have referred to it, the subject matter of these two bills. That misunderstanding has not been cleared away.
We have reached the stage now where the government is asking for second reading of the bills and then reference to a committee. We still take the position that reference of the subject matter to a committee should be made before agreement in principle is given to the two bills. I do not want to enter into a lengthy discussion as to why this, that and the other thing should be done. Other people can do that. But that is the situation.
I understood the Secretary of State to say on October 11 that he would attempt to find some solution to that problem, but most of the discussion has centred on the argument of the hon. member for Lapointe with regard to the islands, with which I happen not to be concerned at the moment. If we can clear up the misunderstanding, perhaps we can get on with the job, but unless it is cleared up we cannot see our way clear to give agreement in principle to the two bills and then have them referred to a committee.


John Whitney Pickersgill: I wonder whether I could say a word on this point. I think there is still some confusion, notwithstanding the commendable effort of the hon. member for Winnipeg South Centre to clear it up. I cannot seem to find now the undertaking I gave in July. Perhaps somebody could find it in Hansard for me.


Gordon Minto Churchill: Page 1968.


John Whitney Pickersgill: The undertaking I gave in July, and I read the words again, had to do with the subject of the islands, not the subject matter of the bill. If somebody could turn it up we could look at the words. I do not know the rules very well but I am sufficiently familiar with them to know that if one refers the subject matter of a bill to a committee by amendment, that kills the bill. That is a rule of the house. It is not the case, of course, with private bills but it is the case with public bills. It was not our desire to kill the bill. If the bill is going to be killed we should go on to some other order of business. If it is the purpose of the majority in the house to kill the bill and to prevent the objective of the bill, which is to set up self-government in the Mackenzie valley, it is not the purpose of the government. It was not the purpose of the previous government which got this legislation all ready to be introduced into the house.
Northwest Territories Act
I may say that a motion to refer the subject matter of the bill to a committee would be wholly unacceptable to the government and would always have been unacceptable to the government. What I said in July was that the government, before the bills were brought forward for second reading, would find some means to refer the subject that the hon. member for Lapointe brought up, that is to say, the subject of the sovereignty over these islands, so that a study could be made of the situation.
In my view that question really is only related to the bill. It is not a part of the bill at all and it could be studied quite separately by a committee without affecting the ultimate progress of the bills through the house. But a motion that the bill be not now read a second time but that the subject matter be referred to a committee would kill the bill. I might say that this legislation is legislation of the previous government and represents the policy brought into being by the hon. member for Brandon-Souris (Mr. Dinsdale). If the house is not disposed to pass this legislation and if the members who supported the previous government are not now supporting that policy, the sooner we know it the better because there are other urgent things to be done.
The whole problem could, of course, be met on another occasion. If somebody wants to move that the subject matter be referred to a committee and thus kill the bill and end this matter for this session of parliament he is perfectly at liberty to do so in this free parliament, but here is the undertaking I gave on the 8th of July which has now been drawn to my attention. I said:
I do not think it would be possible to sit before the bill is presented, but I am sure we could make some arrangement to have the matter considered before the bill is proceeded with. What we want to get is the first reading of the bill so that it can be seen by the Northwest Territories council: but we would not proceed to second reading for a good long time. I would be quite prepared to give an undertaking that in some fashion or other this matter would be remitted to a committee so that the matters the hon. member wishes to raise could be raised, if that is satisfactory.
I think it is quite clear there that it was not the bill or its subject matter, but the subject that the hon. member for Lapointe had brought up that I had in mind and that I was prepared to find some means of bringing before a committee. But when the hon. gentleman removed that difficulty by saying that he would agree, on behalf of himself and his friends, to the second reading of both these bills if he got an assurance that that subject would also be considered in committee when the bills were considered I thought that solved our problem. That is why the government called this bill for today. But if it did

Northwest Territories Act not solve the problem, if other hon. members wish to make a motion, which they have a perfect right to make, that would have the effect of killing the bill, we will just have to see what will happen, of course, when that is done.


Gordon Minto Churchill: Mr. Speaker, in an endeavour to be co-operative in the house we lay ourselves open to an attack by the Secretary of State. If he has said something about killing the bill once he has said it six times. Let us hold the Secretary of State to the agreement that he made on July 8. He read part of his statement. I will read the rest of it. Let us not have any omissions. The Secretary of State just referred to the first column on page 1968. In the second column on that page this is what the Secretary of State said. Let us put it on the record again.
I will give the hon. gentleman the assurance I have already given the hon. member for Lapointe, that once these two bills are seen, if there is any demand from any quarter of the house that some of the matters in the bills or other matters related to them could usefully be reviewed by a committee, I will undertake to ask my colleagues to have this done, and I feel sure they would agree with me.
Then looking at this sentence-


John Whitney Pickersgill: Go right on and read the rest of the paragraph.


Gordon Minto Churchill: I intend to read every word in that statement.
In fact I am quite prepared to commit the government to putting a motion on the order paper for a reference to a suitable standing committee of the house to consider these matters before we proceed with the legislation itself.


John Whitney Pickersgill: That is right.


Gordon Minto Churchill: This could be done, unless hon. gentlemen would be equally well satisfied when they have seen the bill to having it read a second time and then having it sent to the committee for revision. I will undertake to discuss it with hon. gentlemen and meet their reasonable wishes in the matter.


Gilles Grégoire: Read the next paragraph.


Gordon Minto Churchill: Then on October 11 the issue came up again, and it was quite properly pointed out that it is not normal to refer bills to committees before they have passed second reading. Even then-


John Whitney Pickersgill: Would the hon. gentleman give me the page?


Gordon Minto Churchill: Yes; page 3469. The hon. gentleman admitted that he made the commitment in July in these words:
Mr. Speaker, there is absolutely no question that I did make a very precise commitment and I intend to carry out that commitment if there is any insistence on the part of any hon. member that I do so.
Then he said that that commitment was to a specific matter; but that is not what he

said in July. Then he went on to say that you cannot send bills to a committee before second reading, but that if a reference were restricted to the frontiers of the territories, that might be considered by a committee. The difficulty is that the Secretary of State kept putting his mind constantly to the particular problem raised by the hon. member for Lapointe (Mr. Gregoire) and we had great difficulty getting him to consider his commitment in July.
That is the situation we are in now. We are not anxious to kill the bill, but the problem, as has been pointed out from time to time in the house, is that people who live in these areas should have a chance to make certain representations. This is democracy and I think they should have that chance. It is surely not beyond the scope of ingenuity of the government to discover some method of having this problem considered before we pass second reading of these two bills.


John Whitney Pickersgill: Mr. Speaker, I think I should be permitted to reply directly to what the hon. member for Winnipeg South Centre (Mr. Churchill) said. If he would just refer again to the words of mine which he read, reported at page 1968, I said:
I will undertake to ask my colleagues to have this done, and I feel sure they will agree with me. In fact I am quite prepared to commit the government to putting a motion on the order paper for a reference to a suitable standing committee of the house to consider these matters before we proceed with the legislation itself.


An hon. Member:: Why did you not do that?


John Whitney Pickersgill: Because the only member who asked for that was the hon. member for Lapointe; and when he withdrew his request and no other hon. member made any such request to me I understood that we were prepared to go ahead with the second reading of both bills and refer them to a committee; and I so said on one occasion in the house when announcing the business. But I still consider that I am bound by that commitment, and if any hon. member feels that the government will not be carrying out the commitment or will be breaking its word, or that there is any other matters which should be raised-and the only matter I recall being raised in July when I gave the commitment was the question of these islands and the frontier-then I am prepared to move that we adjourn this debate at once, and I will endeavour to carry out my undertaking to the letter and consult with my colleagues, and draft some kind of motion, to put it on the paper and to have a reference. I will ask the help of hon. gentlemen opposite in an endeavour to get the kind of motion they want, to bring the subjects they want before a committee, and we will leave these bills on the order paper until such time as that is done.

I did give that commitment in the name of the government and the government is not going to break its word, or even appear to be breaking its word, to any hon. member. But the government is not prepared to accept an amendment which, under the rules we operate under, would kill the bill. We cannot do that. If hon. members feel that they are committing themselves to any principle they do not want to commit themselves to, by voting for second reading of the bill before such reference is made to a committee, I am unable to say what day such a motion could be brought up or how soon it would be possible to set up that committee. All I am saying is that I will carry out the undertaking I gave to get some kind of motion on the order paper which we can take up whenever we can. In the meantime we will just leave the legislation on the order paper, because obviously we cannot do both things at once.


Mr. Rheaume:: Mr. Speaker, on this very point, when the Secretary of State (Mr. Pickersgill) says that the request came from only one member I must draw his attention to the fact that as early as June 7 I had begun directing questions to the Minister of Northern Affairs and National Resources (Mr. Laing). As reported on page 780 of Hansard I directed this question to the minister:
In view of the far reaching implications of this measure-
That is, the bill-
-to the people of the north, will the minister assure me, and through me the people of the north, that he and his colleagues will consider the establishment of a special house committee to examine this proposal, in consultation with the people of the north, who after all are the ones most affected by the measure?
The Minister of Northern Affairs and National Resources replied at that time, in part:
I think that with regard to any possible change in the present policy of presenting bills to the house I will have to take the question as notice and make a further study. I may be doing that in a few days.
Subsequently the minister of northern affairs did suggest that this would be done.
On this topic generally, Mr. Speaker, I think I should point out to the house that, although parliament opened on May 16 of this year it was not until July 8 that the Secretary of State and house leader chose to introduce the resolution stage of this bill. I think hon. members should be aware that this was a mere 48 hours before the Northwest Territories council opened its sittings in Inuvik, Northwest Territories. At that time the house leader said to the house, in effect: "You must proceed with this immediately. Please don't debate it. We will give any kind of undertaking; we are short of time". I submit that there was no reason to be short of
Northwest Territories Act time, even at the resolution stage, because from May 16 the government knew the Northwest Territories council session opened July 10. It was left to within 48 hours of this event before the resolution was pushed through, with certain commitments. The commitments were that if any member of the house asked for a special committee the government would undertake to set one up. It would not have the effect of killing the
bin.
As recently as last night the hon. member for Brandon-Souris (Mr. Dinsdale) gave a precedent in this regard. If reference is made to Hansard for May 14, 1946, the house leader of that day, the Hon. Ian Mackenzie, referred a bill on reinstatement in civil employment to a standing committee before reaching second reading stage, with the concurrence of the house and without having the effect of killing the bill.
I think it is most important with this kind of legislation that we realize that no one in this house is asking for the bill to be killed. We are merely asking, and have been ever since I got into this house on June 1, that some opportunity, some vehicle, be provided whereby residents of the Northwest Territories-who I must say are not all in agreement by any means that division of the north is a good thing-have an opportunity to be heard. There is a wide disparity of opinion on that question, from pretty eminent individuals such as a judge of the court of the Northwest Territories and a former Liberal member of this house who travels extensively through the north, and who has said categorically in press statements and in decisions to juries recently that division will be a bad thing. I merely point out some rather highly placed and eminent people peculiarly suited to understanding the implications of this issue have asked for a special committee.


Mr. Deputy Speaker:: Is the hon. member speaking to the point of order?


Eugène (Gene) Rhéaume: Yes, I am. I am pointing out to the Secretary of State, in connection with his assertion that any effort to cause extra inquiry to be made would be interpreted as an effort to kill the bill, that we categorically deny this is in the minds of any of the members on this side. Rather, we are acting in response to requests received from many people in the Canadian north.


John Whitney Pickersgill: Does the hon. member feel that giving these bills second reading and then referring them to the committee will make the committee's deliberations any more restricted? If the bills are not given second reading and sent to committee, the committee

Northwest Territories Act will have nothing before it except such a motion as I might draft. What objection is there to giving these bills second reading? That does not make them law. Let them go to the committee and be subject to as full an inquiry as is desired. The government is quite happy to have that done.


Eugène (Gene) Rhéaume: The answer to that proposal is that many people in the north are not in agreement with the principle of the bill and they want to be heard. This does not mean the bills will not eventually be enacted. It merely means there is no point in going through a charade. What is the point of saying to them: "Come on down and let us know whether you think the north should be divided" when it has already been decided that this should be done, because approval has been given to the bill in principle.


Gerald William Baldwin: On the point of order, may I refer to the precedent referred to by the hon. member for Brandon-Souris and tell the house that that involved a government bill, Bill 54 concerning the reinstatement of the civil employment act. A motion was moved that the bill be not read a second time but that the subject matter be referred to a select committee. We are, therefore, reinforced in our thinking that this is a sound practice, unless there has been a change in our standing orders which would preclude such a course from being considered.
I have not the latest edition of Beauchesne, but I have the third edition, and at page 498 reference is made to a similar incident. An act to amend the Railway Act was introduced by the government and in the course of the debate an amendment was proposed that the subject matter be referred to a committee. The Speaker, I think it was Mr. Speaker Black, ruled that this was a valid amendment. An appeal was made from his decision, but the decision was sustained. This is to be found on page 501. If the only fear of the Secretary of State is that a motion of this kind will kill the bill, I think his misgivings might be allayed by these precedents.


John Whitney Pickersgill: May I ask the honourable and learned gentleman a question? He knows I have the greatest respect for his knowledge of the rules, a knowledge which I think is much greater than, my own. But I was not arguing that a motion to refer the subject matter of the bill to a committee would be out of order. I recognize, as I imagine does everybody else, that it would be in order. But I say it would, none the less, kill the bill.
Let the hon. member ask this question: What would the committee do? The committee would no longer have the bills before it. There would be nothing to come back to this

house but the report of the committee- no bill upon which this house could proceed. In some fashion, another bill would have to be introduced and we would have to start all over again with another resolution. The other bill might be identical in language to the one before us now, but it would have to be introduced with a resolution preceding it, it would have to be given first reading and second reading and then go to committee again. That is a process which this government believes to be totally redundant and this is why I ask the hon. member for the Northwest Territories what objection he has to our sending this bill to the committee, together with the other bill. The house can still defeat them on third reading if it wishes to do so. The committee could keep them in committee indefinitely, if that is its wish. Every argument could be used in committee precisely as it could be used if the subject matter of the bills were sent to it. But the bills themselves would be intact, so that after the committee had done its work they could come back to the house as bills, if the committee wanted them to go back, and be considered by this house.
If any hon. member wants to hold me to the undertaking I gave in the name of the government on July 8, that we would suspend this legislation but that I would draft a motion and put it on the order paper, a motion having to do in particular with the islands referred to by the hon. member for Lapointe, and with the question whether the territory should be divided at all, we should be ready to do that. However, I think it should be clearly understood what the consequences would be. It is not reasonable to hope that this legislation could possibly get through during this session of parliament. That process would inevitably involve delays. It would involve putting on the order paper a motion giving 48 hours' notice and it would mean finding parliamentary time in which to discuss the matter. Yet we could get the whole thing through the committee in ten minutes, right now, if we had a mind to, and it would not commit us to anything more. I appeal to the hon. member who, I feel, is conscientiously trying to represent his constituents to let the bills be given second reading. Let them go to the committee and then let us take all the time necessary.


John George Diefenbaker: We are listening to a speech, now, not to the discussion of a point of order. This is a suggestion by the Secretary of State as to what should be done, rather than an argument on a point of order.


Gilles Grégoire: On the point of order, I should like to say that whether the question of the islands is studied in committee before second reading or after second reading is

not a matter of importance to me. But I should like a clear undertaking by the Secretary of State that it will be possible to study this question of the islands and that it will also be possible for the government to amend Bill C-84 in accordance with the facts produced before the committee, even if the bills have been given second reading. If I could have such a clearcut statement from the Secretary of State I would be willing to accept his proposition.


Gerald William Baldwin: Surely, if this house could reach that degree of unanimity for which we often strive but which we too seldom achieve there could be an order of the house that the subject matter of the bills be referred to a select committee without prejudice to those bills being retained on the order paper to come up for second reading after the committee had completed its deliberations.
My reason for taking my present attitude is this: I have certain objections to specific parts of this bill. Some of the provisions are repugnant, I think, to certain residents in the territories. This is an omnibus bill containing a number of amendments. There are some with which I am in perfect agreement. With others, I am not. Consequently, I find it difficult to say I am in agreement with this bill in principle. This is why I put forward the suggestion I have just advanced.


John Whitney Pickersgill: I think the hon. member is perfectly right. There is no doubt that if the house wished to do so it could, by unanimous consent, have the subject matter of the bills dealt with by committee but leave the bills themselves on the order paper in a state of suspended animation until such time as the committee had completed its deliberations. This would really be doing what I said might be done on July 8, though in the somewhat more elegant form which the hon. gentleman has given to it.
I do not think the government would mind accepting a suggestion of that kind if there were unanimous consent, but I would defer to my colleague the Minister of Northern Affairs and National Resources. I feel sure he would be happy to agree, but perhaps he could say for himself whether such a course would be satisfactory to him.


Arthur Laing: My hon. friend's colleague, the minister of northern affairs, is not happy. This is legislation which was drawn up by the government under the leadership of the ex-prime minister of this country. Now we find members supporting the opposition taking the stand that we should place this matter before the committee before giving it second reading. There is apparent in that suggestion an unmistakeable determination by members
Northwest Territories Act of the other side of the house to see that progress is completely impeded.


John George Diefenbaker: You know that is not true.


Gordon Minto Churchill: You are spoiling it; that is not true.


Arthur Laing: The term of the council of the Northwest Territories ended yesterday or the day before.


John George Diefenbaker: Why didn't you get the
legislation on before?


Arthur Laing: Well, of course, this is the favourite argument of the right hon. gentleman. It was the argument of his colleague, the hon. member for Northwest Territories (Mr. Rheaume). On Monday night his colleague from the Northwest Territories berated the government for not introducing this legislation, and told us we were introducing it too late. Now, here we have it and could proceed within two minutes, but it must be delayed. We have to bring visitors down from the north. We have to have objections from people in the north. The hon. member from Northwest Territories spoke about various people, and incidentally, I shall not quote those people in this house because I think it would be improper for me to do so.


Eugène (Gene) Rhéaume: I rise on a question of privilege, Mr. Speaker, since the minister has mentioned my name. Is the minister aware of the fact that the Leader of the Opposition gave his word to the executive officer of the Liberal party that the legislation would go to such a committee? Is the minister aware of that, and since he is so very anxious to fulfil the commitments the previous government made, will he fulfil this one?


Arthur Laing: I have no objection to my hon. friend from the Northwest Territories playing both sides of the fence between Monday night and Friday night; none whatever. I just want to remind him of the consequences, because we are going to have no territories government up there. If he chooses to say to the people he is supposed to represent that he is not concerned over whether they have a government or not, that is his responsibility.


Eugène (Gene) Rhéaume: I rise on a point of order, Mr. Speaker. I am not supposed to represent them: I do represent them.


Arthur Laing: At this moment, I will be content to use the word "supposed", in the light of what has happened in this house recently.
I want to read into the record a resolution passed by the representatives of the Northwest Territories. These are the people elected by the people of the Northwest Territories

Private Bills
to represent them in the government of the Northwest Territories. This is what they said:
Whereas the council of the Northwest Territories has reviewed the bill to amend the Northwest Territories Act in order to create the territory of Mackenzie and the bill to create the territory of Nunassiaq, as given first reading in the House of Commons on July 8, 1963;
And whereas the bills embody the provisions requested in the resolution passed by the council of the Northwest Territories in its session in Ottawa in January, 1962, after more than two years of consideration and study, and are satisfactory in all respects to the council;
And whereas there will be great inconvenience if the bills are not passed by November 7, 1963, at the latest, with effective date for the establishment of the new territories from April 1, 1964, as provided in the bills;
Now, therefore, the council of the Northwest Territories respectfully expresses its appreciation for the submission of legislation to carry out the action that it has requested in the interests of the progress and development of government in the territories.
Then, my hon. friend from the Northwest Territories, which he says he represents, is quite prepared to obstruct in every respect-


Gordon Minto Churchill: You are spoiling it now.


Arthur Laing: I have no opinion on how much time should be used here in assertion and denial, but quite a bit has been used so far, and the result has been that these bills are being delayed.


John George Diefenbaker: Delayed because they were not introduced earlier when they should have been.


Mr. Deputy Speaker:: Order; pursuant to a recent order of the house, I assume it is the unanimous desire of the house that this debate be adjourned. Is that agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: It being five o'clock, the house will proceed to the consideration of private members' business as listed on today's order paper, namely public bills.



INTEREST ACT


Stanley Howard Knowles: the second reading of Bill No. C-10, to amend the Interest Act.
He said: I move the second reading of this bill so that my friend, the Solicitor General, can move an amendment to send the subject matter to the special committee set up earlier today.


John Watson MacNaught: I move:
That the subject matter of this bill be referred to the select joint committee of the Senate and

House of Commons appointed today to inquire into and report upon the problem of consumer credit.


[Stage Direction]
Motion agreed to.

Mr. Rodolphe Leduc (Gatineau) moved: the second reading of Bill C-55, to amend the Interest Act.


John Watson MacNaught: I move:
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons to inquire into and report upon the problem of consumer credit.


[Stage Direction]
Motion agreed to.


Stanley Howard Knowles: the second reading of Bill No. C-14, to amend the Small Loans Act.
He said: On behalf of the hon. member for Winnipeg North I make the same motion in respect of this bill.


John Watson MacNaught: I move:
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed today to inquire into and report upon the problem of consumer credit.


[Stage Direction]
Motion agreed to.

Gilles Grégoire: the second reading of Bill No. C-23, to amend the Small Loans Act (cost of a loan).
He said: On behalf of the hon. member for Roberval I should like to move the same motion as the hon. member for Winnipeg North Centre.


John Watson MacNaught: I move:
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed today to inquire into and report upon the problem of consumer credit.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The house resumed, from Friday, June 14, consideration of the motion of Mr. Orlikow for the second reading of Bill No. C-9, to amend the Small Loans Act (advertising).
Stanley Howard Knowles: Mr. Speaker, I rise to resume the debate on this so that a motion can be made for the subject matter to be referred to the committee.


Mr. Deputy Speaker:: Is that agreed?


Some hon. Members:: Agreed.


John Watson MacNaught: Mr. Speaker, I move, seconded by the Minister of Fisheries (Mr. Robichaud):
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed this day to consider the problem of consumer credit, for further consideration.


[Stage Direction]
Motion agreed to.
John Watson MacNaught: I wonder if I could have the unanimous consent of the house to have several of these bills called in order that they may be referred to this committee?


Some hon. Members:: Agreed.



BILLS OF EXCHANGE ACT


Stanley Howard Knowles: the second reading of Bill No. C-33, to amend the Bills of Exchange Act (instalment purchases).
He said: On behalf of the hon. member for Timiskaming, I move the second reading of this bill for the same purpose.


John Watson MacNaught: I move:
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed today to inquire into and report upon the problem of consumer credit.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed from Friday, June 7, consideration of the motion of Mr. Scott for the second reading of Bill No. C-6, to provide for the control of consumer credit.
Stanley Howard Knowles: Mr. Speaker, may I revive the debate on the second reading of this bill so that the Solicitor General can move the appropriate amendment.


Some hon. Members:: Agreed.


John Watson MacNaught: Mr. Speaker, I move, seconded by the Minister of Fisheries (Mr. Robichaud):
Private Bills
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed this day to consider the problem of consumer credit, for further consideration.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed, from Friday, June 28, consideration of the motion of Mr. Orlikow, for the second reading of Bill No. C-12, to amend the Bankruptcy Act (wage earners' assignments).
Stanley Howard Knowles: Mr. Speaker, may I resume the debate on the second reading of this bill so that a similar amendment can be moved.


John Watson MacNaught: Mr. Speaker, I move, seconded by the Minister of Fisheries (Mr. Robichaud):
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed this day to consider the problem of consumer credit, for further consideration.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the order:
Second reading of Bill No. C-100, an act to amend the Combines Investigation Act (Captive sales financing).
Mr. J. A. Byrne (Kootenay East):: Mr. Speaker, I wonder if I could resume the debate on this bill.


Gordon Minto Churchill: No, you have to start it.


James Allen (Jim) Byrne: If the house leader of the official opposition would move this, I feel it would be appropriate.


Mr. J. A. McBain (for Mr. Noble) moved: the second reading of Bill No. C-100, to amend the Combines Investigation Act (captive sales financing).


John Watson MacNaught: Mr. Speaker, I move, seconded by the Minister of Fisheries (Mr. Robichaud):
That the subject matter of this bill be referred to the select joint committee of the Senate and House of Commons appointed this day to consider the problem of consumer credit, for further consideration.


Stanley Howard Knowles: Mr. Speaker, I believe this is the last of the bills we are dealing with in this way this day, and before the motion is put I trust we can have the assurance that an early meeting of the joint committee can

Distribution of Industry be called, so that it can get to work on the tremendous amount of business we have given to it.


John Watson MacNaught: Mr. Speaker, I want to assure the house that every consideration will be given to activating this committee as soon as possible so that these bills, along with other matters relating to the subject of consumer credit, can be considered.


[Stage Direction]
Motion agreed to.


Mr. Robert C. Coates (Cumberland) moved: the second reading of Bill No. C-29, to provide for the development of certain provinces by the distribution of industry and for the reduction of unemployment therein.
He said: Mr. Speaker, it has been some time since I first introduced this bill, and in the interim steps have been taken by both governments, which have been of some benefit in providing tax incentives to various areas which have had high unemployment for a long period of time. However in my opinion the decent step of designating certain specific areas that will provide certain benefits for industries that locate within them, is too little and too late, from a maritime point of view.
We must take very comprehensive, realistic and bold steps that will give a guarantee of revitalizing the economy of the Atlantic provinces by ensuring that industries will look upon the area with interest because of the incentives provided. I do not feel that selecting certain areas in Nova Scotia and New Brunswick is going to do the job. I do not think it is very realistic for a government to tell the people of Prince Edward Island that they have no area within which incentives should be provided for the location of new industries, and that they should go it alone and try to compete against other areas in the Atlantic region because these other areas are faced with more severe problems than they are.
Only recently the Atlantic provinces economic council placed this matter before the royal commission on taxation, and stated that if areas were to be designated, then the whole Atlantic provinces should be designated as an area where special and very broad tax incentives should be provided. Certainly nothing government has said or done to date is as comprehensive as the action that would be forthcoming if the bill I have introduced were adopted.
I believe the statement made by the present Minister of Fisheries, (Mr. Robichaud) when

this subject was last debated in the house, should be looked at closely. I look forward to hearing from him in this debate later on. The Secretary of State for External Affairs, (Mr. Martin) and the Secretary of State (Mr. Pickersgill) also took part in that debate, and were most anxious to see the government of that day adopt it. I hope the Minister of Fisheries will fortify the remarks he made on that occasion and, as a result of the persuasion he must have with his colleagues, see to it that the bill is adopted today instead of being talked out.
There is much to be done in the Atlantic provinces, and there is much that can be done if the purpose that is embodied in this bill is adopted. I look forward to its being adopted by the government and to seeing great new development take place in the Atlantic provinces because of the incentives inherent in the bill.
Mr. Speaker, I would like to place on the record a portion of an editorial which appeared in the Fredericton Daily Gleaner of November 5, which says in effect what we need in the Atlantic provinces in the way of special tax incentives:
The federal government's tax concession policy, if it can be called that, is to pick a few scattered communities, declare them as high unemployment areas, and then give "qualifying" industries establishing in them a three-year corporate tax exemption. That is a most inadequate way of dealing with the economic ills of the Atlantic provinces. Such a policy stands about as much chance of checking rising unemployment as a popgun has of stopping a charging rhino.
The Atlantic provinces economic council would change all that. In a brief to the royal commission on taxation, it demands that the entire Atlantic region be designated as a single area where new industries can qualify for tax exemptions and other incentives.
This is neither a new request nor a new concept. Many maritime voices have made similar pleas throughout the years. And there have been many precedents for such measures. Britain, a number of European countries, and some parts of the United States have tried them with success.
The editorial ends by stating:
The principle of regionalism has to be applied here with the massive investment and the tax concessions that will change the standard of living of the whole area.
May I also point out that there is growing concern in the Atlantic provinces that as a result of actions taken to date by the present government we are going to fall behind to an even greater degree than has been the case in the past. Only recently we lost in effect $100 million in business with the cancellation of the frigate program, in that no alternative program was made available to the people of our area. It is estimated that for every $1 million of shipbuilding business made available employment is provided for 150 to 160 people. That means that the cancellation of

the frigate program has in effect eliminated the possibility of jobs for 15,000 to 16,000 people in our area.
Ours is not an area that can take that kind of blow. Ours is not an area that can look forward with any satisfaction to a decrease of investment in our economy. During the debate on the amendments to the Atlantic development board bill we heard what great things the $100 million fund would do for our area. We were told it would revitalize the economy of the Atlantic area. What are we to anticipate now, when we find $100 million in shipbuilding taken away from our area and then are faced with the subsequent announcement that new submarines for our navy are going to be purchased outright from another country?
This is no alternative to shipbuilding plans in the Atlantic provinces. This is no alternative to high unemployment in our area. This is no example of steps that are going to revitalize the economy of our Atlantic provinces. There are many more examples of similar treatment that we have received since this government took office.
This bill may help to undo a great deal of the damage that has already been done by the government. This bill has inherent in it possibilities for attracting new industry. I might say that the government of Nova Scotia, with its able premier, Robert Stanfield-


An hon. Member:: Who?


Robert Carman Coates: My hon. friend says "who" and I can understand why. He and a few of his Liberal friends would not know Premier Stanfield. They would have no idea who this man is who recently won 39 of 43 seats in that province. That is probably one of the reasons the Liberals received the beating they did. They are so out of touch with things in Canada today and in Nova Scotia particularly that they do not even know who the premier of Nova Scotia is. Certainly they do not have to be concerned, because the people of Nova Scotia know who he is and they know how to look after him because of the policies he has put into effect and because of the manner in which he has looked after the people of Nova Scotia. If only this government would take some of the same farsighted action he has taken, the hon. member and his colleagues from Nova Scotia would be in a far better position than they would be today if an election were called.


An hon. Member:: What about the last six years?


Robert Carman Coates: What about the last six years? The last six years in the Atlantic provinces have been six years of progress. It is only in the last six months that we have stopped
Distribution of Industry progressing and have started to go backward again. Ask the Solicitor General (Mr. Mac-Naught) who must have had to put up a tremendous battle recently. Thanks to the assistance he received from the two members from Queens the air base is going to remain at Summerside. Can you imagine a government, Mr. Speaker, even considering for a moment the elimination of an air base that is an integral part of the economy of Prince Edward Island? With a representative in the cabinet I could not imagine it. Certainly it is not the type of treatment that the Atlantic provinces received from the former Conservative government.


Mr. Olson:: On a point of order, Mr. Speaker, may I say I think the last remarks of the hon. gentleman were out of order but the point of order I wish to raise is far more important. After having studied some of the clauses of the bill I believe it provides for the appointment of additional government officials and therefore it is out of order for a private member to introduce such a private bill. I refer you, Mr. Speaker, to page 2093 of Hansard of July 11 last where the Speaker quoted Mr. Speaker Michener as having said:
Before calling on the hon. member or recognizing the hon. member, may I say that I feel it to be my duty to draw the attention of the house to the fact that this bill has some of the characteristics of a money bill or one that requires a resolution. I therefore feel that if the debate proceeds I should at least indicate the possible difficulties with a bill of this kind so that it will not be taken as a firm precedent for similar legislation.
On July 11 the Speaker went on to say:
On May 17, 1918, Mr. Speaker Rhodes decided that a motion to amend a bill to provide for the appointment of additional government officials was out of order as it involved an increased grant of public money.
This can be found in Beauchesne, third edition, page 439. As found on page 2094 Mr. Speaker went on to quote Mr. Speaker Cas-grain as follows:
When money is voted, the main conditions imposed on its expenditure are embodied in resolutions. All the circumstances concerning its destination form part of the appropriation with which they are considered and if any alteration is to be made it must be by the same process as the original resolution.
And still further, Mr. Speaker, and this is extremely important:
-the circumstances under which an expenditure is to be made are indivisible from that expenditure.
This quotation is taken from Mr. Speaker Casgrain, February 21, 1936. On July 11 last the Speaker went on to quote him as saying:
I am therefore of the opinion that the proposed measure has all the earmarks of a money bill and cannot be introduced by a private member. I declare it out of order.

Distribution of Industry
I draw this point to your attention, Mr. Speaker, for the purpose of being consistent with respect to which private members bills are going to be permitted and which ones are going to be ruled out of order. Several times during this session private members' bills have been ruled out of order because of the fact that "the circumstances under which an expenditure is to be made are indivisible from that expenditure". I think the house is seized-has accepted the Speaker's ruling on a number of occasions that any private member's bill or any public bill sponsored by a private member that involves the expenditure of money either directly or indirectly is out of order. As long as that ruling has been made with regard to some of the bills that have been brought forward I think we have to apply it to all of them.


Gordon Harvey Aiken: Mr. Speaker, with regard to the point raised by the hon. member may I say he used one word near the end of his remarks with which I agree when he said that the house is seized of this bill. I believe that is exactly the case. The bill has been called, it has been introduced, the sponsor has made his speech on it and half of the hour allotted for discussion of this bill has now passed. It seems rather late to raise an objection to the validity of the bill at this time. I would suggest that such a question should have been raised at five o'clock when the bill was called.


Horace Andrew (Bud) Olson: Out of courtesy to the hon. member who introduced the bill I wanted to hear his introductory remarks. While I was reading some of the clauses it became abundantly clear to me that in clause 5 there was provision for the setting up of a board and that no one could read the bill and honestly say to himself, after having read its provisions, that no expenditure of money would be called for by the federal government. As I have pointed out, it is certainly out of order for a member to sponsor a bill that involves any kind of public expenditure.


Robert Carman Coates: Mr. Speaker, I join with my colleague, the hon. member for Parry Sound-Muskoka (Mr. Aiken), in saying that if there was any objection it not only should have been raised before the debate started, but should have been raised some time ago. This bill has been on the order paper in successive sessions of parliament. It was debated in the house in 1961 and it is being debated today. Certainly the law officers who peruse these bills must have determined some time ago that there is no conflict here, that the bill is in order and should be debated in the house.


Mr. Moreau:: Before the debate is allowed to go on, a ruling from the Chair as to the propriety of this debate should be made.


Norman Platt Lambert: With the greatest deference I feel that, notwithstanding the caveat of His Honour when the bill was introduced and read for the first time that they would be reviewed at the time of second reading as to whether they are acceptable or not acceptable, the fact that the bill was called and allowed to proceed on second reading indicates that it is acceptable. To raise the matter some 20 minutes after debate has proceeded seems to me to be going about this in the wrong way.


Horace Andrew (Bud) Olson: I do not think that argument holds water, because item No. 4, which has been on the order paper since May 20 calls for a parliamentary proctor, and this is exactly the same type of bill which was ruled out of order when called on July 11.


The Acting Speaker (Mr. Batten):: With reference to the point of order which has been raised I have serious doubts as to the legality of the bill. It is true that when the industrial development bank was constituted it was not preceded by a resolution. However the Bank of Canada, which subscribes to the shares of the industrial development bank, was itself incorporated in 1934 by an act which was preceded by a long resolution. Furthermore, the last time the Industrial Development Bank Act was amended, as set out in chapter 50 of the statutes of 1960-61, the amending bill was preceded by a long resolution which began with the words: That it is expedient to introduce a measure to amend the Industrial Development Bank Act to enlarge the classes of loans that may be made under the act so as to include therein all business enterprises without limitation of the kind of business carried on-
In Bill C-29 now before the house there is provision to allow the bank to make grants or loans toward providing basic services and toward the establishment or assistance of an industrial enterprise. Furthermore, there is provision that the bank may make grants or loans in an area of persistent high-level unemployment and to relax their restrictions at the bank's discretion as to the type of enterprise and conditions of assistance. If it were thought necessary in 1961 that the measure to amend the act so as to enlarge the classes of loans which could be made should be preceded by a resolution, I am not sure that a similar measure could now be introduced by a private member in a different manner. It is true that in 1961 there was also an increase in capital from $25 million to $50 million; also an authorization to increase the borrowing authority of the bank, and other provisions. To say the least, this is a borderline case, but since the discussion has already started I will authorize a discussion of the bill. But I must indicate the

possible difficulties that a bill of this kind will present and that the same bill will not be taken as a firm precedent for similar legislation. I would consider it proper for the discussion, since it has started, to continue.


Robert Carman Coates: Since a good deal of time has been taken up on the point whether or not the bill is in fact in order, I do not intend to spend much more time discussing the possibilities which will be available in the Atlantic provinces if the bill is accepted and passed by the house. But I would urge upon hon. members to consider the intention of the bill and the fact that interest free loans are available to industries if they locate in areas of high-level and chronic unemployment, and to give every possible assistance in order to try and establish many industries in the Atlantic provinces as is possible through the very broad incentives available through this bill.


Mr. J. E. Lloyd (Halifax):: Mr. Speaker, I rise to speak against this proposed measure, but before doing so I wonder whether the hon. member who proposed the bill will inform the house who introduced a similar bill in 1961. Would he answer that question before I proceed?


Robert Carman Coates: Well, I suggest to the hon. gentleman that he pick up Hansard for 1981 and read it.


Norman Platt Lambert: On a point of order, Mr. Speaker, the hon. member for Cumberland (Mr. Coates) having resumed his seat cannot rise again with Mr. Speaker in the chair to answer questions. I think the hon. member will realize that.


John Edward Lloyd: It is not essential to my comments, except to observe that the hon. member did mention that a similar bill was introduced in 1961, which was then in order. It therefore surprises me that no action ensued during the period of time when the party of which he is a member sat on this side of the house.
Now, Mr. Speaker, when I examined this bill I intended to be somewhat analytical of its contents. It was my purpose to discover, if possible, something useful to the Atlantic provinces in this proposed bill. I prepared myself to see whether in some way we could salvage some progressive steps to be taken in the interests of the well-being of the economy of the Atlantic provinces. I fully expected that the hon. member who sponsors the bill would in due course present some comprehensive arguments in support of it. I regret, Mr. Speaker, to have to say on this occasion that I found very little or nothing by way
Distribution of Industry of constructive criticism of the economy of the Atlantic provinces which resolved itself into a constructive proposal presented in a bill. I did listen to a long dissertation on the capability of the hon. member to produce a bill by way of contrasting the program of the government of today. I find it rather difficult to believe, however, that any member of the house would be persuaded by such a spurious argument. I am sure the hon. member recognizes that the economic problems of Canada are very challenging ones, no matter where one lives, whether in the Atlantic provinces, in Ontario, on the west coast, or in the Northwest Territories about which we were speaking a short time ago.
If there is any doubt in anyone's mind about this, perhaps some reference to comments appearing in the Telegram for Thursday, November 7, might drive the matter home to all of us. The editorial is headed "Automation" and goes on to say that-
*-automation and other rapid technical changes hang over the economy like a cloud. Whether they will bring lush production and widespread human benefit, or unleash forces that disrupt and erode present patterns of human welfare, will depend on how well we prepare the ground for them in advance.
Now, Mr. Speaker, this bill is a very feeble effort to provide a tool for the government to meet the challenge expressed in this editorial. On the contrary, the hon. member was more concerned about eulogizing a recently elected provincial government than he was in attending to his duties as a present day member of this house. He made reference to the cancellation of a frigate program and referred to $100 million. His degree of accuracy is certainly open to question because, as I understand it, these particular vessels would not exceed more than $40 million each, and the greatest expectation in Nova Scotia was that they would be allocated one. Then there are the off-site problems-


Mr. Muir (Cape Breton North and Victoria):: How many frigates could there be in the Atlantic provinces?


John Edward Lloyd: We could have two, but if I said the Atlantic provinces I am sorry. There would be one in Nova Scotia. So that would make two, involving $80 million.


Mr. Maclnnis:: Mr. Speaker,-


The Acting Speaker (Mr. Batten):: Is the
hon. member rising on a point of order?


Donald MacInnis: The hon. member for Halifax (Mr. Lloyd) just referred to the hon. member for Cumberland (Mr. Coates) as eulogizing the premier of the province of Nova Scotia. I think it is quite clear to all hon. members that it was in answer to a question from one of the Nova Scotia members as to who Mr. HOUSE OF COMMONS
Distribution of Industry Stanfield was, and the hon. member was only providing him with the necessary answer.


John Edward Lloyd: May I say that my partisanship does not extend to the point where I refuse to acknowledge the abilities, the capacity and the objectivity of the premier of Nova Scotia. I am not as narrow in my partisanship as that.


Donald MacInnis: Would the hon. member permit a question?


John Edward Lloyd: I think I must advise the hon. member that after I have finished my remarks I shall be glad to answer any questions he may have.


Robert Muir: Do not be eulogistic, then.


John Edward Lloyd: I have been advised I should not eulogize. I shall attempt to restrain myself in that direction.
I think the motive behind this bill is a sincere one. I believe the intention is to focus attention on the serious economic needs of the Atlantic provinces. It is a matter of keeping constantly before this house the need to devote the attention and resources of the government to the development of those provinces. However, if the hon. member's motives are sincere, the remedy he proposes is a feeble one. I think the bill itself only confuses the present situation because the government of the day has already taken measures which largely serve the purpose he has in mind. The national economic council, proposed by this government, recognizes the challenge expressed in the editorial on the subject of automation which I read a few moments ago.


Thomas Clement (Tommy) Douglas: When are you going to appoint it?


John Edward Lloyd: As rapidly as possible, and more rapidly than the hon. member got round to doing things when he was premier of a province.


Mr. Robichaud:: And with more success, too.


John Edward Lloyd: I thank the minister for that observation. However, I see the hon. member for Burnaby-Coquitlam is greatly concerned about the early appointment of members of an economic council. He believes the government is right in setting up such a council. He thinks the government is taking a wise step and he wants to see it accomplished at the earliest possible date. We agree with that, but "early" is a relative term. It is a term which has relation to the processes of this house and to the way in which it operates-a process to which some of the newer members are only now becoming accustomed, not without a certain degree of frustration, because some of us recognize that there should be some way of

speeding up what might be referred to as our activity. We certainly think we should proceed with all possible speed to set up this economic council. It represents a basic step toward meeting the challenge of providing better economic housekeeping in Canada in the years ahead.


Thomas Clement (Tommy) Douglas: It will not provide one dollar, though.


John Edward Lloyd: The next measure for which this government is responsible is the setting up of the Atlantic development board.


An hon. Member:: Plenty of dollars there.


John Edward Lloyd: In addition, I am sure the amendments to the Income Tax Act must have been comforting to the directors of Industrial Estates of Nova Scotia. The president wrote to me recently indicating that this amendment would prove of great value in the establishment of secondary industry in Nova Scotia, at least. I am sure the same would apply to the province of New Brunswick. The decision makers in industry-I am thinking about them, now, not about the people who only speak in the House of Commons, but the men who have to take risks with their capital and the capital of shareholders given in good faith-appreciate that these amendments do offer attractions to encourage secondary industry to locate in the Atlantic provinces. These are some of the bold measures which the hon. member said we needed-though I notice he did not suggest anything except this somewhat feeble bill; I am even doubtful whether it is in order or not.
I have already mentioned the hundred million dollar fund for the Atlantic development board. I should like to mention another matter, namely the organization of the government and the redistribution of seats.


Donald MacInnis: On a point of order.


John Edward Lloyd: If hon. members consider the elements of the government's program as it was presented in the speech from the throne, they will see that great benefits are bound to follow from the aggregate of all these steps which have been taken and which are to be taken. I think they will find the government has supplied the answers to the economic needs of the Atlantic provinces.


The Acting Speaker (Mr. Batten):: Does the hon. member rise on a point of order?


Donald MacInnis: Yes. I am surprised I have been recognized. In addition to being out of order in his remarks, the hon. member for Halifax is out of order with regard to the position he occupies in this house at the moment.


John Edward Lloyd: I realize it is difficult for some members to place any value on anything this government proposes, and that it is hard for them to comprehend some of the measures which have been prepared to overcome the difficulties which this bill feebly proposes to meet.


Donald MacInnis: The hon. member for Halifax (Mr. Lloyd) points out it is difficult for members on this side to comprehend his position. That is precisely my point of order. He is speaking from somebody else's seat.


John Edward Lloyd: That is one of the things I have to learn in the house. I have seen people perform in a variety of ways. I have seen them turn their backs and put their hands out. I have seen them strip the backs from their earphones. I have seen them stand, raving, at the end of the aisle without objection being taken.


The Acting Speaker (Mr. Batten):: I must remind the hon. member that one of the rules of the house is that when the Speaker is in the chair members must sit in their own places. I hope we can get on with the discussion of Bill C-29.


John Edward Lloyd: The opportunity to speak in this house is a greatly valued one. It will not be too difficult to abide by the rules and I regret if I have violated them by stepping a few inches aside. I hope this rule will be observed by all members of the house in future and, of course, I shall be ready to speak to a point of order should the occasion arise.
To sum up-


Some hon. Members:: Oh.


John Edward Lloyd: The argument against the bill is a simple one. The government has now taken measures which render Bill C-29 unnecessary. It has taken the measures that are called for to provide the government with the tools it requires to attend to the problems of areas such as the Atlantic region. As I say, the bill reflects a sincere desire to draw attention to the needs of the Atlantic provinces, but beyond that it is without merit.


Robert Muir: My remarks will not be too long. I see it is five to six.


An hon. Member:: They won't be.


Robert Muir: I will conclude very quickly, probably before I even get started, in order to give hon. members an opportunity to vote for this bill.
Incidentally, before I commence these few remarks, I must say that I was actually astonished to hear the remarks of the hon. member for Halifax, the one with the blonde hair. He took exception to this bill, in spite of the fact he is one of those who genuflect and
Distribution of Industry worship at the feet of the Secretary of State for External Affairs (Mr. Martin) and the Minister of Fisheries (Mr. Robichaud), who were so loud in their praises of this bill when it was last before this house. They certainly did not see anything wrong with it then. It seemed to be in order, and seemed to be a wonderful thing.
In any event, as the representative from Cape Breton, which incidentally is the industrial heart of Nova Scotia and indeed the industrial heart of the Atlantic provinces, I am naturally very interested in the bill and the laudable objectives that would be achieved by its passage. As I have attempted to show, there should not be any difficulty about having this bill accepted by the present administration, because on March 24, 1961 when a similar bill was before the house, the present Minister of Fisheries said he was rising to give his wholehearted support to the bill which had been introduced by the hon. member for Cumberland (Mr. Coates). At the same time, the hon. member for Essex East (Mr. Martin), now the Secretary of State for External Affairs, supported the principle of the bill.
As has already been mentioned, the Atlantic provinces economic council has already requested that the whole Atlantic area be a designated area in order that industry may be attracted to the area. I suggest, too, that the passage of this bill would be a help. There are many other things that I should like to say concerning the bill, but because of the time consumed by the verbose member for Halifax my time is limited and I am unable to say all that I should like to say. I do want to see this measure brought to a vote and I want the members from the Atlantic provinces, regardless of their affiliation, to participate in the vote on this measure. After all, we are all from the Atlantic provinces and interested in what is good for the Atlantic provinces, whether we are Liberals or Conservatives.
Before resuming my seat I want to compliment the sponsor of the bill, as the hon. member for Halifax has done in some sort of way. Incidentally, someone has said, who is Stanfield? Well, he is the guy who left only three or four Liberal seats in Nova Scotia for seed, but let me assure the hon. members for Halifax that seed will not be fertilized for many years to come.


An hon. Member:: You are going to talk it out.


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

Supply-Labour


Robert Muir: Yes, but do not be too long.


Gerald Augustine Regan: Would the hon. member indicate to the house whether or not he feels a bill of this type is still necessary and would still have all the beneficial effects that he has conferred on it, in view of the fact that the Atlantic development board has now been granted $100 million and has been made an active, efficient organization through the enlargement of its membership. In view of all these things does the hon. member now feel-


Robert Muir: Yes, I certainly do feel, Mr. Speaker.


Gerald Augustine Regan: -that there is any need to go ahead with this measure at this time?


Robert Muir: I certainly permitted a question when one of your colleagues did not. This government has given with one hand and taken away with the other all the good that was done by the Diefenbaker government in the last six years.


An hon. Member:: Six o'clock.


Robert Muir: It is half a minute to six. I am sure we will recall that it was the member for Halifax who killed this bill.


The Acting Speaker (Mr. Batten):: Order; I must advise the house that the hour for consideration of private members' business has expired.


Eugène (Gene) Rhéaume: I rise on a question of privilege, Mr. Speaker. This afternoon, during the discussion of the Northwest Territories bill-


An hon. Member:: Six o'clock.


Eugène (Gene) Rhéaume: -I stated that the Leader of the Opposition (Mr. Diefenbaker), the prime minister of that day, had made a commitment to the Liberal association to have the subject matter of the bill considered by a committee of the house. The commitment, in fact, Mr. Speaker-


The Acting Speaker (Mr. Batten):: Order; I fear the hon. gentleman is not raising a question of privilege.
The business at seven o'clock will be the consideration of the estimates of the Department of Labour. Would the house agree to going into committee now?


Some hon. Members:: Agreed.

The house in committee of supply, Mr. Batten in the chair.


Herman Maxwell Batten: 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 p.m.
Lucien Lamoureux: Order. I understand the hon. member for Northwest Territories would like to raise a question of privilege.


Eugène (Gene) Rhéaume: Mr. Chairman, this afternoon in the course of the discussion on the Northwest Territories bill, I misinformed the house when I stated the right hon. Leader of the Opposition, when prime minister, had made a commitment to the Liberal association of the north to have the subject matter of the bill submitted to a special committee of the house for consideration.
The commitment in fact was made to mayor E. R. Horton of Yellowknife, and in his capacity as mayor of Yellowknife rather than in his capacity as an officer of the Liberal association. The letter referred to reads as follows:
Ottawa, February 1, 1963.
Dear Mr. Mayor:
I know my colleague, the Honourable Walter Dinsdale, has been in touch with you in regard to the same matters as you raised in your letter to me of January 10th. I am informed that the Northwest Territories council favours Fort Smith for the capital of the proposed new territory of Mackenzie when it is organized.
However, I have noted what you have said in your letter and would think that when the legislation is brought in, arrangements could be made to receive the views of any interested groups in regard to the questions of the capital and such other matters as may arise.
I am.
Yours sincerely, John G. Diefenbaker



DEPARTMENT OF LABOUR

[Stage Direction]
1. Departmental administration including grants as detailed in the estimates and the expenses of the international labour conferences, $1,290,400.
Mr. MacEachen:: Mr. Chairman, in introducing the estimates of the Department of Labour I should like to make as brief as possible a statement on the work of the department. Members of the committee will realize that in the course of this session labour matters have received quite exhaustive treatment, and that the opportunities which have been provided on two supply motions, and in the debate on the trusteeship legislation, will not make it necessary for me to enter into the detail that might be necessary in the absence of these other opportunities.
On Tuesday of this week the house as a whole had an opportunity to deal with quite

a number of matters relating to the Department of Labour. It will be my endeavour not to duplicate what was said on that occasion. I will confine my remarks to putting to the committee some views on the activities of the department as a whole. Last Tuesday I told hon. gentlemen that when introducing my estimates I would make a general statement with respect to the Minister of Labour's responsibilities in connection with employment and unemployment.
I think that in the house, and elsewhere throughout the country, the Minister of Labour tends to be held responsible, sometimes one would think exclusively, for the problems of employment and unemployment, and I thought I might indicate my conception of the role of the minister in this important field. First of all, I would suggest that the Minister of Labour has the responsibility for reporting to the House of Commons on the level, character and source of unemployment.
He also has a primary responsibility, working with other groups, for the development, adaptation and efficient utilization of manpower resources, and effective measures of this kind can contribute to the promotion of employment and to the prevention or reduction of unemployment. In addition the minister and his department can help contribute to this reduction or prevention by encouraging short run measures to create employment opportunities. These are clearly responsibilities which fall mainly on the Department of Labour.
To move to a broader sphere, it must be understood that so far as unemployment results from a failure of demand to employ fully all available and qualified labour supplies-and this is the case to some extent today-the Minister of Labour's responsibility for the level of unemployment, so far as the federal government is concerned, is shared with his colleagues. Primarily, responsibility for government action to stimulate demand sufficiently and to promote long term economic growths, rests with the government as a whole.
Several major government measures to help stimulate the economic growth of the country have already been discussed in the House of Commons. Opportunities arising from the minister's primary responsibilities in relation to unemployment and economic growth involve the training and development of the nation's youth to meet the requirements of the economy, the upgrading and training of the labour force to meet industrial and economic change, and the development of measures to create more employment opportunities at specific periods such as the winter, when seasonal unemployment is high.
28902-5-292
Supply-Labour
The young people now in our educational and training systems will need to be equipped for the rapid changing conditions characteristic of the Canadian economy in an age of technological and industrial change. This will involve continuing assistance by the federal government to support the provinces in developing technical training programs for youth and adults. This is a necessary form of investment as an integral part of the process of economic growth and employment creation. A well trained and adaptable labour force not only is a necessary element of growth but also plays a role in stimulating growth itself.
Rapid economic and technological changes today require great ability on the part of employed workers to adapt and adjust in order not to be replaced as their skill and educational levels become inadequate. If the labour force is not upgraded and adjusted to changing employment requirements, a greater volume of structural unemployment will accumulate. Therefore active programs in cooperation with the provinces are essential ways to upgrade the employed, and the training of the employed labour force to facilitate its adaptation to technological change. Seasonal unemployment will continue to push up total unemployment in Canada, particularly in the winter months, and there is scope for further governmental action in this field. Similarly cyclical unemployment will continue to be a problem and will require short term direct action to create employment in slack periods. The formulation and execution of manpower and development programs of these kinds clearly require a close working arrangement with other government departments and agencies on all levels and with non-governmental groups. Similarly, the Department of Labour must maintain a close consultative relationship with these public and private agencies and develop those aspects of government economic and social policy which have an important bearing on employment and manpower resources.
Finally, the Minister of Labour has important statutory responsibilities for carrying out research and current analyses of manpower development, employment and unemployment in the Canadian economy. These include undertaking research and presenting appropriate information and observations designed to assist in the formulation of government policy in this area. It also involves informing the public in an objective manner of current and future labour market and employment developments.
I should now like to turn to a number of specific activities for the current fiscal year. The committee will be asked to provide $220,831,000 in the main estimates, $47,967,000

Supply-Labour
in supplementary estimates A and $60,650,000 in supplementary estimates D. Of this total the Department of Labour itself requires $225,998,000 and the unemployment insurance commission $103,449,000. The combined figure for the Department of Labour and the commission represents a decrease of approximately $30 million over the 1962-63 main and supplementary estimates. In referring to the 1962-63 estimates I should point out that the final supplementary estimates for 1962-63, which totalled $62 million, are not shown on page 176 of the blue book which hon. members have before them. These supplementary estimates were released after the main estimates were printed.
I should also like to bring to the attention of members of the committee a reduction which I think is possible under item 30 of the main estimates. This item can be reduced by $5,000. Instead of requesting $525,700 as appears in the printed estimates, a careful review of our cash requirements indicates we shall require $520,700. This reduction of $5,000 is to be made in the primary vote, payments to provinces pursuant to federal-provincial farm labour agreements, which appears on page 183 of the details of services.
A word about administration. The first vote covers the costs relating to the general administration of the Department of Labour, international affairs and the women's bureau. Item 5 in the estimates makes financial provision for the activities of the economics and research branch. Research in the Department of Labour plays a key role in illuminating the complex manpower and industrial relations problems which we face and in providing a sound, factual basis in the development of programs and policies. The branch is the central federal agency for analysis and research in the labour field. It conducts major surveys and studies of wages and working conditions, union organization, collective bargaining, professional manpower and employment and unemployment. The results of these studies are made available not only to the government but to labour and management groups, to international agencies and to the public generally through the Labour Gazette and the many special reports and publications issued by the branch.
In its activities the economics and research branch is to an increasing extent developing studies of departmental programs such as municipal winter works and training of the unemployed in order to assist in evaluating their effectiveness in helping to improve job creating potential.
I would ordinarily have a great deal to say about the industrial relations activities of the department, especially in an effort to
[Mr. MacEachen.l
provide a current review of major industrial relations problems, but in view of the rather full discussions we have had in the house, particularly in connection with the longshoremen's strike and the developments on the great lakes, it may be that it would be possible for me to allow members of the committee to ask specific questions with respect to the activities of the industrial relations branch.
It might be of interest to members of the committee to learn that an encouraging report has come out of Chicago today with respect to the possibility of restricting or eliminating the picketing of Canadian ships at that port and elsewhere. I am informed that the labour relations board of the United States has held discussions with the labour bodies in that country, especially the S.I.U., and that there is a strong prospect that some success will be had in overcoming the picketing in the port of Chicago and elsewhere. I do not have all the details nor a complete picture of the situation, but I thought I should indicate to the committee that there is at least an encouraging indication this afternoon with respect to this continuing problem which has exercised the attention of members of the House of Commons for some months now.
If I may refer to civilian rehabilitation, because of the relative newness of this program, item 25 of the estimates provides for the financial needs of the civilian rehabilitation branch which administers the provisions of the Vocational Rehabilitation of Disabled Persons Act. This act came into effect on April 1, 1962. New federal-provincial agreements under the act have been signed with nine provinces. Under this legislation the branch co-ordinates the activities of federal government departments and assists provincial governments as required in the establishment, development and operation of the national rehabilitation program for disabled persons. The branch collects and disseminates information regarding rehabilitation methods and services and maintains liaison with the provincial authorities, voluntary agencies and professional associations regarding rehabilitation services for the disabled.
Through the program an increasing number of disabled Canadians are being enabled to lead more useful and satisfying lives independent of public assistance or financial help from relatives. In the past few years the program has restored almost 10,000 disabled Canadians to usefulness. This group and their 6,300 dependents were costing annually more than $6J million for support. Collectively they now earn almost $18 million annually. In the period covered, without the benefit of vocational rehabilitation services they would have cost almost $24J million. Instead they have

earned more than $63 million in that period.
Earlier in the week I covered a large number of the special programs of the Department of Labour, including the municipal incentive winter works program and other new programs, and unless hon. members wish to ask questions I have no intention of holding up the committee by a discussion of items that have already been covered recently, especially this week.
Items 35 and 40 of the main estimates can be dealt with together because they provide for the technical and vocational training programs. These are well known programs in which hon. members have taken a very keen interest. Hon. members will have noticed that there is before us on the order paper a resolution providing for certain changes in the program with respect to capital costs and the contributions made by the federal government for the training of the employed and the training of the unemployed, and because the house as a whole will have an opportunity to go into these particular programs in detail when the resolution and bill come before it. I do not intend to go into detail in my statement. I would be pleased however to answer whatever urgent questions hon. members should like to ask this evening. I do not pass over discussing this matter in detail because of any lack of regard for its importance, but simply because hon. members will have an opportunity later to deal in detail with all these matters as they debate the resolution and the bill.
There is nothing further I wish to add in making my opening statement to members of the committee, because we dealt with so many programs of the Department of Labour earlier in the week that it might be better for the minister, in the interests of time and economy, to set a good example and not take any longer this evening in opening the debate.


Mr. Starr:: Mr. Chairman, my remarks in respect of the estimates of the labour department will be somewhat similar to those made by the Minister of Labour, because it is our intention to pass these estimates without any undue delay, although with careful examination. I only hope there are no obstructions from the government side in the expedition of these estimates, because I noticed as recently as last night that the minister of northern affairs, who had his estimates before the house, managed to talk them out and did not get them passed.
The Minister of Labour said that unemployment was dealt with exhaustively on Monday and Tuesday on the motion to go into supply. It is not our intention to deal tonight with this subject, because it was discussed on Monday and Tuesday, but I do not agree 28002-5-292i
Supply-Labour
with him that it has been gone into exhaustively. There will be ample opportunity, either in this session or the following one, for unemployment to be gone into exhaustively by the opposition.
At this time I should like to say that in my opinion, and in the opinion of other hon. members of the official opposition, the passing of supply is probably the most important business of the house. It is necessary that money be voted for the running of the country, and at times we find that other business comes before the consideration of supply. I think this is a mistake and I am sure the government will try to correct the error.
I do not intend to question the items listed in the estimates because I had some small part in their compilation, but I do want to make some remarks about certain matters which I noticed when I had this portfolio. The labour department has been considered in the past a poor cousin of all other governmental departments, but in the last five years or so I think its prestige has risen tremendously, until it now ranks as one of the most important departments of government administration. When I became minister of labour we had a yearly budget of something like $26 million, but it has risen to ten times that amount, simply because the labour department took on the responsibility of capital projects to help alleviate the unemployment situation, particularly during the winter months.
The minister made some remarks to the effect that he should not be responsible for the unemployment situation. I do not want to go into past history, but it is strange how one's attitude can change when responsibility rests on one's shoulders. I am glad to hear that this attitude has now been adopted, because when I was minister for some five and a half years it seemed to me as though I was a target for the unemployment situation by hon. members now on the government side, when they were in opposition.
The Minister of Labour mentioned that short term measures can be taken by the labour department to deal with unemployment during the winter months. This is entirely my idea, because during my term of office the labour department took many short term measures to deal with the situation. The minister also mentioned that during the winter months the seasonal aspect of unemployment will rise again, and has a tendency to raise the percentage of the unemployed over the whole year. While I agree with him entirely, this is exactly the sort of thing I tried to point out to the opposition when I was minister, but they paid no heed and treated the matter as though it were a year-round situation. However, there is a change

Supply-Labour
of attitude when you have responsibility, as I can readily understand, and I hope when the hon. member and his colleagues are back on this side of the house they will remember that burden of responsibility.
As I mentioned before, in the last five years the labour department has become one of the most important departments in government administration. I say this not because the departmental heads are in the gallery but because it was a great privilege to work with such a fine group of departmental officials. They were most helpful and one certainly does not need to prod them into action.
I think they accept responsibility willingly and with enthusiasm. During my five years of office we took on some large programs, such as the technical and vocational school building program, municipal winter works and the stepping up of a "Do it now" program which certainly has considerable merit. The training of the unemployed is, I think, one of the most important areas to which we should put our minds in order to help bring employment to the country. When I was told that 70 per cent of our labour force attained only grade eight education or lower it was an appalling shock to me. It was evident then that we should provide facilities and proper training for the labour force, simply because jobs available nowadays require 70 per cent skilled labour and 30 per cent unskilled. This 30 per cent is growing smaller each year, and consequently we must measure up to the demands of labour and endeavour to provide the necessary trades and skills demanded today.
Automation is another area, and it is interesting to recall that a study was made of this question, not only in Canada but in the United States. We should be very conscious of the fact that in Canada automation may be replacing workers at the rate of 2,500 people per week. Consequently we should take some steps to remedy that situation. It is regrettable that the government has not seen fit to put forward the bill which we had on the order paper dealing with manpower adjustment and automation. The government is going to deal with this matter by agreement. I feel that if they are to do this they should call a national conference of labour and management. I think you have to "sell" a program to people who are going to participate in it. You have to generate enthusiasm for it among those who will benefit as a result. It is not enough just to sign an agreement with the provinces and have so much money available for this program from the federal treasury. I think you have to "sell" the program in one way or another. I regret that this bill has not been put forward again, because I think it
IMr. Starr.]
would have sold this idea to those who would benefit from it. Even though the government has decided that the problem should be dealt with through agreement, I suggest to the minister that he consider holding a conference of employers and employees in order to discuss the merits of such a proposal.
With regard to industrial relations, this section of the department has always been very interesting to me. It is exciting, in that you deal with disputes in the country. I want to remind the committee that for the past six years now we have had no disruption of our national transportation system, and in this regard I think a great deal of credit must go to the head of the industrial relations department and his officers throughout Canada for their efforts to bring about this situation, or to at least hold the situation without suffering a further disruption. I might mention that during my term of office we had two very difficult situations to settle. One of these was concerning diesel locomotive firemen on freight and yard operations.
It had to be done in two stages, first on the Canadian Pacific and second, on the Canadian National systems. This was done successfully and without disrupting our transportation system. If we look across the border we find the same situation has been dragging out there for well over a year, possibly for two years, and that no settlement is in sight. A great deal of credit should be given for this. In the annual report of the department, mention is made of the settlement of a dispute involving 110,000 non-operating employees of the railway. For the first time in history the recommendations of the conciliation board were unanimously adopted. This was a historic occasion because, ordinarily, it is not done. I hope this is an indication of things to come and that from now on there will be an understanding that the report of the conciliation board shall be adhered to by both sides without the government being asked to deal with these questions. I think this is a matter for the parties concerned, and it is up to them to devise a system by which they can reach agreement.
I said earlier that training of the unemployed was most important. We took steps in 1960 to give an impetus to training of this type. If I remember correctly, the number of those trained in 1960 was 4,000. At the end of 1962, because of the impetus we had given to this program, the number had risen to 138,000. That is still not enough but it is certainly an improvement on the figure for 1960-almost ten times as many. This program should be continued so as to provide proper training for those who need to learn new skills.

The municipal incentive program, a new program which is only in its sixth winter, is a worth-while program. I shall not deal with it at any length except to read from the annual report, which says:
The municipal winter works incentive program during the 1962-63 winter provided an estimated 6,170.000 man-days of on-site work for an estimated 145,200 men. The previous winter's program had provided 5,870,000 man-days work for 147,700 men.
So this is a good program even though it was originally criticized. I went into some detail in respect to it during the debate on Monday and Tuesday. These are all the remarks I wish to make with respect to the estimates at this time. As I said earlier, I hope the government co-operates in getting these estimates passed as quickly as possible, the usual care being given to the expenditures involved.


David Orlikow: The minister made such a good beginning in helping to settle the longshoremen's dispute, and then in getting legislation passed with respect to the seaway union, that I was really disappointed by his introduction to the estimates of his department tonight. Gone are all the speeches in which we were told what the government was going to do to solve the unemployment problem. Gone were the promises we heard for so many years about what the Liberal party and Liberal minister would do for labour. We gather tonight, from what the minister had to say, that all he has to do is to administer a department which is doing everything necessary to meet the situation.
I intend to refer to certain measures which are badly needed and to which no reference was made tonight. We need some major changes in our labour legislation. We need some major new acts, some of which members of the Liberal party, when they sat on this side of the house last year, indicated they were ready to support. We hoped the government would bring in this legislation. I certainly hope the minister would give some indication about his intentions tonight. For example, this country needs a new fair wages act providing for union wages and conditions on all government contracts, covering both prime contractors and subcontractors. We need a maximum work week act providing for a 40-hour week. I am told that in 1919 spokesmen for the Liberal party promised to bring in a maximum work week act. Well, a long time has gone by since then but still no action has been taken. We need a national minimum wage act providing for a minimum wage of $1.25 per hour. Last year members of this group introduced a bill on these lines. It received support from the Liberal party of that time, but there is little indication of any action being taken on it by the government
Supply-Labour
in the near future. We need an amendment to the holidays with pay act. This proposal, again, received support from hon. members opposite last session. We should like to see the government proceed to bring in such amendments. We need amendments to the provisions of the Criminal Code which deal with the right to picket. We need amendments to those parts of the code which deal with trespass.
We also need real amendments to the Industrial Relations and Disputes Investigation Act. Workers in Canada, under the protection of this act and under the protection of the various labour relations acts in the provinces, are guaranteed the right to join trade unions. Employers are forbidden to dismiss workers who have joined unions or to penalize employees for belonging to unions. In fact, these are nothing but theoretical rights. Every year during the last ten years hundreds of workers across Canada have been fired by their employers because they were foolish enough to believe that the laws of Canada mean what they say, and that they could join unions without the risk of losing their jobs. In fact, employers have ignored the provisions of the act in this respect. Indeed, it seems that we have one law for the rich and another for the poor; one law for the strong and another for the weak. If a person commits an offence against the law, if he robs a bank, or steals a car, or sells liquor illegally the police will apprehend him and prosecute him. But if an employer breaks the law, what happens? The worker or his union is required to make a complaint to the labour relations board. After hearing the details of the case, the board may behave in a very magnanimous way; it can give the worker or his union the right to prosecute.
I do not need to tell the committee or the minister how useless this procedure is. It takes time, it takes money, and then the case must be presented before a judge who often knows little or nothing about labour legislation. Even when an employer is found guilty, the penalty is usually of such a minor character that all it amounts to is a licence to go on breaking the law.
There was a case in Winnipeg a couple of years ago which illustrates this point. A brewery workers union organized a PepsiCola plant in the city. The company did what so many other companies have done-they fired a number of the key people working in the plant who were active in the union. The union got the provincial attorney general to take action against the company under the relevant provision of the Criminal Code. The case was brought before a magistrate and the company was found guilty. What did the

Supply-Labour
magistrate do? He assessed against the company a fine of $100. This, of course, was of no use to the union. It did nothing to protect the workers. In fact, the union was wiped out.
It seems to me that what we need is a thorough revision of our federal law and of the provincial labour acts, so as to give our labour relations board the authority which the national labour relations board has in the United States-the right to issue an order to a company to cease from discriminating against workers, and the right to issue an order for the reinstatement of workers who have been dismissed. The board should have the right to say to a company: You should not have fired this employee and you must pay his back wages during the time he has been unemployed. Without this kind of amendment to the labour laws of Canada, it seems to me that these laws are really only a snare and a delusion. In fact, they only create difficulties for the workers who believe that we mean business when these laws are passed. Until we pass this kind of legislation, both federal and provincial, the workers are not going to get the rights which, in fact, they have been promised.
It seems to me that not only should the federal government introduce this kind of amendment, but it should take the lead in calling a meeting of the various provincial labour departments to seek the passage of this kind of legislation in other provinces.
Now, I want to deal with another provision which has been extremely harmful to the workers and trade unions of this country. I refer to the provision of the Criminal Code which deals with trespass. As a result of this section of the code, trade unions have been denied access to workers on great projects all across this country. The workers in the lumber camps of Quebec and Ontario, the workers at Benson mines at Blind River, the workers at Seven Islands, the workers on the great International Nickel project at Thompson, as well as workers in other areas where companies have obtained concessions to develop great resources, have been denied their rights. In some of these areas the housing is provided by the company and is located on company property. The company uses this excuse, that the workers are living on their property. They say that this is private property and union organizers are denied the right of access to the workers on these projects.
They were building a power plant at Kelsey in the province of Manitoba, and employing in the neighbourhood of 2,000 workers for two years. It was completely impossible for trade unions to get in to talk to these workers during that time. The place was completely isolated and the only way one could get in

was by railroad on a spur line off the Hudson Bay railroad. You could not get in there without a pass from the company. Naturally, the company would not permit any union organizer to go in there. I have sworn affidavits to prove that the workers were compelled to work as much as 100 hours a week for six months at a time. If they did not do so, they were told they would be dismissed. The fact is the employees worked these hours without any overtime paid, without any of the benefits they would have received had a trade union been there. The union was unable to get in before the project was completed.
Similarly at Thompson where the International Nickel Company gained control of a hundred square miles through an agreement with the Manitoba government, for a period of almost two years the trade unions were completely prohibited from entering that area. Not only trade unions but members of parliament, members of the legislature, were prohibited. At that time I was a member of the legislature. I want to tell the members of this committee that it took me about a month, going from minister to minister, from deputy minister to deputy minister, before I finally went into the area without getting permission. The local government administrator, supposedly working for the government of Manitoba, was in fact an employee of the International Nickel Company. He simply refused to let me or any union organizer enter. I got in by telling him I was going in and if he wanted to get the Royal Canadian Mounted Police to take action, he could do so, but I would refuse to pay any fine which the court might assess and I was prepared to go to jail. Of course, at that point they acceded to my request, because it would not have looked very good for International Nickel.
This is the kind of thing which companies are doing consistently. As we move to develop our resources in the north, we are going to see more and more of this type of thing. One of these days the unions are going to say that they are not concerned with the law because the law is being misused. They are going to exercise the rights supposedly granted to them under our labour laws. They are going to enter one of these areas, and there is going to be trouble; there is going to be violence. Perhaps after we have that kind of violence the government of Canada will wake up and pass the kind of amendments to the Criminal Code which are required to deal with trespass. I would think we would be wise enough to pass this kind of amendment before we have that kind of trouble.
There is one other provision with which I want to deal, and that is the use of injunctions under the labour relations acts, both federal and provincial. Workers have a right to strike. I know people become disturbed

when we have strikes, and that is understandable. Many people in Canada do not realize that 99.5 per cent of the labour agreements are renewed without strikes. We only hear about the times when there are difficulties, when there are strikes. In Canada, because of the labour laws we have, it is more difficult and takes longer to get into a position where you can legally strike than in almost any other democratic country. I am not going to discuss at this time whether this is good or bad. This is part of the heritage bequeathed to this country by that great labour statesman, Mr. Mackenzie King. There is this whole business of the need to have bargaining in good faith between employer and employee, the need to call in a conciliation officer; and if you do not reach an agreement the need under the law to establish a conciliation board, before a trade union can go on strike. Anyone who has worked in this field knows how long it can take before a conciliation board can reach any kind of agreement or get to the point where they make their report.
If a union does all these things, if it does get into a position where it can strike, and even if it is a legal strike, Mr. Chairman, injunctions may be taken out. Even though the Criminal Code sets out clearly what is legal in the form of picketing, we have an increasing number of employees going to the courts to seek an injunction before there is any difficulty, before there has been any illegal action. A few days later they go to the court and get these temporary injunctions made permanent. The courts, in fact, are rewriting the law by their decisions, and picketing is virtually becoming illegal. Recently there was a strike in the city of Ottawa which happened to concern a building project of this federal government. The employees of one of the subcontractors went on strike, legally and properly, as they were entitled to do. They established a picket line around the job, since that was the only way they could inform people they were on strike. The company went to the court and got an injunction. The judge granted the injunction on the grounds that in picketing this place they were also picketing the prime contractor whose workers were not on strike. The argument of the lawyer for the union to the effect that if they did not picket this site where they were working, they could not picket at all, was simply ignored by the judge.
I suggest that if this government means business they had better get busy and rewrite the provisions of the Criminal Code so that union workers who find it necessary to go on strike will have their rights protected. I think it would be a good idea if the Minister of Labour were to convey to the various
Supply-Labour
provincial ministers the idea of making a survey to see how many injunctions against picketing there actually have been in the various provinces in the past number of years.
These are some of the things which I hoped the minister would talk about in the field of labour relations legislation. I should like to spend a few minutes talking about the Department of Labour. When I say things which I shall say, I am certainly not being critical of the people who are working or have been working for the department. I think they do an excellent job when one considers the staff they have and the scope which they are given. It seems to me that if we are going to function properly in the complex urban society in which we are living, we have to do a better job of equipping the people of Canada to get and hold jobs which will be available in this country. In order to do this, it seems to me a number of things are necessary.
First of all, you have to reorganize our educational system for this century, to make it effective, rather than making it the kind of educational system which fitted us for the last century. It is not my intention to go into detail tonight. We are all happy with the beginning which has been made in the field of vocational training. However, can the minister tell us what has happened to the people who have taken training in these new vocational training schools? Have they been able to find jobs? Have we been training them in the right skills? I am certain the minister cannot tell us, because we have not yet set up that kind of research organization which we ought to have in the Department of Labour. We ought to have a much greater technical training program at all levels, beginning with the grade six level and going right up to the university level.
When we read what is happening in the United States, and when we read the summary-because that is all we have had a chance to see-of the Robbins commission report in Great Britain, I am sure the minister will agree that what we have undertaken up to now is really a very meagre program. I am not critical when I say this. We have at least made a beginning, but I would hope that in the not too distant future the government, in co-operation with the provinces, will undertake a basic examination of what is needed and stop using the excuse that it is the provinces' responsibility. Let us co-operate in building a technical training program which would meet our needs, and to do these things we require a different kind of department of labour than the kind we have had up until now.
I believe it was the former minister of labour who said the labour department used

Supply-Labour
to be the poor department of government. I think it is still the poor department, but it should be the most important department of government. The department has a role to play which it has never accomplished because we have never given it the tools to do the job.
The department has to stop being mainly a quiet referee in the field of industrial disputes. It should be made the major department of the government, and should be given the main responsibility to secure adequate employment and decent wages for every Canadian.
I was disappointed with the speech the minister made the other day, when he was proud of the fact that we have some 10,000 less unemployed than we had this time last year. Of course that is better than having 10,000 more unemployed; but in the year 1963 to have a quarter million people unemployed is a disgrace to the country, to the government and to parliament. It is something we ought not permit to continue.
If we are to achieve the aim of full employment, then the labour department should be given the job of taking over and reorganizing the national employment service. It should make that service an aggressive, forward looking instrument of public service. So long as the employment service remains at the tail end of the unemployment insurance commission it cannot do a good job. If anyone thinks it is doing a good job, then let him take a look at the yellow pages in any telephone book in any Canadian city, and compare the number of private employment agencies in business in Montreal, Toronto, Winnipeg, Vancouver and Hamilton in 1963 with the number which were in business in 1953 or 1948. If the employment service were doing a good job these private agencies would never get the business they have.
The objectives of a reconstituted national employment service in the labour department should be, first, to maintain a continuous review of Canada's manpower and to develop a long term plan for the effective deployment of the total manpower resources of the country.
I was disturbed tonight when the minister spoke of an extension of the department's role of counting how many people are unemployed and how many jobs are needed. I did not detect in his speech any note of urgency concerning aggressive action on the part of the department in planning for full employment.
Second, the reconstituted national employment service should ensure that everyone who needs employment has access to a job which makes full use of his productive capacity.
I commend to the minister a thought expressed by a man whom nobody in this house
[Mr. Orllkow.j
would consider a flaming radical, the head of a large business organization, the Canadian Pulp and Paper Association, Mr. R. M. Fowler. I am told he is also a pretty prominent Liberal, and I wish to read into the record a short paragraph from a statement he made before the special committee of the Senate on manpower and employment in 1961:
In the modem Industrial state, there is a responsibility of society to provide work for people who want work. It is no answer to make statistical arguments that the existence of some degree of unemployment makes other economic problems easier to handle-such as, for example, the control of inflation. Nor is it any answer to say that present unemployment afflicts only a minority of Canadians; for that minority it is still a major misfortune. These human losses are also national losses; the goods and services that a man could have produced on a day when he is unemployed are lost forever and the total wealth of the nation is reduced by that amount.
That is an excellent statement. A few years ago it would only have been we woolly minded socialists, who did not believe in private enterprise, who would have made that kind of statement; but Mr. Fowler is a pretty hard minded businessman, and the minister should consider his kind of thinking seriously and get on with the objective of obtaining full employment in Canada, rather than putting up with the 5, 6 or 8 per cent unemployment which we have experienced since about 1956.
Lastly it seems to me the reconstituted national employment service should ensure effective mobility of labour through adequate training programs and travel grants, to encourage real upgrading and reallocation of the labour supply.
To do these tasks the employment branch of the Department of Labour needs to have a staff trained and directed to place top priority on job placement today, as well as making plans to meet the new problems which are being created every day and week by automation and technical innovation. Only last week I read in an Ottawa newspaper that Mr. John Snyder, a former secretary of commerce in the United States, estimated that 40,000 jobs are being lost every week in the United States due to automation. I do not know if we can apply that figure proportionately in Canada, but I do not think it is far out, and we are only beginning to tackle the task of finding jobs.
I hope the minister will not continue to be as satisfied as he seemed to be tonight. The Prime Minister has told us about a few of the goodies which he hopes parliament will pass before Christmas, but when we come back in 1964 I trust the minister will try to do some of the things I have mentioned and, if

he does, the members of this group will support him and see that they are passed through the house.


Horace Andrew (Bud) Olson: My first words are to congratulate the minister on his appointment to the office he holds. I think members of the committee will agree that one of the very serious problems which faced Canada during the past few months was one directly involving the Department of Labour. I refer to the problem of the maritime unions on the great lakes, and I am sure all hon. members of the committee would wish to commend the minister for the manner in which he handled that situation.
I have been accused of commending the government on a number of previous occasions for certain actions which it has taken. That does not worry me very much. I also commended the previous government when I thought it deserved it, and when the present government deserves criticism I can assure it that I will be offering that criticism.
Tonight I want to deal with one very important matter, the problem with respect to the manifestation of the division between French and English speaking Canada. A large part of the root of this problem lies in unemployment and in low, or lagging, economic conditions in the province of Quebec. I spent last week end and the previous week end driving through various parts of Quebec trying to pick up local opinion with respect to this division between English and French speaking Canada, and from the conversations I had I am convinced that if we could do something to enhance the economic conditions in Quebec we would move a long way toward solving this division.
I wish to quote from a speech made by the hon. member for Iles-de-la-Madeleine as reported at page 4374 of Hansard for last Monday, November 4:
-I believe that as far as my own province, the province of Quebec, is concerned, unemployment and the economic situation of its population are probably the main cause responsible for the uneasiness which prevails in the federal-provincial relations and in the relations between French speaking and English speaking Canadians.
On that same date the hon. member for Quebec West had this to say, as found on page 4372 of Hansard:
Before I conclude, Mr. Speaker, I wish to mention again to the hon. members that they committed themselves, during the election campaign of last May, to stop unemployment once in power, and in my opinion it is about time that they seriously think that over and introduce adequate legislation in that connection.
1 hope you will forgive me, Mr. Chairman, because I have a number of other quotations I want to read into the record from speeches 28902-5-293
Supply-Labour
in the house by members from Quebec who have stated repeatedly that the unemployment problem is at the root of the division and that they expect the federal government and the parliament of Canada to do something about it. Again, the hon. member for Iles-de-la-Madeleine had this to say on May 22 this year as found on page 153 of Hansard:
Well, Mr. Speaker, how can the citizens of the province of Quebec, who consider themselves as full-fledged citizens, who want to be considered as equal partners in Canada, be willing to accept a situation where they are at a financial disadvantage compared to the citizens of Ontario?
The hon. member for Vancouver-Kingsway, who I am pleased to see is here tonight, had this to say as found on page 328 of Hansard for May 27 last:
Nothing contributes more to frustration and bitterness or loss of confidence in one's country and its social system than long periods of unemployment. The relatively poor economic conditions in Quebec provide a major source of discontent among the working people and farmers in that province.
The hon. member for Lake St. John had this to say, as found on page 328 of Hansard for May 27 last:
I come from Quebec, a province which is most particularly affected by the unemployment which prevails in Canada. Nearly 10 per cent of our labour force are out of work and all the people of my province have their eyes turned toward Ottawa to see what the federal government intends to do, through the provincial governments and especially through the Quebec government, to reduce the number of unemployed.
After having spent a few days in Montreal and one day in the city of Quebec and several days in other parts of the province, I believe there is a genuine frustration among some of our French speaking Canadians who do not have a sufficient command of the English language to aspire to some of the top positions in commerce in Canada today. But I wish to contend that the international language of commerce is English, whether we like it or not. Furthermore, it is not because of anything that English speaking Canadians have done that this has come about. I do not think it is even something that England itself has done in latter years that has brought this about. I think it has come about because of the expansion of American influence in the world, particularly in the world of commerce, for certainly that expansion has been carried out in the English language.
Therefore I implore our colleagues from the province of Quebec to stop blaming the English speaking members of this house for this problem. Even if Quebec were a separate state the people there would still be faced with the international language being English in dealing with all the countries in the north Atlantic region, and in many other places in the world.

Supply-Labour
As I said, Mr. Chairman, I am genuinely interested and concerned in doing something about this problem. The members from the province of Quebec whom I have quoted have stated one after the other that it is the responsibility of the federal government and this parliament to take some action to equalize the situation. So my challenge to these members tonight is to come before parliament with some kind of program that will do the job and at the same time be acceptable to the province of Quebec.
We know, for example, that in past years when the trans-Canada highway program was established it was rejected in its initial stages by the province of Quebec. We know, for example, that when assistance with education, particularly to universities, was offered to all students at any of these institutions all over Canada this was rejected by the province of Quebec.


An hon. Member:: By Duplessis.


Horace Andrew (Bud) Olson: If we turn to more recent history we find that the municipal development and loan fund established at this session of parliament was also partially rejected by the province of Quebec, even though this legislation was supposed to do more than anything else to solve the unemployment problem in Canada.


Mr. Pigeon:: The province was right, too.


Horace Andrew (Bud) Olson: I want to say in fairness that we in this party have asked for years that a municipal development bank be set up and we are still of that opinion. There is a slight difference between the operations of a municipal development bank, such as we have advocated, and the municipal development and loan fund that was actually established. There are provisions for the forgiveness of certain amounts and there are also provisions that the money must be used for certain things.
Taking that into consideration and at the same time taking into consideration the provisions of the Financial Administration Act, which demands that money voted by parliament be accounted for to parliament, the department administering the development and loan fund has got to follow through to see that the money is used for purposes that were authorized by parliament. That part of the legislation is not acceptable to Quebec, if I understand their attitude correctly.
The province of Quebec has contracted out of the Canada pension plan even before it has got under way. It is not under way, and perhaps they saw the light first because in my opinion it was introduced before all of the problems had been anticipated. Its introduction was premature.


Louis-Joseph Pigeon: On a question of privilege, Mr. Chairman, I think the province of Quebec has its reasons for refusing to enter into an agreement with the federal government and I think we from the province of Quebec have no lesson to learn from the hon. member.


Horace Andrew (Bud) Olson: There is no question of privilege or order or anything else. I would remind the hon. member for Joliette-L'Assomption-Mont-calm that he and I are members of the parliament of Canada and that we should always keep that in mind. I am not here tonight to try to teach a lesson to anybody from Quebec or anywhere else. The fact is, however, that parliament has been under a steady barrage of complaints from members from the province of Quebec that we should do something to relieve the unemployment situation there. As I said, I am willing to support measures that will do this, but I want to know that the province of Quebec is going to accept them. Many of the things that have been done over the years have been rejected out of hand by the province of Quebec on the pretence that they infringed on provincial autonomy.
There are precedents for passing legislation that is of benefit to certain regions in Canada. In this session of parliament, for example, we have passed the Atlantic Development Board Act and have provided a fund of $100 million for the special benefit of that area. I have no objection to passing such legislation, even specifically for the province of Quebec, provided they will make use of it.
I also remind hon. members that back in the 30's a number of such acts were passed by parliament. For example, the Prairie Farm Assistance Act was of specific benefit to one area of Canada alone. We appreciated that and it has done a lot of good over the years. Then there is the Prairie Farm Rehabilitation Act which also assisted a certain area. It is no disgrace to any area of Canada that it should happen to be lagging behind some other area economically. It would be a strange situation indeed if one particular province or one particular area would be ahead all the time.
In the past we have passed legislation in this house for the benefit of the prairie region, while in the last few months we have passed legislation for the benefit of the Atlantic region. I have no objection to supporting legislation that will be of benefit to any other area that is economically depressed at this time. As I said, Mr. Chairman, I should like to have some assurance that if we do what we are expected to do and a program is brought in and passed it will be accepted and used for that purpose.

I should like to spend a couple of minutes on the vocational training program. The member who spoke immediately before me said it was not proceeding rapidly enough, and perhaps that is true. It is true if you take into consideration the number of unskilled workers in the country who are unable to obtain jobs. I want to be fair and I would even congratulate the former minister for setting up this program in the first place; but it should be drawn to the attention of the committee that the people at the local administrative level who are trying to make the best use of the vocational training program are breaking new ground all the way. They had no programs or surveys of what was required. They did not have the staff or facilities to get on the with job. We have one of these schools in Medicine Hat and I am glad it is there. About $24 million worth of school building and equipment are ready to be used. But when it comes to programming and finding the needs required to fit programs to train people it becomes a different kind of task. I know a number of members on the school board, particularly the superintendent of public schools, in Medicine Hat in charge of setting up these training programs and educational programs, and it is not easy; but they are moving as fast as they can and it is a matter of trial and error. Quite frankly I congratulate them on the progress they have made to this point. It is not as rapid as it perhaps could be, but this is not because of lack of effort. We have excellent facilities. The school is almost overbuilt and the present facilities cannot be fully used either this year or even in two or three years to come. I think it is rather an unfair criticism therefore to say the program is not going ahead as fast as it should. I have looked at some of these statistics and the provinces of Ontario and Alberta took the greatest advantage of this program. After a while the other provinces will be able to benefit to a large extent from the experience learned in these two provinces.
In closing, I just wanted to draw these few matters to the attention of the committee and hope that in weeks to come, when we hear of unemployment problems in various regions of Canada, we may also hear suggestions from those same areas which will in fact be an acceptable solution to these problems.


Gerald Augustine Regan: In rising to make some brief comments on the estimates I would not only compliment the minister on his appointment but also compliment him on the manner in which he has carried out his heavy responsibilities. Everyone in Canada agrees that no minister of labour was ever faced with more serious problems in so short a time 28902-5-2934
Supply-Labour
as the present minister over the last six months. I was very interested in the remarks of the hon. member for Winnipeg North and to a great extent found myself in agreement with him, when he deplored the lack of a review and systematic amendment of our labour legislation. I agree the time has long since passed when all the labour legislation of our country should have been thoroughly reviewed and changes brought about to bring it up to date in light of changing conditions, both in labour and management, during the last 20 years. The recent trouble with the S.I.U., culminating in the present trusteeship, is an excellent example of the need for changes in our labour legislation. In speaking in the debate at the time the trusteeship was established I had occasion to mention that our legislation should be brought up to date so that other gangster czars of the Hal Banks type would not have the opportunity to come into power in the future. I suggest in that direction it is time we considered seriously the necessity of outlawing the "closed shop" in certain types of industries in order to prevent a would-be union czar from having too much control beyond our democratic processes. There are also many active today in the union movement in Canada who agree that we need some form of review by governmental or other appointed authorities of union welfare plans and finances so that members' interests can be protected. In this regard caution must be shown by this house in amending legislation so that the freedom and independence of our labour movement would be protected.
Nevertheless there is no question that the parliament of Canada by default has given to the courts the job of deciding the course of development of our labour laws during the past 20 years. Owing to the fact that we made no changes in our labour laws to keep them up to date it has been left to the judges to adjudicate upon all types of situations which arise in modern management-labour relations, many of the present situations being of a type not even contemplated at the time when our first labour relations legislation was enacted. I suggest that in many instances there would be a goodly number of Canadians who would disagree with the course the courts of this country have seen fit to follow in this direction.


Donald MacInnis: Would the hon. member permit a question?


Gerald Augustine Regan: No. We need statutory clarification of the right to picket peacefully, and of the legality of secondary boycotts in view of decisions made by the courts, which have not seen fit to follow the rather liberal interpretation of workmen's rights as established

Supply-Labour
in England by the Crofter-Veitch and Thomp-son-Deacon eases. In this country the courts, acting in the absence of the legislators through default of parliament, have seen fit to invent with great imagination and originality a supposedly new tort of conspiracy. We have now reached what I call an unreasonable condition that any strike not wholly in accordance with the law becomes outlawed to the point where it is conspiracy in the eyes of the law, so that in effect strike activity can be restrained and the rights of the workers to collective representation is, in the end result, invariably lost. In other words, under the present status of the law if the union, in carrying out the necessary secret vote before a strike is called, make some technical error and does not comply with the letter of the law, everything happening thereafter becomes an illegal conspiracy making the union subject to injunction, and to be sued for very heavy damages.
These are situations which I suggest were never intended by parliament and which do not exist under the laws of England. I submit that the spirit of the bill of rights and, indeed, in the spirit of the earlier decision of the Aristocratic case in British Columbia in 1951, which decided that workers at all times have the right to free speech and to communicate their side of any dispute regardless of whether they were in the right or in the wrong, has unfortunately not been followed subsequently by our courts. In order to bring our labour laws back in line with developments in this branch of the law, it is high time we had a complete review of the labour legislation of this country.
I intend to be brief, but before sitting down I should like to say I am looking forward to the establishment by this government of a national labour code. I hope and feel it will not be long in coming and it is certainly badly needed. Before concluding I should like to say that we in Canada have been very fortunate in our labour relations inasmuch as we have had in the past, as we have today in the Canadian Labour Congress, a union organization which represents the great majority of the responsible law-abiding progressive unions of the nation.
We are very fortunate in having such an organization which has at all times taken a broadminded approach to the problems of the economy of this nation, an organization which other countries would be proud to have as their central labour organization.
Finally, I would urge that the government make every effort to see to it that an early review of the now outdated labour legislation of this country can take place so that we in Canada can again become leaders in this field.


Louis-Joseph Pigeon: Mr. Chairman, I had no
intention of taking part in this debate but in view of the remarks made by the hon. member for Medicine Hat (Mr. Olson), I felt it was my duty to protest strongly on behalf of the vast majority of people in my province.
True, the province of Quebec does have 40 per cent of the total number of unemployed in Canada. My province needs its powers of taxation to settle its problems, including unemployment.
Quebec's culture and outlook are different from those of the other provinces, and that is what made confederation possible.
My province is quite willing to co-operate with the other provinces to make Canada stronger and more powerful, as long as the federal government, regardless of which party is in power, respects its wishes. That is how Canada will become a strong and powerful country.
For several years now, the central government has been infringing upon the jurisdiction not only of Quebec but of all provinces. No protests were voiced by some provinces but Quebec was right in speaking out because it is not a province like the others. It has its own characteristics and I think that the various and successive provincial governments opposed joint programs, and I agree fully with their stand. In fact, I hope that at the next federal-provincial conference, the central government will accede to the request of the province of Quebec. Should it fail to do so, it would be responsible for the secession, before long, of French Canada from English Canada.
I wish to emphasize this, because under our constitution certain rights have been recognized to the provinces.
At the time of the war, the federal government infringed upon the rights of the provinces, and it should as far as possible comply with the requests made every year by the province of Quebec, so that the latter could regain control of certain fields and carry out some work projects.
If the federal government were to agree at the next federal-provincial conference to turn over to the province of Quebec, and to other provinces as well-because the province of Quebec is not the only one to want it-* more taxation powers in order to promote education and other economic and cultural endeavours, I am convinced that this would be the best way of solving the unemployment problem, not only in the province of Quebec, but in the other provinces also.
Mr. Chairman, as I said earlier, I did not intend to speak but the hon. member for

Medicine Hat criticized the province of Quebec for refusing to co-operate with the federal government about the pension plan. Well, Quebec needs the money in that reserve fund precisely to meet its own economic needs and thus help check unemployment.
I also wished to protest strongly, and I say it again, against the remarks made by the hon. member for Medicine Hat. In fact, the hon. member does not know the province of Quebec well because spending only a few hours there, as he did, is not enough to enable him to know the feelings of the province of Quebec.
In my opinion, the hon. member should instead spend two and even three months there, but even then I would be very much surprised, in view of the mental capacity I find him to have, if he managed to understand the aspirations of the province of Quebec.
The province of Quebec will work for a greater Canada, as long as its rights and privileges are respected.


Stanley Howard Knowles: Mr. Chairman, we appreciate the desire of the minister and of the hon. member for Ontario to deal with these estimates as expeditiously as possible, but we feel the committee should take at least sufficient time to recognize the importance of the department with which we are now dealing. I know we have been criticized in the press for wasting time on unimportant matters, but that is no reason for our not giving adequate attention to important matters.
In the same vein, may I say it is interesting to notice these box scores in the columns of the press on the attendance of members of the House of Commons. I do not know whether it is because I have got to my feet, but I notice there are now five representatives in the press gallery. During most of the evening there have been only two. I hope that box score will be published as well. I may say our proceedings have been well covered by the charming representative of United Press International and by a capable representative of the Canadian Press. But the representatives of the newspapers of Canada who have so much to say about our attendance and our discharge of our duties seem to have taken Friday night off. I hope they will report this. I hope, at least, it will be transmitted in the dispatches of the Canadian Press and United Press International.


Gordon Minto Churchill: Would the hon. member permit a question? The hon. member knows a bit about the rules. Is it in order to draw attention to people in the gallery?
Supply-Labour


Stanley Howard Knowles: I think the hon. member for Winnipeg South Centre has raised a good point of order. I am glad he did not raise it until I had completed my remarks on that subj ect.


An hon. Member:: What the hon. member drew attention to was the fact that there was almost nobody in the gallery.


Stanley Howard Knowles: As the members of the committee know, Canada holds a seat on the governing body of the International Labour Organization by virtue of the fact that we are recognized as one of the ten most industrialized nations of the world. We are also aware that the nature of our economy has changed across the years, particularly in recent decades. We have become a highly industrialized nation and, in all probability, this trend will increase. I mention this in order to support the point of view expressed earlier this evening by my hon. friend from Winnipeg North to the effect that the Department of Labour should become much more than just a set of referees in industrial disputes; it should become a department which takes a positive lead in the promotion of full employment, in the promotion of education, in the promotion of training and retraining, and in bringing forward legislation which will enhance the position of those who work in Canadian industry.
This is why we feel full attention should be given to these estimates. This is why we had hoped that the able and scholarly Minister of Labour, who is capable of giving an excellent treatise on these matters might have given us a little more substance in the remarks he made tonight. I know he indicated his willingness to answer questions after other hon. members have spoken. I hope that having listened to whatever speeches are made tonight he will give the speech he should have given at the start. I hope he will have noted not only the remarks which were made on this side of the house but the appeal addressed to him by the younger member for Halifax-at least, I think he is the younger one-for action on the question of a national labour code. We have labour legislation on the books of this country. We have had a trade unions act for a long time. We have had other bits of labour legislation for many years. But it was not until 1948 that we got anything comprehensive in terms of federal labour legislation. I refer to the Industrial Relations and Disputes Investigation Act, which we did not get until 1948. We did not get the Unemployment Insurance Act until 1940. These two pieces of legislation came in those years, despite the fact that in 1919 the party which is now in power pledged itself to go to the limit with respect to the

Supply-Labour
items that were incorporated in the 1919 peace treaty and set out in the terms under which the International Labour Organization was established.
It not only took all those years to get on the statute books the two main pieces of legislation to which I referred, but since then very little has been done. There have been no significant amendments to the Industrial Relations and Disputes Investigation Act since 1948. While the Unemployment Insurance Act has been amended a number of times since it was enacted in 1940, it is now due for a thorough overhaul. We have been promised that something will be done in this field, but it looks now as though this cannot be counted on until the next session of parliament.
There is another area, Mr. Chairman, in which labour legislation is required, apart from measures such as the Industrial Relations and Disputes Investigation Act and the Unemployment Insurance Act. I have in mind what is now generally referred to as a labour code. I was glad to hear other members, particularly the Liberal member for Halifax, talk about the need for a labour code. Sometimes he talked about the need for revising it. The difficulty with the use of that word is that there is no labour code to revise. It is a purely arbitrary exercise to say what items are included in a labour code, what items are included under the heading of industrial relations, and so on. But it does seem to be generally recognized that a labour code ought to include at least these five things: legislation respecting minimum wages; legislation governing maximum hours of work; legislation on a maximum work week; vacations with pay, and statutory holidays with pay.
There are other things, such as the question of a check-off of trade union dues. There is the question of legislation for equal pay for equal work, which we have on the statute books. If I may confine myself to the five items that I said were really the minimum elements of a national labour code, I should like to point out that, so far, only one of them is on our federal statute books, namely legislation for vacations with pay. Even that was not put on the statute books by the Liberals. It was put on the statute books while the Conservatives were in power, despite the fact that as long ago as 1919 the Liberals, in that great convention that selected Mr. King as leader, promised significant legislation in this field.
About once a year I like to get from the library the book that reports the 1919 Liberal convention. It is a very interesting document. As a matter of fact tonight, for the first time,

I found that one of the delegates at that convention in 1919 was the late Mr. F. C. Hamilton of Winnipeg, who was chairman of the board of the church in which I was minister the first time I ran as a political candidate back in the federal election of 1935. Let me say that although he was an active Liberal, and even though he did not agree with my politics, he recognized my right to enter the political field.


Mr. Munro:: This is a constructive contribution.


Stanley Howard Knowles: I missed that.


John Carr Munro: May I ask the hon. member if he feels that he is making a constructive contribution to the debate tonight?


Stanley Howard Knowles: I did not think it was
destructive to refer to the fact that a Liberal recognized the right of an individual to political freedom; but if my hon. friend thinks it is, I could withdraw it.


John Carr Munro: I thought it was an exercise in partisanship against which the hon. member is always talking, and for which he has a considerable distaste.


Thomas Clement (Tommy) Douglas: It probably depends on your powers of comprehension.


John Carr Munro: It does not take much comprehending to discern a partisan speech by the hon. member.


Michael Starr: May I just refer to the remarks made by the hon. member for Hamilton East, when he spoke of a partisan contribution? After all, that is a matter that is basic.


Lucien Lamoureux: Is the hon. member rising on a point of order or making a speech?


Michael Starr: I am rising on a point of order in respect of the remarks made by the hon. member for Hamilton East about partisanship in debate.


Lucien Lamoureux: Perhaps the hon. member could be given the opportunity of making these remarks afterwards. It seems to me the hon. member for Winnipeg North Centre has the floor now and he should be allowed to make his speech.


Michael Starr: I think I have the agreement of the hon. member for Winnipeg North Centre to do this. I should like to refer to Hansard for January 30, 1963, page 3287, where I find the following:


John Whitney Pickersgill: If I may be permitted, respectfully, Mr. Speaker, to raise a question of privilege for just one moment, I suggest that the idea that any debate in this house should be non-partisan is foreign to our whole parliamentary system.


John Carr Munro: If I may, I would suggest that the hon. member for Winnipeg North Centre has a very able defender in the hon. member for Ontario.


Thomas Clement (Tommy) Douglas: A profound observation from a person so lacking in profundity.


Stanley Howard Knowles: I did not realize that a mere favourable reference to a late friend of mine who happened to be a Liberal was going to produce this exchange and this point of order. I was just inviting members to do as I do once in a while, and read the promises made by the Liberal party in 1919. Amongst other things, of course, they promised measures in the social security field that perhaps are not relevant to the discussion tonight. I will quote them again on another occasion.
However, the Liberals did promise in 1919 that they would adopt the proposals of the International Labour Organization, that we would have a maximum hours per day law and a maximum days per week law. Hon. members would be quite proper in drawing my attention to the fact that I have not mentioned the number of hours that was promised in those days. We have moved from that day to goals that are more advanced, but on the federal statute books there is no law fixing the maximum number of hours or the maximum number of days per week. There is still no minimum wage law and there is still no provision for statutory holidays with pay. In so far as annual vacations with pay are concerned, there is a bill on the statute books but it was put there by a Conservative government when it was last in power. The Liberals, when they were in opposition, agreed with us that this legislation should be improved, but as yet nothing has been done about it.
When the Liberals were over on this side of the house in the last parliament, they were strong in their insistence that there should be a national labour code; that this kind of legislation on minimum wages, maximum hours, a maximum work week, vacations with pay and statutory holidays with pay, should be introduced. They have moved across the way and they still think it should be introduced. The hon. member for Halifax said so tonight. The hon. member for Essex West on May 30 in this session when speaking to one of my bills in this field suggested that this was not the way to do it, bringing in one bill at a time, but that what we should do was to bring in a national labour code. He admitted he could not speak for the government, but he was sure that before long a national labour code would be introduced by the Liberal party.
On that same day the hon. member for Kootenay East, the parliamentary secretary to the Minister of Labour, expressed the same
Supply-Labour
sentiment. The way to do this, he suggested, was not by bringing in one piece of legislation at a time but to wait for Liberals to introduce a national labour code. On May 21 the Prime Minister was asked about one of these items, namely minimum wage legislation. He replied on that day that it would be introduced as soon as possible. I asked the present Minister of Labour on June 5 of this year when these items for a labour code which had been promised by the Liberals in the last election campaign were going to be introduced and he assured me, as can be found in Hansard for June 5, page 699, that these matters were under active consideration and would be on the order paper in due course.
Well, Mr. Chairman, there is the order paper; look at it and you will see that not one of these items is on it in the name of the government. There is no indication of a national labour code. The other day when the Prime Minister told us what the business would be for the balance of this session, there was no reference to a national labour code. Even when we look over the promises that the government has made for the next session, this does not seem to be in sight.
Mr. Chairman, I think it is quite fair on my part to refer back to 1919 and to speak in terms of the Liberal party that we have today as the Liberal party that came into power at the next election after that year's Liberal convention and which has continued the traditions of that time. It is a long time to wait, from 1919 to 1963, 44 years, and still not have implemented the things that were promised at that time. For the benefit of the hon. member for Hamilton East, let me read a paragraph from Mr. Mackenzie King's speech at the end of that convention, the convention that adopted these progressive labour planks such as the labour code to which I have just referred. This was his speech which concluded the convention at which he had been elected leader, and was away to his future career. These are Mr. King's words:
If more is needed, that more is to be found in the platform which has been laid down by this convention. That platform, ladies and gentlemen, is the chart on which is plotted the course desired by the people of the country, as expressed through the voice of the Liberals assembled here. So with this chart and this compass, forgetting the things which are behind, and stretching forward to the things which are before, let us press on from this moment, a great, a united, a mighty force, making ever for new liberty, for wider freedom, for greater righteousness in the public affairs of this nation; press on, ever more zealous and united, till we have reached the goal where the principles and policies laid down on this historic occasion will have become-
-and I pause now to emphasize the next two words-
-through legislation-

Supply-Labour
-and the rest of the sentence reads-
-part of the law of our land.
I do not think it is unfair on my part to say to the Liberal party in power today that these many years later we should not still have to be asking, as the hon. member for Halifax was asking tonight, for the Liberals to put into legislation the things they have promised across the decades. I urge upon the minister as strongly as I can to pay heed to what has been said to him from both sides of the house about a national labour code.
Proposals along these lines are before him in terms of private members' public bills that we have placed on the order paper. We are willing that these bills be passed or that their subject matter be referred to committees, or that any other course be taken, provided the government will recognize the importance of a national labour code to the industrialized economy we have now in this country.
I just want to mention one or two other things, and I mention them briefly, because the main part of what I wanted to say I have now presented to the minister. I want to hear from him on this question of a national labour code before this item of the estimates is concluded. I also want to tell him that when we get to the item that deals with the International Labour Organization we would like to hear what the government plans to do by way of ratifying some more of the conventions and recommendations passed by the International Labour Organization.
Canada has been a member of this organization since its inception. Canada has voted for many of the conventions and recommendations passed at the annual conferences of the I.L.O., but we have ratified very few of them. I hope this government will do better than the last Conservative government, and better than the previous Liberal government did in this important field.
I also support the position taken by the hon. member for Winnipeg North, that the national employment service should be separated from the unemployment insurance commission where it is used, we feel, mainly as a test of employment for the purposes of getting or being denied unemployment insurance. We think it should be brought directly under the Department of Labour and pushed as a major activity of that department.
These are the main things we want to place before the minister tonight, and I express the hope that he will deal with the points raised by the hon. member for Winnipeg North, and this whole question of a national labour code.
Now that the hon. member for Winnipeg South Centre has slipped behind the curtains and may not raise another point of order, I wish to say I have received a note from

the press gallery from the faithful representative of the Winnipeg Free Press. He was hidden by the post and I did not see him. I am happy to include him among the members of the press gallery present tonight.


Mr. Caouette:: Mr. Chairman, we are considering tonight the estimates of a very important department, namely labour. In fact, the department is probably the one which is most influential, works the hardest, offers the greatest number of suggestions and carries out the largest number of studies concerning the various solutions which are proposed to the provinces and the whole of Canada.
The Minister of Labour (Mr. MacEachen) receives representations from all sectors of the Canadian economy, be it mining, industry or even agriculture. Day in and day out, he is always besieged by problems. Mention was made tonight of the feeling and the turn of mind prevailing in the province of Quebec regarding its economic situation. It was even asserted that members who represent Quebec ridings, that the people in Quebec, are not satisfied, because it is simply an economic matter if there are in Quebec more unemployed than anywhere in Canada.
Mr. Chairman, since the hon. member for Medicine Hat said earlier that the province of Quebec was turning down any assistance from Ottawa and that the great number of unemployed in our province was due to the turn of mind of the people and the members from Quebec, I say this to him: Ottawa collects $640 million more from the province of Quebec than the province gets from Ottawa; that is the difference between what is collected from and what is given to Quebec-$640 million.
It will be claimed that this amount is used to help either the maritime provinces or some western provinces, especially when we had to subsidize wheat in the west because foreign takers or buyers could not be found, or to subsidize the maritime provinces which are depressed at the present time.
Mr. Chairman, Quebec is not asking Ottawa for preferred treatment. But if Quebec refuses to participate in joint programs, or pension plans, it is because it wants to preserve its sovereignty, its autonomy. Quebec does not want Ottawa to interfere in its affairs. Quebec is only asking Ottawa to leave to Quebec what belongs to Quebec. I think the province of Quebec could very easily find ways to use those $640 million which are taken from it.
The situation of Quebec is different from that of Alberta or British Columbia. At the

present time, British Columbia is asking Ottawa to ratify a treaty between British Columbia and the United States regarding the development of the Columbia river. You do not hear Quebec complaining about that request by British Columbia.
You do not hear either the province of Quebec complaining because Alberta deals directly with the United States about the operation of its oil wells. Certainly not.
The province of Quebec is not complaining either because industrialized Ontario sells directly to the United States or even to other foreign countries. Quebec is far from asking for preferred treatment. Quebec only wants to be respected.
With respect to the hon. member from Alberta, that is the hon. member for Medicine Hat (Mr. Olson), who asserts that the outlook, the turn of mind of the hon. members coming from the province of Quebec is not right, that is probably the cause of separatism and independentism in that province. Well, Mr. Chairman, I say that the economic question is of prime importance in our province, just as it is in the other provinces, as well as in every part of the country.
The Minister of Labour, whose estimates are now before us, is well aware of that. We received the day before yesterday a telegram from the Lauzon shipyards' workers union, signed by Rene Barras, which reads as follows:
We protest against the indecision of the government with respect to Canadian shipyards. Some time ago, the government cancelled its program for the building of eight frigates and now it informs us through the press, of the purchase by Canada of three English submarines at a cost of $30 million. These workers would like to know the future policy of the government. Does the government advocate the disappearance of Canadian shipyards, or what?
I suggest to the Minister of Labour that the situation at Lauzon is getting worse, that there is an ever-increasing number of unemployed. These are economic conditions caused by the policy of this government which, instead of providing work for our unemployed by having them build ships, frigates, prefers to purchase them from foreign countries.
We are in favour of buying those things from other countries when it is necessary to do so, but at the present time the situation is urgent in Canada itself, because a large number of workers are having a very hard time.
Mr. Chairman, it has been claimed that the province of Quebec has no solution to offer. But we do have solutions. We are asking the federal government to respect provincial autonomy. We are asking the federal government to give back to the province of Quebec what belongs to her.
Supply-Labour
That telegram proves that a shipbuilding program cannot be carried out in the western agricultural provinces, in Manitoba, Saskatchewan and Alberta, because they lack the required shipyards. But Quebec and Ontario have them. So why not give the benefits, the priority, to our own Canadian workers?
I give my utmost support to the maritime workers' union which is asking the government for shipbuilding projects, for new contracts which will enable our workers to earn an honest and decent living in their country, in their province and, in this case, in the province of Quebec.
We do have solutions. We have one which has been put forth by the province of Quebec. Quebec has offered a solution to the federal government, that of handing back to Quebec what belongs to her, of handing back to Ontario what belongs to Ontario and of handing back to the other provinces what belongs to each one of them.
Instead of centralizing, let us decentralize and respect provincial autonomy. This is what we are asking, not for one province but for all of them. How can a member from Quebec or elsewhere agree to any other solutions?
The pension plan suggested by the government might very well be applied provincially and by the province itself.
The provinces do not need Ottawa to set up joint programs. Why resort to Ottawa in order to pay an increasing number of bureaucrats and prevent the provinces from enjoying complete autonomy, when they all have an efficient administrative set-up and machinery?
Why not give to the provinces the financial means to look after the decentralization of planning, the development of their natural resources and of the industrial potential now available in Canada? This is the situation prevailing in the province of Quebec and throughout Canada. Quebec is no exception, and it is only a question of Ottawa recognizing the fair demands of the province of Quebec, as well as those of the other provinces.
Mr. Chairman, economic conditions now prevailing in Canada call for the immediate attention of the Minister of Labour. The minister knows that the solutions we are suggesting are practical, applicable and readily workable.
Instead of racking and cudgeling its brains to find new schemes to take from the provinces what little is left to them, why does the government not use the available means, that is the Bank of Canada?
We say over and over again, why should the policy which we are advocating not be applied? It is a possible solution. Why not

Supply-Labour
use the Bank of Canada, in order to develop our natural resources and thus assist the provinces, school boards, municipalities, public bodies in the public administration? This is what the Canadian people are expecting from us, and the government is now trying to meddle in all fields of private enterprise to lower the human being, private enterprise and private efforts. For what purpose? For the benefit of a financial system which has shown its inefficiency.
In fact, was it not the governor of the Bank of Canada, Mr. Towers, who stated in 1939 that the only restriction to the credit required to wage war was the availability of manpower and materials? Credit was available inasmuch as manpower and materials were available. Since we have from 400,000 to 500,000 unemployed-registered and unregistered, listed and unlisted but unemployed just the same-and since between one and two million people suffer from the present economic situation, why not apply the same principle as in wartime?
Mr. Chairman, why not apply in peacetime, in 1963, the same policy as we applied in wartime to put Canada on a war footing?
Why not set Canada on a peace footing, on an economic development footing?
We have the unemployed, we have the manpower and the brains, in fact we have everything we need except the credit which the government refuses to make available when it comes to take advantage of our industrial potential.
Social Credit has a solution which is not based on division. Saying that Quebec does nothing but beg from Ottawa, that it refuses to co-operate with Ottawa and to accept its conditions, does not help in the search for a solution.
Man does not live on bread alone. There is also the mind, the morals, the supernatural, the liberties. The freedom of man is as important as the food he can consume. This freedom we seek for individuals, we seek it not only for the province of Quebec, but also for all the provinces of Canada, without exception. What we are after is not dissension, but unity, a sort of unity based on an economic system which will ensure the development and emancipation of the provinces, and that of the human person in all the provinces.
Then, the Minister of Labour, the officials of his department and all of us will be happy to go before the electorate and tell them: While we were sitting in Ottawa, we passed legislation to put finance at the disposal of the human person, instead of putting the latter at the disposal of the former, as has been the case so far.


Mr. Peters:: Before the hon. member takes his seat may I ask a question? So far as the Canada pension plan is concerned, Quebec has suggested it will be able to handle this matter itself, which I think is probably true. However, the result will probably be that the other provinces of Canada will not have a national pension program. What answer is the hon. member going to give to people living in his riding, but who work in my riding in another province and who will not be able to obtain a pension based on the work they do, whereas if we had a Canada pension plan the border between our ridings, being a provincial border, would be of no consequence?


David Réal Caouette: Any province in Canada can do exactly the same as the province of Quebec.


William Arnold Peters: It would be too slow.


David Réal Caouette: If it is too slow they should move faster. If the province of Ontario wants its own plan, it is up to the province of Ontario, just as it is up to us in the province of Quebec to have our own plan. There is no objection. On a national scale there is no objection from the province of Quebec to meeting with all the other provinces to work out a mutual national plan that could be accepted by all the provinces, but without the intrusion and control of the federal authorities in the matter. If Ottawa can help, all right; but if Ottawa cannot help, then the province of Quebec can look after itself just as Ontario can, and the hon. member's riding also.


Mr. Webster:: Mr. Chairman, although education is constitutionally a primary responsibility of the provinces in Canada, the simple fact is that at least 20 different federal departments or agencies are involved in the expenditure of money on some type of educational program. The departments that are most affected by this common trend toward federal participation in the federal field are national defence, citizenship and immigration, northern affairs and national resources and labour, as emphasized by the minister this evening and by his immediate predecessor.
This condition of federal participation is the result of the needs of our northern people and of our native population, of the members of the armed forces and their families, and of the unemployed, the handicapped, penitentiary inmates and other special groups. But it is due even more to a growing conviction that a modern democracy must view education as a basic human right and that survival depends upon the maximum development of every individual within the country.

Accordingly, Ottawa has become engaged in a wide variety of educational projects including subsidies, grants, scholarships, living allowances, etc. In addition, 84,000 children and 3,500 teachers attend federally operated schools. This federal activity accounts for 10 per cent of all public money spent on education in Canada.
It is significant that the Glassco commission refers to the administration of this varied program as "fragmentation" and emphasizes the fact that no machinery of any kind exists to co-ordinate these numerous educational activities at the federal level. The government should consider establishing, in co-operation with the provinces of course, a federal office of education or a secretariat to perform the following services:
1.	To supervise the educational activities of more than 80,000 students at present attending federally operated schools at a cost in excess of $50 million annually.
2.	To administer a program, in co-operation with industry, of research and retraining of workers required to meet the demands of automation.
3.	To encourage and publicize the comprehensive programs of adult education at present offered by extension departments of universities across this country.
4.	To act as a clearing house for matching grants and other contributions paid to the provinces for university construction, vocational schools, student loans, scholarships, special courses for new Canadians, handicapped children, apprentices, unemployed, etc.
5.	To provide a medium for the distribution among provinces of information resulting from research studies and experiments conducted at the local level by school and university authorities.
6.	To promote a greater understanding among educators through the exchange of teachers and professors from one province to another.
7.	To encourage the provinces to take steps to facilitate the transfer of students from one part of Canada to another with a minimum of disruption in their programs of study.
8.	To co-ordinate the educational work of the Canada Council, the national research council, the medical research council, the Canadian Broadcasting Corporation and UNESCO.
Let me repeat that these educational services are being performed now, when they are being performed at all, in a fragmentary and hit-or-miss fashion. I suggest it is time that serious thought was given to setting up a co-ordinating agency of some kind with the approval and support of the departments of education in the ten provinces of this country.
Supply-Labour


Alexander Bell Patterson: Mr. Chairman, I wish to participate briefly in this debate. First of all I would refer to the ministers of labour who have served successive governments since I first had the privilege of coming to Ottawa in 1953. We have been exceptionally fortunate in the calibre of men occupying this position, who have faced their various problems with a real sense of responsibility and sincerity. They have endeavoured to find solutions to these problems, and in this I include the present minister as well as those who have preceded him.
This has been a very interesting evening. It seems as though hon. members have been engaging in pleasantries, and the atmosphere seemed quite congenial until the sudden outburst from the hon. member for Joliette-L'Assomption-Montcalm in his reply to some harmless observations of my colleague from Medicine Hat.
With regard to the forthcoming dominion-provincial conference, I sincerely hope that the quiet representations and requests from the province of British Columbia will not go unheeded in the thunder of the demands which will be made on the federal administration from other sources.
Although my remarks tonight will be general, they will contain one or two specific points to which I will call attention. We have dealt with unemployment, and looking back across the years this seems to have been a favourite topic of discussion. However, it is not because various governments have failed to recognize the issue but rather that they have been unable to find a satisfactory solution. When the Liberals were in office the Conservatives lambasted them roundly for their lack of concern, but with a change of government this argument has merely shifted around a little. However, that does not detract from the earnestness with which vari-ious administrations have applied themselves to the task. We have all recognized the existence of this problem, but its very existence in a society such as ours is an indictment of our whole system. The matter of unemployment can only be dealt with effectively at the federal level, and that through a proper attention to monetary and fiscal policies.
Reference was made to the statement made by the hon. member for Iles-de-la-Madeleine which appears on page 4374 of Hansard as follows:
In my opinion, nobody questions the responsibility of the federal government to ensure full employment. It seems that it has been said a long time ago that full employment is at first a responsibility of the federal government.
We fully recognize the fact that provincial administration and policies have much to do with this problem. However, basically I agree that the major responsibility rests with

Supply-Labour
the federal administration because, as I have said, the conduct and direction of monetary and fiscal policy in the wider sphere is the responsibility of the federal government. It is an indictment of this system when we look around and see the hundreds of thousands of unemployed year after year. It seems we just cannot do anything about it. We keep referring to the increasing number of those employed, but yet face the fact that there is an increasing number entering the labour market each year for whom we are failing to find additional opportunities for employment. This has an effect on the morale of our people, and it is understandable that many of them are driven practically to the point of desperation through their inability to meet the demands of, and provide effectively and adequately for, their families. There is also a loss to society as a whole. There is a host of men and women anxious to engage in productive enterprise and gainful employment who, because of the economic situation, are unable to put their abilities and skills to work, not only in their own interests but in the interests of the nation. We must therefore recognize this problem and apply ourselves diligently to seek a solution thereto.
In a previous debate the Minister of Labour enumerated a variety of measures which the government had put into operation in an endeavour to solve the problem. He spoke about our training program, the winter works program, the winter house building program and others. I believe they are all good, but this does not get down to the basic problem. Until we do this these measures will just be palliatives and will not solve the problem of unemployment from the long term view. I think that the various departments of government rather tend to work against each other in the solution of this problem. A short time ago I gave an illustration where the Minister of Finance introduced certain measures in his budget resolution which we, as well as the people across the country, insisted would be detrimental to labour opportunities. Although there was some relaxation of these particular measures we find they were applied in part and will be further applied in stages as we go along. This has more or less frustrated the activities and plans of the Minister of Labour in his effort to solve the problem.
I wish to refer briefly to the plan to promote employment of workers over 45 years of age. The minister is giving this matter consideration and is urging that older workers be given the opportunity of gainful and productive employment. I suggest it would be a good thing in this regard to clean up our own house first. Someone sent to me a cutting

from the Edmonton Journal of Monday, June 24, 1963, which is an advertisement for a handyman, and then in parenthesis appear the words "camp steward". This advertisement reads:
Required for mine operation in northern Saskatchewan, must essentially have carpentry background, with knowledge of routine mechanical and plumbing maintenance, to service company town-site facilities. Applicants must be single, and between the ages of 30-45, position offers starting salary of $450 per month, five weeks annual leave, plane transportation, group pension and welfare benefits, apply in person to-Eldorado Mining and Refining Ltd.
This company is a crown corporation, and it might be a good thing if the government were to give attention to the matter of giving older workers equal opportunities for employment in these agencies which are part of their responsibility. I suggest that matters such as this be taken under advisement and that something be done to ensure that government agencies or crown corporations themselves will not be guilty of discrimination against those over the age of 45. Certain considerations may enter into this problem, but I do not think they should debar these people from providing for their own needs and the needs of those dependant on them.
Perhaps, this matter I am about to raise does not fall directly under the control of the Minister of Labour, but it is a labour problem. The other day on orders of the day I asked a question about certain conservation regulations which have come into force as a result of which a great many fishermen in my area have been unable to engage in fishing during the past fall. When we come back to the fisheries estimates perhaps I will debate this a little further, in light of the minister's reply. Nevertheless an indication was given some time ago that certain measures would be taken to employ these people and to see they had sufficient work to keep them going. Once again, the department should have a vital interest in promoting labour opportunities for those who are deprived of the opportunity of making a living in the field in which they have been engaged. As far as the items on the order paper in connection with vocational training are concerned, they receive our wholehearted support. They are very important because of the changes which are taking place in our economy and in our society. I read recently that it is possible that one person may have to retrain from one to three times during his lifetime because of the changes which are taking place, so it is tremendously important that this work should proceed and that retraining facilities should be made available to all those who because of economic circumstances, have to move from one type of employment to another.


William Arnold Peters: It is pleasant to see the easy manner in which these estimates are being handled. However, an intervention did take place tonight which highlighted one of the most important issues which has arisen in the labour field. I am referring to the provincial attitude which, I believe, will result in the loss of the Canada pension plan.
When I first came to Ottawa I was aware that in many of the areas under provincial jurisdiction there would never be a pension plan because of the management of certain companies and industries. I worked for the gold mining industry. That industry has probably the most reactionary management group ever assembled in any country at any time. It is certainly hundreds of years behind the times in labour relations. The federal government has not given the proper amount of consideration to the situation in this industry, though it should have done so, because to a large extent the industry comes under the jurisdiction of the central government. It is true that many matters which directly affect the lives and welfare of the employees come under provincial jurisdiction. This industry operates differently from any other. The shareholders who own it seldom live in the gold mining areas; they are dispersed throughout the nation and across the world. They have no connection with gold mining and, often, no connection with any other industry except for the shares they buy and the dividends they clip. This has made the industry difficult to organize and difficult to work in. In these circumstances the workers have looked to the federal government for help in solving at least some of their problems.
In none of the gold mines I know of is there any kind of pension plan. The miners have, accordingly, followed with great interest the suggestions which have been made with regard to pension plans over the past five or six years. I believe a great deal of enthusiasm for the Liberal party was generated by its spokesmen who went across the country campaigning on the basis of a Canada pension plan. Well, if the government had gone about making a mess of things it could not have done a better job than by letting the Minister of National Health and Welfare carry the ball in this field. Not only did she allow the province of Quebec to exercise the provincialism which it finds so very easy to operate when it wishes, but she allowed Ontario to make a stipulation that unless there were changes in the plan Ontario would not be interested, either. As a result tonight, when we are studying the estimates of the Department of Labour, there is no indication before us whether those engaged in the mining industry, the lumber industry and similar industries will be receiving a pension or not.
Supply-Labour
I was interested in the two provincial statements which were made tonight, because in my opinion they are so unrealistic. I believe the border between one province and another would be a much more physical thing than it is if, say, unemployment insurance benefits were paid on a provincial basis. I am certain there would be as many conditions and stipulations attached to the receipt of unemployment insurance as there are now to the other segments of the labour code administered provincially. There would be no uniformity and no opportunity for workers to travel readily from one province to another. I think it is unrealistic to suggest that the province of Quebec could go it alone, as the hon. member for Villeneuve has indicated it could. It might be his statement is true, as far as it goes. But Quebec only came into its own, industrially, within the last 15 years and there was a long period during which the people of Ontario and other provinces provided many benefits for Quebec which that province was not capable of providing for itself.
I doubt very much if it would be financially possible for the federal government to bring in a Canada pension plan if the provinces of Ontario and Quebec did not participate. I am almost certain it could not be done by the other provinces. We hear people speaking of co-operative federalism, the theory by which the provinces will get together and tell the federal government how far it will be allowed to go. I think this should also be the attitude of the federal government. They should say this. They cannot afford to allow the Minister of National Health and Welfare to go around the country peddling the idea of a plan. Let us call the provinces together immediately, and let the Minister of Labour see what co-operation he can get for a national labour pension plan placed under the Department of Labour, where it rightly belongs.
We have nothing to brag about in Canada with regard to the Department of Labour. I agree that the present minister has done an excellent job since he took office. I agree that the former minister also did well. I will agree that the officials are probably, in the main, better than the officials of some of the other departments which I shall not mention. But I still do not think there is anything to crow about. Our Department of Labour has many shortcomings. Let me give the committee an example. A young fellow who lived in a bunk-house at Frobisher Bay got into an argument one night with some of his friends about whether the boss of his construction company should pay annual vacation pay. He wrote a short letter to me indicating that this was a simple problem, one which I would probably find no difficulty in answering quickly. Well,

Supply-Labour
I consulted the deputy minister of labour. He did not have the faintest idea. He referred me to Mr. Wilson who had an idea, because he had made up his mind. He had decided these things many times in the past. He makes up his mind and reaches a conclusion, not because the law is there but because he makes the decisions. That is the way in which it is decided. Well, I did not agree with him. I went to the Northwest Territories council and asked them. The chairman did not know whether this applied in the Northwest Territories or not, though the act says it does. He said he would have to ask his lawyer. I telephoned the lawyer. He said he had not been counsel to that body for over a year. He did not know, but he believed the opinion I had received from the other officials was not correct. We then checked with the Department of Public Works because they were the ones who had the contracts. I found it all hinged upon one simple fact-whether or not the government had declared the contract to be in the interest of Canada, or for the good of Canada.
Unless parliament has declared the contract to be in the interest of Canada there is no right to this holiday pay. One might think that since parliament has, presumably, voted money for the project it would automatically be considered as being in the interest of Canada, but apparently that is not the case. A particular little official has to decide that it is in that category. So, after going through four or five departments I had scarcely any more information than when I began. However, the Department of Public Works intends to be specific next time. Next time they sign a contract, the contract will specify that vacation pay must be paid. We will get around the problem by specifying it in the tender. However, it seems to me if we are going to brag about our Department of Labour we should at least make sure that it does the things we have already decided, as members of parliament, we want to do. Vacations with pay should be granted to the people who come under federal jurisdiction. Let us make this provision apply to contractors in the Northwest Territories.
It is a very remarkable thing that the same young gentleman writes me he is now at home because he has a broken leg. He came out of Frobisher with this broken leg, and he was not getting any money. Where do you think we found the money was coming from? It was coming from a trust company in Montreal and not from a compensation board in Quebec, which is the province adjacent to that area in the Northwest Territories. The payment was coming from a trust company simply because some other arrangement had been made. We cannot take much credit for laws like this.

It has been suggested tonight that we should develop a national labour code. I think I can give a warning now that we are going to try to do this when the new territories are set up. We will hold up that bill until we are satisfied with the labour legislation that will be applicable in the new territories. If we are going to set up a new province, let us set up model legislation for the various departments over which the federal government has jurisdiction. Let us not put in some haywire set-up such as we now have which does not apply to those under federal jurisdiction and is completely discriminatory. You almost need a Philadelphia lawyer to find out what it does mean.
We have computers at North Bay now, so perhaps we could use those facilities in order to develop the type of legislation we need. I think a much easier way would be to write in black and white the various provisions we need, so that this federal government would be able to say it is leading the way. Certainly there are members on the liberal side of the house who are familiar with some of the major problems in the labour field. Surely they will have enough gumption to help us develop a labour code of which we can be proud. Let us apply it to the area in which the federal government is responsible.
I am only guessing, but I would think that the federal labour department is probably the third largest such department in the dominion. It would probably follow behind the departments of labour in Ontario and Quebec. It would not be a bad idea, therefore, if the other provinces that were developing new legislation could look at the federal department and say: This program appears to be working on the federal scene, so we are willing to accept it as a minimum in our province. I believe, Mr. Chairman, that about 10 per cent of the working force comes under the jurisdiction of the federal Department of Labour. I think we would find very few of them would be hurt by a minimum wage of $1.25 per hour. I do not imagine anybody would get a wage increase at that level, unless it might be the char staff of the House of Commons or other people in that category. I would think that the eight or nine statutory holidays we would suggest as a minimum for the labour code would be holidays for which the majority of people under federal jurisdiction would be paid. I would think the compensation laws and regulations probably are not worse in the federal field at the moment than the minimum standards we would be able to establish, but they are better than those in most of the provinces.
I think the same situation would apply in nearly all fields that the federal labour code would cover. It would provide the provinces

with an opportunity to upgrade their legislation and in many cases establish unity that is now sadly lacking in much of this legislation.
I believe, Mr. Chairman, that the minister is not going to be too proud of the federal Department of Labour until he can come before the house and say that he and his representatives have been willing to endorse the labour convention adopted in Geneva. We, in Canada, have adopted less of this labour convention than many of the newly emerging nations in Africa. I think it is time the Canadian public demanded of the federal Department of Labour that they give support to these labour conventions. In many cases it is only because the general public is not aware of the fact Canada has not endorsed them that has allowed the government to continue ignoring many of these conventions.
The hon. member for Winnipeg North mentioned many of the problems we have in organizing and establishing union-management relationships. Many of these problems stem from the fact that we have not endorsed and do not support many of the labour conventions that have been endorsed in other parts of the world. These are some of the things to which I think we should give consideration. The hon. member for Halifax mentioned a national labour code, and this has been referred to by the Liberal party since 1919. We have come a long way since that time and yet things that were suggested in 1919 have not been put into legislative effect. I suggest there are many other things that would bring the labour code up to date and give the federal Department of Labour a position of leadership to which the provincial authorities would give consideration.
There are other problems with which we should concern ourselves. I believe one of them is the lack of intervention by the federal Department of Labour in the many contracts that are signed by this government. Many of these contracts are yellow-dog contracts. They are contracts that are a disgrace to this country and a disgrace to democracy. There are contracts that are signed between unions and companies when there are no employees at all. Contracts are being signed years before they are even going to be ratified. I believe this is something to which no government should be willing to lend its support and should not in any way endorse. On many occasions we have raised specific cases of this nature.
I am sure there are many members who have raised specific cases in relation to the building of the trans-Canada pipe line, because it was one of the worst offenders in many of these labour relations fields. The
Supply-Labour
same situation has applied to all gas line construction in every area where secondary lines are being established. You will find contracts being agreed to before there are any employees of the contractor. This system has worked fairly well for the unions and fairly well for the companies, but damned poorly for the employees whom both of them were supposed to be protecting. 1 think the government should give some consideration to this matter. The one example I cited in the Northwest Territories illustrates the reason I believe the federal government should always supervise the contracts that are being let in those areas in which the federal government has jurisdiction, in the Northwest Territories and in the Yukon. Certainly, it would appear to me that when the Department of Public Works signs a contract with a contractor which does not contain the minimum requirements of federal labour laws, that is not in keeping with the spirit or intention of the labour provisions of the government itself. This is something to which the government should give its attention.
There are many things, Mr. Chairman, I am sure that we could say about the Department of Labour that would be good as well as bad. I am sure the minister will hear the good things from other members. There are some faults in the department that should be corrected. I am sure that as they are drawn to the minister's attention they will be corrected. I would strongly urge him, when he replies, to give us an indication of whether or not he is willing to fulfil this pledge that has been made all across the country to establish a national labour code which would result in the improvement of the standards in all the provinces. If he does this, I am sure it will add to the stature of the Department of Labour and the responsibilities they have.
I feel the minister should be congratulated upon what he did in connection with the recent labour dispute which resulted in the establishment of a trusteeship. Although I am not in agreement with what he did, I think he handled the matter very well. I think he made a good choice in the trustees. The minister should be given credit for the manner in which he has handled this matter, and for the fact he is now willing to have the trusteeship report periodically to parliament. I would only caution him that he is going to have a great deal of difficulty in the future every time there is a problem of national importance. I presume the next problem will be in connection with the railway workers. As soon as there is a problem there will be a huge outcry from the public demanding trusteeship as a solution, in each case where the national economy is affected. This is

Supply-Labour
going to be hard to do and I am sure the minister will give his attention to the matter.
In closing I would like the minister to keep in mind that his department has been very neglected in the past, in relation to the number of people it serves. In the main the people it serves are highly paid workers in government services across the nation. They enjoy better wages and higher standards than many other people, and if the minister will give the leadership that he is capable of giving, then this can become a much more important department of the federal government.


Herbert Wilfred Herridge: I will detain the committee for only a few minutes, but I cannot resist saying a few words as an old, unrepentant socialist, as a socialist who realizes our economy is controlled by the power elite who own the commanding segments of our economy, as they do in the United States, in Great Britain and in a large part of Europe. However, regardless of this unfortunate situation, I wish to congratulate the minister on his appointment and we all wish him well in all he undertakes to modify the ill effects of the system under which we live. I know he is well intentioned, as are most of the members of the house. All of us want to do something to improve the situation under which we live, by pecking away at it slowly from day to day.
I am one who recognizes that under a capitalist democracy it is parliament's role to do what it can to bind up the casualties of capitalism by labour legislation and by unemployment insurance, which in reality is an insurance against revolution. If we did not have unemployment insurance we would have unemployed workers marching down the streets of every city in the country. We all want to do the best we can with social legislation, and so on; but regardless of this, here we are living in this prosperous country, rich in natural resources, and we have hundreds of thousands of Canadians unemployed. Why? They are unemployed because parliament does not control the economy of the country. That economy is controlled by the power elite I first spoke of, whose first concern is the profits of their corporations and not the welfare of the Canadian people or their responsibility to them as a whole.
I give due credit to the minority who do something to consider the communities in which they live, and for the employees whom they employ. However I want to illustrate this situation briefly because it sticks in my gizzard when I think of it.
The other evening I mentioned a mine in British Columbia, the Reeves MacDonald mining company which is a subsidiary of a United

States corporation. The minister's parliamentary secretary knows all about it and I am sure he is sympathetic to the plight of the unemployed miners. Here is a company which refuses to pay its workers the going wage in the district, workers who have the moral support of all communities in the Kootenay area. This company, which made large profits and transferred them to the major holding in the United States, although it has this large Canadian natural resource, refuses to do the right thing by its employees.
Then there is the Falconbridge mining company which has done very well out of Canada and which has very valuable property in it. But because of automation and changing smelting methods it has laid off hundreds of men, and it does not consult the government of Canada to see what it can do for their benefit. However I am sure the minister will do all he can to modify the ill effects of this type of lay-off.
Then we have International Nickel, which has disclosed its intention to lay off about 2,000 workers, at a time while we in this house are trying to do what we can about the unemployment situation. I say without any hesitation that these large corporations are not accepting their responsibilities to the Canadian people and to parliament.
We have large coal resources in Alberta and British Columbia, and we have this manpower idle. I am not saying they can all be coal miners, but what are we doing? We are inviting capital from Japan to develop our coal mines.
Our farmers on the prairies have prospered in recent times, but we cannot pat ourselves on the back on that account. They are prosperous because of the needs of the people of China, the Soviet union and various other countries.
I want to emphasize the fact, and I do not think it can be satisfactorily denied, that powers beyond the control of this parliament actually dictate the direction of the economy, who shall work and who shall be unemployed. All we in parliament can do is bind up the wounds caused by the defects of the system under which we live. I say this without any fear of contradiction, and recognizing all that has been done by parliament to remedy the situation in, shall I say, a tidbit approach, which is the only approach it can take under these circumstances unless it is willing to face the situation head on and challenge these corporations.
Unemployment for thousands will continue as one of the effects of the system under which we live, periodic large scale unemployment, poverty for many people in our country,

low standards of living conditions, and insecurity for many people until parliament is willing to take action to own or control the major sections of our economy. When I say "control" that does not mean we are going to interfere with the day to day operations of corporations, but rather make them accept some responsibility as a result of their control of natural resources which have been granted to them by federal and provincial governments.
In wartime we can mobilize all our labour, create prosperity and do anything we wish to undertake that is physically possible. But in peacetime we sit here doing the best we can, improving this piece of legislation and that piece of legislation, and yet not really doing anything to solve the problem over a long term basis. In 1945, during the last world war loan, we raised over $2 billion in Canada.
I suggest we have got to meet this challenge head on in the not too distant future if we are to maintain democracy in this country and give the Canadian people the prosperity and security to which they are entitled. Parliament can meet these needs at the present time if it is willing to do that, if it is willing to challenge the power of these people who will not accept their responsibility, if it is willing to employ the capital resources of the country and say profits will not come first, but rather the welfare of the Canadian people. That is all I have to say, but I could not resist these few remarks.


Colin Cameron: I will not delay the minister too long from making his final comments, but there are a few things which have to be said when we are discussing this problem of unemployment. I should say, perhaps in contradistinction to my distinguished colleague from Kootenay West, I feel I am not so much an unrepentant socialist as an analytical socialist, and it is because I am an analytical socialist I feel some things have to be said in the context of this debate on unemployment.
I always have the feeling when we discuss unemployment that we are dealing in unrealities, or that we are trying to fit facts into a framework that no longer exists. I have much the same feeling when we discuss defence matters, that we seem so foolishly to be attempting to devise a policy for defence that is fitted to a set of circumstances that dissolve before our eyes.
I would like to put on the record one or two quotations from a document produced by a very responsible organization, the fund for the republic research organization in the United States, under the presidency of Dr. Robert M. Hutchins, president emeritus of Chicago university. They produce what they call occasional papers and they have issued
Supply-Labour
one quite recently called, "Consumers of Abundance" which is very apropos of our debate tonight:
The advance of science has for many years been undermining the two pillars of our economy- property and work. Each at length has fallen from its place. Property is no longer the primary source of economic power, and ownership no longer establishes the significant, functioning connection between people and the things they consume... Public understanding must eventually overtake this transformation in the relationship of modern man to his physical environment. Fundamental changes in the social order-in man's relationship to man- are therefore in prospect and are already in process... Full employment, for example, now seems to be not only an unattainable but an outmoded objective of economic policy. What takes the place of wages in a workless society? If such a question must be asked, then others follow. Does profit remain a useful standard of accounting in a propertyless society? But these questions are not only too big; they are premature. Before they can even be asked, the scientific revolution that occasions them must be more closely examined.
Then the paper proceeds to examine some features of the scientific revolution. There is one very interesting report concerning the Middle East with regard to which they say:
Obviously, the purpose in designing the automatic petroleum refinery is not to replace the one or two human operators who still remain on the payroll. This was the naive idea of a Middle Eastern petroleum prince for whom an American oil company was building a refinery not long ago. Out of consideration for the underemployed fellaheen who were to squat in the sand outside the refinery fence, he asked whether jobs might not be created by disengaging the robots from the valves. The engineers took him seriously enough to re-examine the entire control system. They had to conclude that no team of human beings could be trained and co-ordinated to do its work.
Then they have some interesting figures.
In the last 10 years, however, as the index of manufacturing output has climbed from 75 to 110, the number of production workers has hovered around 12 million. It is evident that the number is now due to decline. In the electrical industry, for example, production employment shrank by 10 per cent in the six year period from 1953 to 1959; during that same period production in this industry increased by 20 per cent.
Then they have this to say:
In the long run, larger questions must be asked and answered. If a fraction of the labour force is capable of supplying an abundance of everything the population needs and wants, then why should the rest of the population have to work for a living? Preposterous alternatives come forward: give away programs on television suggest that television might be employed to give the abundance away instead of trying to sell it. If production cannot be maintained at a profit under such circumstances, then why should a profit be made? Some other standard of accounting might serve even better to reduce waste and inefficiency.
Then they also say:
The nation's principal economic problem has become that of certifying its citizens as consumers of the abundance available to sustain them in tasks worthy of their time. What disturbs the scarcity economist, of course, is that such certification is likely to be provided by the public payroll. It

Supply-Labour
must be recognized, however, that these activities- along with urban rapid transit, the enhancement and conservation of natural resources, public works, the best kind of medicine, the operation of museums and so on-have never been or can no longer be conducted at a profit. Most of these activities and institutions are now short-changed. With abundance to support the expanding portion of the population engaged in them, we may anticipate that they will assume a higher priority in our civilization.
Then they go on to say:
A really adequate program of assistance to the underdeveloped countries might engage large numbers of disemployed factory workers in teaching their skills to people now entering on their industrial revolution. For some time to come, we can be sure, the real work that remains to be done in the world will stave off the spectre of universal leisure.
But I would point out that in order to do so there will have to be what some of us have been advocating in season and out of season for a very long time, that the productive capacities of our society must be placed at the disposal of such work. It will be impossible, for instance for Canada or any other industrialized country to play a significant part in this work of developing the undeveloped areas of the world unless the surplusses which accrue from our industrial society are made available for that work.
That will require a vast overhaul of our entire fiscal system. It will entail a vast overhaul of our whole system of private ownership. It will necessitate enormous public expenditures both directly within our country and in the shape of long term credits to these areas.
I suggest to you, Mr. Chairman, that until the government, either now or in the very near future, faces this problem it will be wasting its time and destroying the hopes of the Canadian people if it produces again and again these ideas that in some way or another we can solve the problem of unemployment in a world which has a decreasing demand for human labour and an increasing capacity for producing material goods. These are the problems we should be facing now, rather than introducing gimmicks to try to put one or two men to work here and keep them at work a little longer or retrain them in the hope that the job for which we retrain them will not disappear before they come on the labour market. Let us reorganize our economy and really solve this problem of production and distribution in a modern industrial society.


Allan Joseph MacEachen: Mr. Chairman, I will not take very much time in replying briefly to the comments which have been made by hon. members. First, I wish to thank all members who took part in the debate and who were kind enough to extend their good wishes to me and to the Department of Labour, and also to those members who pointed out to

me and the department ways in which the service of the Department of Labour could be improved. I want to assure members of the committee that each of the suggestions put forward tonight will be given the most careful consideration in an effort to apply them in the way that has been suggested by hon. members opposite and on this side of the house as well.
I might mention to members of the committee that in the past several months the energies and activities of the Department of Labour have been almost entirely absorbed in problems of industrial relations. I think it is a fact that in this field the Department of Labour carried the heaviest burden it has carried since away back in the war years, at least, according to some of the experienced personnel of the department. I certainly share the views expressed by the hon. member for Ontario and others with respect to the capacity and dedication of the officers of the Department of Labour.
But notwithstanding these other absorbing activities in the field of industrial relations we have been actively aware of and actively concerned with a number of other problems that have been raised by hon. members opposite. The national employment service is a very important service and I do not think its role has been overstressed at all by the discussion this evening. As I indicated on Tuesday, we have taken steps to strengthen the personnel resources of the national employment service to make it more aggressive and more effective in the allocation of manpower in Canada in a systematic way.
The Gill committee recommended that the activities of the national employment service could be strengthened by severing this service entirely from the unemployment insurance commission and placing it under the direction of the Department of Labour, so that the two phases of the manpower problem, the placement phase and the policy phase, could be properly interrelated and integrated to the benefit of both sides of the equation. At present this problem is under very active consideration and I hope that in the near future it will be possible for me to make an announcement indicating that some steps have been taken in this direction in strengthening the further work of the national employment service.
The matter of the labour code has been raised by the hon. member for Halifax, the hon. member for Winnipeg North Centre, the hon. member for Timiskaming and others. I certainly share their enthusiasm and interest in a national labour code covering most of the items enumerated by the hon. member for Winnipeg North Centre, which are also

in my own mind as the principal ingredients of such a national labour code. It is my view that it might be preferable to bring all these items together, if possible, into a single piece of legislation and have it regarded as a code setting a level for employment standards in Canada.
It is true that the national leader of the Liberal party indicated to the people of Canada in the last election campaign that this would be undertaken by a new Liberal government. As far as I am concerned as Minister of Labour, I have not lost my interest or my determination to pursue this particular commitment to a successful conclusion, and the Department of Labour has already undertaken very extensive preparations in the direction of the development of a national labour code. I hope that the words I used in reply to a question asked by the hon. member for Winnipeg North Centre will be appropriate and valid as time goes on.


Stanley Howard Knowles: How long does it have to go on?


Allan Joseph MacEachen: The words "in due course" are indefinite, but I hope they will not be so indefinite as to test the patience of the hon. member for Winnipeg North Centre unduly. We are working actively on this matter at the present time. I should like to be able to assure the committee, but I am not in a position to do so, that this problem will be dealt with at once, but it is not being neglected by any means and it is under consideration not only by the Department of Labour but by the government as a whole at the present time.
A number of other matters were raised. The hon. member for Winnipeg North Centre referred to the ratification of I.L.O. conventions. We are presently taking steps to ratify the convention with respect to discrimination in employment in occupations in Canada and are seeking the concurrence of provincial governments to ratify this convention at an early date.
I think these are the main general points raised by hon. members requiring immediate reply. All proposals which have been made with respect to the Industrial Relations and Disputes Investigation Act will receive consideration in an orderly development of the program to strengthen the efficacy of the Department of Labour in the fields I have enumerated.


Stanley Howard Knowles: I wonder whether the minister would summon up courage and assure us that these things he has talked about will appear before us in the form of legislative proposals not later than next session: amending the Industrial Relations and Disputes
Business of the House
Investigation Act; a national labour code; implementation of whatever is to be taken from the Gill commission report? I could go on, but if he would assure us of those three for the next session he would be a great Minister of Labour.


Allan Joseph MacEachen: Subject to the approval of a number of other persons directly involved,
I have no hesitation in saying that we will want to take action on the Unemployment Insurance Act and the labour code within the time mentioned by my hon. friend. I would be very rash indeed to give the same kind of assurance with respect to the Industrial Relations and Disputes Investigation Act because, as at the present time, I have not, nor has my department given the kind of consideration in depth to the proposals put forward to justify my giving an assurance of that kind. However, we will consider these proposals and perhaps at a later date I will be glad to add this particular suggestion to the rather optimistic prospect I have given in connection with the other two.


Gordon Minto Churchill: We are in a very co-operative mood tonight on this side and have not said a word for two and a half hours. Could we continue a little longer and pass this department? I point out the fact that by way of interim supply we have already passed eight out of the 12 months supply for the fiscal year 1963-64. Money has been spent and programs are going forward. There are still another 15 departments to consider before the Christmas recess and we are prepared to sit longer tonight and pass the department. However, if there is not a disposition on the part of the house generally to complete the department I am not sure we would want to sit more than another 10 or 15 minutes.


Stanley Howard Knowles: We are all in a co-operative
mood but we have been in session since eleven o'clock this morning, and many of us started at nine o'clock. Speaking for my friends over here we would be willing to let item 1 carry so that the general discussion will be over, but we feel the other items are important and deserve more consideration. With the passing of item 1 I think we should recognize it is ten thirty.


[Stage Direction]
Item agreed to.
Some hon. Members:: Ten thirty.
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: May I ask the acting house leader if he can outline the business for next week?

Business of the House


John Watson MacNaught: On Tuesday we will have a supply motion. On Wednesday we will take the third reading stage of the Income Tax Act. When that is completed we will consider the resolutions, first, respecting the appointment of a sessional committee on railways, air lines and shipping and, second, with respect to vocational training. I am not sure in which order these resolutions will be taken. I regret very much I cannot project the legislation beyond that stage but negotiations will go on on Monday to arrange something.


Gordon Minto Churchill: Tuesday.


John Watson MacNaught: I would remind the house that we meet at eleven o'clock on Tuesday.


The Acting Speaker (Mr. Batten):: It being ten thirty o'clock, pursuant to special order
passed on Friday, November 1, this house stands adjourned until eleven o'clock on the morning of Tuesday next.


[Stage Direction]
It being twenty seven minutes before eleven o'clock the house adjourned, without question put.
The following items were passed in committee of supply this day:

[Stage Direction]
A-Department General administration-
1. Departmental administration including grants as detailed in the estimates and the expenses of the international labour conferences, $1,290,400. la. Departmental administration, $15,000.
[Stage Direction]
Tuesday, November 12, 1963