1963-11-01

Hon. J. W. Pickersgill (Secretary of State):: Mr. Speaker, I wonder if I might be permitted to say a few words about the business of the house. I have made some inquiries, and to enable as many hon. members as possible to be present in their constituencies on Remembrance day I believe there would be unanimous consent if the house met on Tuesday, November 12, at 11 a.m., and it was understood that the supply motion would take one day instead of two. Of course there would be that extra time in the morning and the vote would be taken at 8.15 p.m., as is the usual circumstance on the second supply day. If there is unanimous consent it could be made an order of the house now, so that hon. members may make their plans for November 11.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, we agree
entirely with that proposal. The suggestion came from the hon. member for Vegreville that November 11 should be celebrated in keeping with the traditions of our country, and we are certainly happy that the house leader has come to this conclusion, which is contrary to that which the Prime Minister made the other day, that we sit on Tuesday at 11 o'clock and have that day for supply.


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


Some hon. Members:: Agreed.



PRIVILEGE


Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I am rising on a question of privilege which will be very briefly expressed. I draw attention to today's issue of the Globe and Mail which has a headline "Bases in France was P.C. error, Churchill says."
I made no such statement, Mr. Speaker. The record of the proceedings of the defence committee will be available early next week, and if anybody can find words in the record to
that effect I will then make a suitable explanation to the house. I think the committee and members of the press who were at the committee proceedings will bear me out that no such statement was made by me at that committee hearing.



FINANCE


[Stage Direction]
Hon. Walter L. Gordon (Minister of
Finance): Mr. Speaker, I should like to make a statement concerning the Municipal Development and Loan Act. Hon. members will recall that the purpose of this act is to promote increased employment in Canada by financial assistance by way of loans to municipalities to enable municipalities to augment and accelerate municipal capital works programs. The act provides for the establishment of the municipal development and loan board to administer the loans to be made under this act. It also provides that the board may enter into an agreement with any province wishing to do so, to make loans to such a province or to an agency designated by it, for the purpose of enabling that province in turn to make loans to its municipalities. Such loans are to be on the same terms and conditions as would apply in the case of loans made by the board direct to municipalities.
I wish to announce that the board has signed agreements with the governments of the four provinces which have elected to administer their share of the loan fund, namely Ontario, Quebec, Manitoba and Saskatchewan. In accordance with the terms of the act, the form of the agreements was authorized by the governor in council and, with the permission of the house, I wish to table copies in French and in English of the relevant order in council, P.C. 1963-1584 dated October 24, 1963. I wish also to table copies of the agreements between these four provinces and the municipal development and loan board.
The six other provinces have elected to transmit municipal applications for loans for approved projects to the board. Under this arrangement the administration of loans will be between the board as lender and the municipalities as borrowers. I wish also to table copies, in English and in French, of the Municipal Development and Loan Act regulations,
[Stage Direction]
Municipal Loan Fund
P.C. 1963-1594 dated October 31, 1963, which parallel the provisions of the provincial agreements.
In order to administer loans to municipalities in the provinces of British Columbia, Alberta, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland, in accordance with section 6 of the act, the board has entered into an agreement with Central Mortgage and Housing Corporation for the use of its branch office personnel, facilities and services.
The signing of agreements by Quebec, Ontario, Manitoba and Saskatchewan, and the making of the necessary regulations and arrangements with the other provinces, has cleared the way for operations under the act. The board is now prepared to process applications.
I should like also to announce that the governor in council has prescribed an interest rate for loans made by the board. For the last quarter of 1963 an interest rate of 5| per cent has been established. This rate will be reviewed quarterly. Because repayment of 25 per cent of the federal loan may be forgiven for projects completed on or before the 31st day of March, 1966, the effect will be to provide funds to municipalities at an effective rate ranging from 2.05 per cent on a 20 year loan to zero interest on a loan of only 10 years. This is the feature we expect will prove most attractive to municipalities and encourage them to accelerate their capital spending.
The chairman of the municipal development and loan board is Dr. K. \V. Taylor, special adviser to the privy council. Mr. Jean Miquelon, under secretary of state is vice chairman. The other members of the board are Mr. R. B. Bryce, deputy minister of finance, and Mr. Stewart Bates, president of Central Mortgage and Housing Corporation. Mr. J. C. Kerr is executive director and secretary.
Hon. Michael Starr (Ontario):: This statement seems to be one in a long series of announcements in respect of this municipal loan fund that the government has been making from time to time over the past number of months. I think it has been their intention to bring into focus this policy of the municipal loan fund to provide the answer to the unemployment situation in Canada. I can well understand why they are making this announcement and framing this particular municipal loan fund in this way, because to date the government have not brought forward any policy to deal with unemployment in this country in a constructive way.

I am not one who wishes to be a pessimist in respect of this matter, although it is a very serious matter in this country at any time when people are unemployed. However, I do want to point out that in my opinion the municipal loan fund is not going to create any new jobs in this country at all. That is borne out by the fact that the municipalities are not going to take on any new projects. The municipalities are not going to incur new debts, because the capital debts of the municipalities are pretty high now. However, they are going to take advantage of this in simple projects for which they had anticipated and planned. They will be able to get a lower rate of interest, and of course the forgiveness clause is an asset to the municipalities also. Therefore in that respect the municipalities are going to benefit as a result of this. But as far as jobs are concerned I want to say now that in my opinion this municipal loan fund will not provide any new jobs at all.


Mr. R. W. Prittie (Burnaby-Richmond):: Mr. Speaker, we in this party are pleased that the government have concluded arrangements with the provinces in this matter. I suppose this is a good example of co-operative federal-provincial action; four provinces have gone one way and six another. Nevertheless we are pleased that these arrangements have been made. The only criticism we would make would be that made at the time the bill was given second reading, namely that the fund is really too small to make a very great impact on unemployment. It is useful for municipalities who can afford to borrow, and there are reasonably favourable interest rates. But we repeat what was said earlier, that for a dramatic impact on unemployment in Canada the fund should be larger and have more forgiveness clauses than it has at the present time.


Mr. Maurice Cote (Chicoutimi):: Mr. Speaker,
we welcome the announcement just made by the Minister of Finance (Mr. Gordon) on the implementation of this new municipal development and loan board because on many occasions we advocated the setting up of that body in the past, and we consider it is a move in the right direction.
It seems that this board will surely be helpful. If you consider that the rate of interest is 5i per cent, that in itself is an improvement on the money market rate.
I note that the government has concluded an agreement which avoids intruding upon provincial autonomy, and that is an excellent thing indeed. On the other hand, I submit that this might not resolve the acute unemployment problem we have at present, and

I point out that our group made very definite suggestions to set up a real municipal credit bank, which would be much more practical.
But, as I just said, it is a move in the right direction and I hope that before long, with the experience gained from the municipal development and loan board, we will be in a position to set up a real municipal credit bank which could more effectively alleviate the burden of municipalities which have to undertake improvement works.


Mr. Real Caouelle (Villeneuve):: 

ENGLISH DEBATES


John Whitney Pickersgill: If there is unanimous consent I should like to move, seconded by the hon. member for Prince:
That the report of the survey of the English debates reporting branch of the House of Commons tabled by Mr. Speaker be referred to the standing committee on debates for immediate consideration and report.


[Stage Direction]
Motion agreed to.
Sugar Price Increase SUGAR


Robert William Prittie: ask leave to move, seconded by the hon. member for New Westminster:
That the house adjourn, under standing order number 26, for the purpose of discussing a definite matter of urgent public importance, namely the constant increase in the price of sugar.
Since January 1 of this year sugar prices have changed more than 90 times. Since this session of parliament started 26 members representing all parties have asked 40 questions on the matter of sugar prices. This large volume of questions on the one subject reflects the concern of many thousands of people in the country, particularly housewives.
To most of these questions by members the government has said in effect "We can do nothing". We do not feel this answer is good enough for a matter of this importance. The people expect some action from the government on a matter which they cannot handle themselves. Other governments have done something about it. The government of the United Kingdom has a sugar control board which makes long term contracts. The United States-


John Whitney Pickersgill: On a point of order, Mr. Speaker, I wonder whether Your Honour would consider the request of the hon. gentleman before he embarks upon a debate. I think that is the usual procedure.


Robert William Prittie: On the point of order, I was merely trying to point out the need for debate at this time.


Mr. Speaker:: I have listened with great interest, of course, to the remarks of the hon. member. I think he is entitled to make a short explanation. Was he just about to conclude that short explanation?


Robert William Prittie: Yes, I was, Mr. Speaker. I pointed out that we have had the reply from the government that nothing can be done, and that other governments have taken action. I suggest finally that we should give some consideration to consumer support prices in the same way we do with regard to producer support prices. The important point is that this matter needs to be aired in the house and not merely in the question period.


John Whitney Pickersgill: Does Your Honour wish to hear any argument on the point or is Your Honour prepared to make a decision without argument?


Mr. Speaker:: I am prepared to make a decision. It may not be very popular, but it is my duty. There are at least two points

Sugar Price Increase
to be considered. One is urgency and the other is opportunity. Under the heading of urgency may I say that this matter has been talked about, considered and discussed. It may not have been done too thoroughly, but at least it has been raised over a period of several days.


An hon. Member:: Just like the price.


Mr. Speaker:: The question of opportunity is, of course, easier to deal with. Surely there will be an opportunity next Monday at the latest. Therefore in the circumstances I do not think that the motion of the hon. member justifies the conditions set out in standing order 26 for the adjournment of the ordinary business of the house for the purpose of discussing a definite matter of urgent public importance. In view of the opportunities which will be available presently I do not believe the motion comes within the conditions required and the general understanding of standing order 26 in accordance with the precedents. Therefore I do not believe the motion is in order.


Mr. T. C. Douglas (Burnaby-Coquitlam):: On the point of order, may I point out with reference to the question of opportunity that the opportunity of dealing with this matter on Monday to which Your Honour has referred lies almost solely within the purview of the official opposition, since they have the right to move the amendment to the supply motion and that amendment will govern the debate which follows right up until the vote is taken at 8.15 on Tuesday evening. Unless the member is fortunate enough to catch Your Honour's eye subsequently in the very short period between the taking of the vote and ten o'clock, there is really no opportunity to discuss this matter. Therefore the supply motion does not give members in all parts of the house an equal opportunity to raise a matter of such urgent importance as we deem this to be.


John Whitney Pickersgill: Mr. Speaker, with respect to the point just raised by the hon. member for Burnaby-Coquitlam I would point out that one of the friends of the hon. member who has just sought to adjourn the house was recognized on a grievance as recently as last Tuesday, and did not see fit to raise this question. So this suggestion that there is no opportunity to do it does not appear to be in accord with the actual and very recent facts in this house. It does seem to me that Your Honour's ruling is completely in accord with the practice over the years.


Mr. Raymond Langlois (Meganlic):: Mr. Speaker, I would like to draw the attention of the Secretary of State to the fact that this

motion is somewhat like one I had last Thursday week, and I delayed it until last Monday or Tuesday so that we could debate it. We all know that the amendment then proposed dealt with nuclear arms and not with agriculture, and after that I did not have the opportunity of catching Your Honour's eye for grievances, when debate turned to the pension plan. The agricultural business is still not discussed, and the St. Lawrence seaway is freezing up. If it keeps up this way the same thing will happen with respect to a discussion of sugar prices, and I believe the question should be discussed today in the house.


Mr. D. S. Macdonald (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, to supplement what the Secretary of State has already said, the opportunity arose for the hon. gentleman in question to speak on this question on the estimates of the Department of Justice, which were before the house last Friday night. That opportunity was taken by the hon. member for Vancouver Quadra to discuss this subject, but neither the hon. gentleman nor I believe any member of his party or any other hon. member of the house took part in that discussion. I suggest that those estimates will be coming up again in the very near future and that they will provide an opportunity for all hon. members to discuss this question.


John George Diefenbaker: Mr. Speaker, this has taken a strange turn. You made a ruling, and following the ruling various members of the other parties have been making statements respecting this matter.
The failure to make any statement at this time is not to be taken as the attitude of the official opposition against this motion. We have been inquiring about this matter ever since the month of March, but without success. However, I suggest that if there is going to be difficulty discussing this matter on the supply motion on Monday or Tuesday, now that the Minister of Agriculture is back in the house possibly the committee on agriculture should deal with this and discuss it at length, because it needs to be discussed and considered. The rise in the price of sugar is beyond anything that can be excused, and this government has done nothing.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I would ask the

Minister of Labour whether he is in a position to advise the house as to whether there were any Canadian ships in United States ports that have been refused loading opportunities, and whether there are ships designed for Canadian trade in United States ports which have been interfered with, which according to the press is a fact. Then I ask the further question, has he been in touch with the United States administration in the last couple of days in this regard, to protest against what is being continued, and what are the prospects of the objections taken being seriously recognized by the United States?


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, with respect to the harassment of Canadian shipping in United States ports, the most recent incidents that have come to my knowledge occurred on the past week end, involving three ships, the John Ericcson in Chicago and two others which were subsequently cleared either at United States or Canadian ports. There was a report this past week that a picket had appeared against a Canadian ship at Toledo, but apparently that ship has successfully cleared the port. We have been keeping a very close eye on this matter, and to my knowledge those are the only incidents reported.
I have made no representations within the past two days to the United States authorities, although I understand that the Canadian ambassador in Washington has been following this matter, and for details I would rely on my colleague the Secretary of State for External Affairs.


John George Diefenbaker: Possibly the Secretary of State for External Affairs could bring us up to date on this matter.


Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, as the Prime Minister indicated the other day, this matter has received the attention of the Canadian embassy. Our ambassador is following the matter continuously. There is nothing more to report except that our ambassador in Washington has very recently indicated the continuing concern of the Canadian government in this matter.



REQUEST FOR REPORT ON INJURY TO SEAMAN

[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I would like to ask the acting minister of justice or the parliamentary secretary to the Minister of Justice whether the minister has yet received a report from investigators concerning the injuring of a seaman on the train going back to Toronto several days ago, the man who was taken off 28902-5-273
Inquiries of the Ministry the train and hospitalized in Smiths Falls, and other reported incidents of a similar nature.


Donald Stovel Macdonald: Mr. Speaker,
I am not in a position to answer the hon. member's question at the moment, but I will bring it to the attention of the minister-


Mr. Pugh:: Only a week has gone by.


Donald Stovel Macdonald: -and I am sure we will have an answer for him.



SHIPPING INDUSTRY-REVOCATION OF APPROVAL RESPECTING VACATION PAY ARRANGEMENTS

[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, I would like to direct a question to the Minister of Labour and ask him, in view of his announcement revoking the vacation pay plan, if he can tell the house whether the money that was in the hands of the S.I.U. has now been turned over to the employees.


Allan Joseph MacEachen: I am sorry; I did not get the first part of the hon. gentleman's question.


Michael Starr: I would like to repeat it. I asked the minister if in view of his recent announcement revoking the vacation pay plan of the S.I.U., has the money in their hands been turned over to the employees yet?


Allan Joseph MacEachen: I would like to take this question as notice, Mr. Speaker.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I would like to direct a question to the right hon. Prime Minister. In view of the proposal made by General Norstad that nuclear action should be vested in the heads of the governments of the United States, Great Britain and France, would the Prime Minister give to parliament and the country an unequivocal assurance that Canadian forces under NATO will not be involved in nuclear action without the prior consent of the Canadian government?


Right Hon. L. B. Pearson (Prime Minister):: I can certainly give that unequivocal assurance. The proposal of General Norstad, which I have read only in the press, seems to be one this government could not in any circumstances support.

Inquiries of the Ministry LABOUR CONDITIONS



FALCONBRIDGE NICKEL


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, my question is directed to the Minister of Labour.
Could the minister tell the house whether there have been any changes in the lay-off at the Falconbridge nickel mine.


Allan Joseph MacEachen: Mr. Speaker, this matter of course is one for the authorities operating the mine. As I have stated in the house, the employees have made proposals with respect to the sharing of future employment at this particular mine. The federal government told the employees that the unemployment insurance commission was prepared to co-operate with that aspect of the proposal which involved federal activity.
My colleague the Minister of Mines and Technical Surveys has been directly in touch with the management of the mine, and I myself have directed inquiries to the mine expressing concern at the prospective layoffs and assuring that we were ready to cooperate in the proposal made by the employees.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a supplementary question for the Minister of National Revenue. In view of the number of personnel involved who are purchasing houses under the National Housing Act, could the minister give his assurance that a moratorium will be declared on payments and that no foreclosure actions will be brought against these people who are purchasing homes under N.H.A.?
Hon. J. R. Garland (Minister of National
Revenue): Mr. Speaker, I would be glad to take notice of the hon. member's question.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I would like to direct a question to the Minister of Fisheries. Has the minister arrived at any decision with respect to the request for emergency financial assistance to B.C. fishermen who are facing extreme hardship because of the very stringent closure regulations imposed this fall?


Hon. H. J. Robichaud (Minister of Fisheries):: Mr. Speaker, with reference to the last part of the hon. member's question I must say that the extreme hardship facing some of the B.C. fishermen is not entirely due to very stringent closure regulations imposed this fall, as the best part of the fishing season was lost through voluntary restraint by the fishermen concerned. The closure regulations referred to were essential for the conservation of our salmon resources on the west coast.
With respect to emergency financial assistance, I must state that there are no existing provisions within the department for such assistance, and therefore I cannot give an affirmative reply to the hon. member's question.


Mr. Frank Howard (Skeena):: As a supplementary question, I would like to ask the minister if he recalls that both during 1962 and earlier this year, 1963, it was the contention, by way of a promise of his party, that everything possible would be done to assist fishermen to obtain full time employment by dredging of streams, rehabilitation of salmon spawning waters, the building of harbours, breakwaters and the like; and whether the minister has forgotten this particular promise.


Hédard-J. Robichaud: No, I have not forgotten such a promise, and everything is being done to help the fishermen from coast to coast. It is not our fault that they did not fish.


Robert William Prittie: would like to ask the Minister of Fisheries whether he is aware of the fact that those who were fishing during the period of the strike, those not on strike, had smaller catches than average.


Hédard-J. Robichaud: Yes, it is true the catch was not comparable to the 1962 catch, but the fact remains that during the best part of the fishing season all fishermen on the B.C. coast were on strike, although some started to fish a little earlier than others.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Hon. Paul Martineau (Ponliac-Temisca-mingue):: I have a question for the Secretary of State. In view of the widespread report that there has been an increase of from $20,000 to $35,000 or more in the salary of the president of the C.B.C., Mr. Ouimet, will the minister state whether in fact his salary has been increased recently, and if so by how much?


John Whitney Pickersgill: 

BRIDGES


[Stage Direction]
On the orders of the day:
Mr. Rerrii Paul (Berthier-Maskinonge-De-lanaudiere):: Mr. Speaker, I should like to put a question to the Minister of Transport, of which I gave him notice.
Following his meeting yesterday with Mr. Francois Nobert, of Three Rivers, and Messrs. Demers and Lemieux, engineers, is the minister in a position to state whether the government intends to set aside the authority given by the former government for the building of a bridge on the St. Lawrence river between Three Rivers and Ste Angele?


Hon. G. J. Mcllrailh (Minister of Transport):: No, Mr. Speaker, I am not ready to make any such statement.


Rémi Paul: Mr. Speaker, may I ask a supplementary question?
In the circumstances, could the minister make an official statement to clear up any doubt concerning the carrying out of this project?


George James McIlraith: Yesterday, Mr. Speaker, I had a meeting with the secretary of the Trois Rivieres Bridge Corporation, and as well a meeting of the engineers of that corporation took place with engineers representing the various federal government departments directly involved. There was a discussion of technical and related matters between the authorities. A further meeting will take place as studies of the problems concerned proceed.


Hon. Leon Balcer (Three Rivers):: May I
ask a supplementary question. Can the minister tell us if he is reserving the same fate for the Three Rivers bridge that was accorded the Gaspe railway?


George James McIlraith: No, but I have been somewhat appalled at the treatment this subject
received from my predecessor in office.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. O. W. Weichel (Waterloo North):: I have a question for the Secretary of State for External Affairs. It refers to the arrest of Ronald Lippert of Kitchener, which is in my riding, and his associate, both air line pilots, by President Castro of Cuba charging them 28902-5-273J
Inquiries of the Ministry with sabotage. Will the minister look into this serious charge and extend every assistance to these Canadians?


Paul Joseph James Martin: I indicated, in answer to a question put by the Leader of the Opposition yesterday, that the Canadian consul had interviewed the two Canadian prisoners. We are following the matter carefully. The latest report is that they are being well treated. We are now awaiting further information on the nature of the specific charges against them.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Reg Cantelon (Kindersley):: I should
like to ask the Prime Minister if he has received a letter from Mr. L. I. Thorson, executive secretary of the Saskatchewan school trustees association, requesting that local school boards be entitled to share the benefits of the municipal development and loan fund. Is he now prepared to consider extending the benefits of this act to school districts?


Mr. Speaker:: May I suggest that this is a question for the order paper.



SUCCESSION DUTIES


[Stage Direction]
On the orders of the day:
Maurice Côté: Mr. Speaker, I should like to direct a question either to the Minister of Finance or to the Minister of National Revenue. Has either one knowledge of the recommendations made by the association of trust companies of Canada requesting that exemptions in regard to estate taxes be increased from $60,000 to $100,000, and is it intended to put this proposal into effect in the near future?


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, I did see something in the newspapers to this general effect, and this is one of the things which will certainly be considered in due course.



REQUEST FOR INSTALLATION OF TRANSISTOR RADIOS IN GALLERIES

[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: I should like to address a question to the Secretary of State. Will he advise the house whether

Question of Privilege
active consideration is being given to installing a small transistor radio under each seat in the galleries so the simultaneous translation of speeches in the house may be heard? This is a system that does not require the use of wires, and worked with a great deal of effectiveness at the national Liberal women's convention in the Chateau Laurier.


Mr. Speaker:: I am sure the hon. member will put that question on the order paper in due course.



INQUIRY AS TO OCCUPANT OF ROOM 645N

[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, may I put a question to the Secretary of State?
Since some members of the Ralliement Creditistes must double up in their offices in the main block of the parliament buildings, could the Secretary of State inform the house by what right a certain individual who is not a member of parliament occupies room No. 645N?


John Whitney Pickersgill: I will look at the question when it appears in Hansard to see what I can say by way of reply.



PRIVILEGE


Mr. H. A. Olson (Medicine Hat):: I rise on a question of privilege, Mr. Speaker. On the front page of the Globe and Mail today there is a headline which reads "House Speaker accused of flagrant injustice." The headline goes on: "Refused three connecting offices, Caouette calls it national shame."
I should like you to know, Mr. Speaker, that in keeping with the practice that has been followed in this house of granting more than one office to the leaders of groups I, along with our whip, made a reasonable offer to exchange four rooms with the hon. member for Villeneuve and his group for four other rooms. They chose to reject this offer. Therefore, Mr. Speaker, I wish to accept all the responsibility for not moving out of the office adjacent to the office now occupied by the hon. member for Villeneuve, and to absolve you and all of the other officers of this house from what the hon. member for Villeneuve has called a "new national shame", "outrageous injustice" and "ignoble treatment tolerated by the authorities of the federal parliament."


David Réal Caouette: Mr. Speaker, with regard to the question of privilege on which the hon. member for Medicine Hat (Mr. Olson) has risen, I wish to state that the title of the article published this morning in the Globe and Mail is not the same as the title of the statement I gave yesterday to the press.
The hon. member for Medicine Hat asserts that he has offered us some offices; well, I must say that neither he, nor the members of his group are entitled to offer anything of the kind. Actually, it is only the House of Commons authorities who are empowered to allocate offices, and this very question was discussed in your own office, Mr. Speaker, in the presence of the Sergeant-at-Arms. At that time, 14 offices had been allocated to us but now we only have 12 offices for 13 members. Two members of our group are sharing the same room.
We did not ask for any changes, except for the addition of an office, adjacent to my own room, on the sixth floor. That is all we have asked for, and two of our members are ready and willing to stay in the same office.
However, the hon. member for Medicine Hat wishes to bring about considerable changes; he would like to see some of the members, who are actually in the west block, move to the centre block.


Some hon. Members:: Order.


David Réal Caouette: Mr. Speaker, I am still speaking on the question of privilege.
My hon. colleague for Medicine Hat would also want to see the members of our group who are at the moment in the central building, move to the west block. Now, it is not the responsibility of the hon. member for Medicine Hat to settle that matter.
All we want is a sufficient number of offices for all the members of our group, so that we will be on an equal footing with all the other parties in the house.
We merely ask for justice, and we do not want this question of privilege to be misinterpreted. We do not ask for special favours, we merely ask for a just and fair treatment.


Frank Howard: I should like to say a word on the same question of privilege, Mr. Speaker. It would be very interesting for the house to ascertain if it was the staff of the House of Commons who were employed to remove the picture of the hon. member for Red Deer from the office of the hon. member for Villeneuve.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: rise with a certain degree of fear and trembling, Mr. Speaker, but I think I am justified owing to the fact that I have a number of constituents who have to make preparations to appear before the external affairs committee, that is with regard to leave from employment, domestic arrangements and so on. Will the Secretary of State for External Affairs inform the house if he expects the Columbia river treaty will come before the committee prior to Christmas?


Paul Joseph James Martin: We shall have to wait and see.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Joliette-L'Assomption-Montcalm):: Mr. Speaker, I wish to direct a question to the Prime Minister. Does the government intend to take action following the brief submitted by the Gaspe North chamber of commerce, requesting the construction of the Gaspe railroad as soon as possible?


Lester Bowles Pearson: This is a matter with which I cannot deal on orders of the day but I will look into it.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North
Centre): Mr. Speaker, may I direct a question to the Minister of National Health and Welfare. In view of the increasing extent to which the recent old age pension increase is being nullified by provincial action would the minister consider making an appeal to the provinces to delay their hand in this matter until it can be discussed at the federal-provincial conference which is called for November 25?
Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: I would be more than happy to do so, Mr. Speaker.
Inquiries of the Ministry HOUSING



REQUEST FOR FINANCING OF EXISTING HOMES

[Stage Direction]
On the orders of the day:
Oscar William Weichel: have a question for the Minister of National Revenue. Many people in Waterloo North and other places across Canada are intensely interested in the possibility of Central Mortgage and Housing Corporation making loans on older homes. Knowing the minister's interest in this question when he sat on this side of the house could he tell the house if he intends to introduce amendments to put such a plan into effect?
Hon. J. R. Garland (Minister of National
Revenue): Well, Mr. Speaker, I suppose the short answer to my hon. friend's question would be, we must put first things first. However, in view of his great interest in this subject and his courtesy in giving me notice of this question, I may tell him that it has been the policy of this government to take all steps possible to ensure that sufficient new homes are built to meet the needs of Canada's rapidly growing population, and to ensure that these homes are available with the lowest possible cash down payment.
Toward this end, since June the government has reduced the monthly carrying charges by lowering the National Housing Act interest rate, and has lowered the down payment by increasing the amount of loan available. In addition, Central Mortgage and Housing Corporation has been authorized to make direct loans on a very substantial scale in the last quarter of this year in support of the government's winter incentive housing program.
I am happy to inform the hon. member that this program is proceeding very well indeed, and that total housing starts for 1963 will exceed those of 1962. To support this program it will be necessary for the government to make available to Central Mortgage and Housing Corporation approximately $250 million in 1963 for National Housing Act lending. This is additional to the money invested for National Housing Act purposes by Canada's lending institutions. As long as massive support is required from public funds for the new housing program, it would be difficult to extend the facilities of the National Housing Act to all existing housing.
I can assure the hon. member that this matter is given frequent and sympathetic consideration, and when it is possible to announce a change in policy that announcement will be made in this house in the usual way.

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CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I should like to direct a question to the Prime Minister and ask him what plans are afoot to replace Colonel Jones, who I understand recently resigned from the position of acting deputy minister of citizenship and immigration.


Lester Bowles Pearson: Mr. Speaker, this is a matter of departmental administration. I cannot answer the hon. gentleman's question except to say that an appointment of a new deputy minister to this department will be made very shortly.



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[Stage Direction]
The house resumed, from Thursday, October 31, consideration in committee of Bill No. C-95, to amend the Income Tax Act- Mr. Gordon-Mr. Lamoureux in the chair.
On clause 1.
John George Diefenbaker: Mr. Chairman, at the adjournment last evening the hon. member for Edmonton East was speaking, and he has been kind enough to give way to me, an act which I appreciate very much, knowing as he does that I have an appointment very shortly. Today I am just going to review very briefly and as succinctly as possible the budget situation. I am going to refer to some of the suggestions and plans made by the parliamentary secretary to the Prime Minister who a few days ago visited Vancouver and placed his views before the people of the province of British Columbia. In view of his propinquity to the Prime Minister I am sure those views represent a degree of official thinking.
I am not going to deal with the budget in detail. I think it can be said that the budget introduced by this government pursuant to the Pearson plan which was four years in preparation has been subjected to more criticism than any other similar document or plan which has ever been presented in Canadian history. The trouble with it is that the Minister of Finance says this has been covered over and over again. I ask, what has been covered? The budget that was born with hope has become abortive with the passing months. It is difficult to know just what remains today of the budget, for as soon as various sections were assailed the government withdrew them. This has been a budget noted not for what it provided but for what has been withdrawn from it.
The minister said there had been 15 votes .of confidence this session. Well, they have

not been votes of confidence on the budget submitted by this government. The longer the delay in finally presenting the bill in question to implement the budget, the greater the withdrawals and retreats, the alterations and changes. The minister stated that business people in Canada should know what the budget will do, and that this bill should be passed. Certainly business people and people in general have been asking over and over again what manner of nonsense activated the Minister of Finance in bringing in the budget in question. This bill is to implement some of the remaining remnants of the budget which was introduced with such cavalier arrogance only a few months ago.
This budget which was introduced rocked Canadian business. It interfered with the operations of Canada's capital market. It shook up the stock exchanges of Canada. It destroyed confidence, and all of this in a few months. The Minister of Finance smiles. I am not going to read what Mr. Kierans thought of it, and he is one who certainly has not been a supporter of this party and is today a minister in the government of Quebec. Any time the minister feels like smiling over the debacle of his budget I need only refer him to a reading of the views of Mr. Kierans.
This budget which was produced went underground; now it is coming back to the surface in bits. It brought about an erosion of relations with the United States. Never in the history of this country has a document such as the budget done more to harm our relations with the United States. All the honeymoon of Hyannis Port was dissipated in a few short weeks when, without any justification, a 30 per cent sales tax on foreign purchase of securities was introduced in this house by way of suggestion.
Then the next plan was to buy Canada back, and the government is trying to do this on the instalment plan. Over and over again the minister used to speak of buying Canada back. While on the one hand one minister takes that stand, the other minister, the Minister of Trade and Commerce, goes across the country speaking about free trade with the United States. He invites investment in Canada. The Secretary of State for External Affairs says we will welcome the new co-operation and partnership between the United States and Canada in connection with development. While these hon. gentlemen speak in that way the Minister of Finance does everything possible to undermine and destroy the probability of investment within our country. He speaks of confidence. I ask, how many changes have been made? Here is a government which introduces a budget

and then has no confidence in its own financial policy. It withdraws, it revamps, it revises, it removes whole sections. There is little of the original budget left intact.
I am not going to deal with the budget in detail except, so far as it is necessary, to refer to two or three portions of this bill which are completely unworkable. Neurotic nonsense is comprised in clauses 28 and 16. Clause 28 deals with the degree of Canadian ownership and control, and the hon. member for Simcoe East dealt with this matter yesterday. I ask anyone to read section 139A of the act and make any sense of it at all. That section can only detrimentally affect Canada, investment in Canada and the expansion of Canada. With regard to clause 16, which is amending section 71A relating to manufacturing or processing businesses and the action to be taken in that regard, subsection 3 is entirely unworkable; and if the interpretation which has been given to it is correct it is meaningless in so far as achieving the purposes for which it was intended.
The businessmen want to know, he said, what the rules are. Sir, no government in so short a time has revamped and retreated in the way this government has done. Here is all that remains of Bill C-95. The minister said it has been fully debated. We discussed the budget. It was debated and voted on, and then the minister's own colleagues showed they had very little confidence in their own budget. In fact they voted non-confidence in it by the changes which were made.
I was very much interested to read the views of Mr. Bruce Hutchison, who in a sense is the philosopher and soul of Liberalism. He was here in Ottawa recently, and he wrote a series of articles on the Ottawa scene. He felt there were differences within the cabinet. He said the cabinet is apparently divided between those who are practical and those who are theoretical. He writes this:
To say that the government is turning to the right would be a misleading definition but certainly it is turning toward more practical policies as the real power of the inner cabinet is flowing from the academic to the practical men.
I do not want to engage in a Gallup poll to find out which are the practical ones and which are the academic ones. Oh, the Secretary of State identifies himself as being that. Now is there anyone else who wants to join with him by way of identification? The hon. gentleman, for one, has admitted he is not practical. What about the Minister of Finance? Is he in the academic group? The article goes on to say:
There is the nagging problem of the budgetary deficit likely to be as large this year as last, or larger. If it lives by debt in the present magnitude, says Mr. Gordon, Canada will land "on the rocks."
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How is he to arrest this rake's progress? By cutting costs? By higher taxation? Or by waiting for economic growth?
Then it goes on:
Canada's economic relations with the United States are gravely misunderstood by most Canadians, including some members of the cabinet-
This is the man who worships this government. He says some of you people opposite are impractical and you are getting behind. I wonder if the Minister of Finance is in that group. I hope he stays in his place. I do not like to see him criticized. I made a forecast recently that he would be out. The only reason he is still in is because I made that prediction.


John Whitney Pickersgill: Is that the reason you did it?


John George Diefenbaker: No, I have not yet got
any of that practical sense which characterizes the Secretary of State at all times. That would have been his way of going about it. But I am glad the hon. gentleman admits that in the conclusion I just came to I was speaking correctly.
Do you remember how the businessmen across Canada used to worship at the Gordon throne? They said "There is a man. There is a leader." During the four or five years when we were in office they said "We will put him on a pedestal. He has a plan." Does the minister remember that?


An hon. Member:: He fell off the pedestal.


John George Diefenbaker: He now joins the ranks of the academic. Remember, Mr. Hutchison was down here; he saw the Prime Minister, and it has leaked out that he whispered in the Prime Minister's ear that Gordon must go. That is the report which is general across the country. Well, he says that certain ministers are growing fast.


An hon. Member:: Fat?


John George Diefenbaker: I am not going to argue that. I am just quoting Mr. Hutchison. He says certain ministers are growing fast. If I asked for a Gallup poll on that, they would all be standing. But Mr. Hutchison says this government is changing from the academic to the practical. Well, what have they done about relations with the United States? I remember that the Prime Minister said on March 27 in Regina:
A new Liberal government will not as at present irritate them-the United States-gratuitously in a way which hurts our own country.
The Secretary of State for External Affairs put it in more grandiloquent language when he spoke to the Lions International in Miami:
Investment from abroad is as welcome today as ever. I assure you it will always be fairly treated in Canada.

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While he was saying that, the Minister of Finance was plastering a 30 per cent sales tax on securities. The Secretary of State for External Affairs-I have a great affection for him; he is a dilettante with language; he can make you believe anything when he gets up with his smile-went on to say:
We want to provide for effective and harmonious participation for foreign investment in Canada.
No wonder Bruce Hutchison says the division between the practical and the academic is rapidly disappearing by the removal of the academic from power within the cabinet.
Then there is the Minister of Trade and Commerce, who had this to say in Chicago on June 20. He is reported as follows:
Mr. Sharp said last week's Canadian federal budget dealing with foreign investment in Canada set guide lines for United States investors in Canadian enterprises and proposed legislation to permit closer partnership.
I do not intend to quote what every financial paper in Canada and the United States has said, that this drives out investment. What has been the result of their actions? What is their idea of Canadian-United States relations? The Prime Minister gave his definition when he spoke at the Iron bridge as reported in the Kingston Whig-Standard on August 20:
As free people In what is left of the free world we are all fortunate in having as our neighbour a great democracy. It has to lead us.
On one hand one of them says "Let us restore to Canada the right to determine her economic future" and on the other the Prime Minister says "We want to run our own affairs but we shall have to let them lead us".


Erik Nielsen: By the nose.


John George Diefenbaker: Then there was the
budget. Do you remember how it came in? Everybody was agape. The four year plan we had heard so much about was opened. Somebody once said in this house-his classical information was not very correct-that the Minister of Finance opened Pandora's box and out stepped the Trojan horse. That was used many years ago, that particular phrase, but certainly when the treasury box was opened on the day of the hon. gentleman's budget, out stepped a Trojan horse, the Trojan horse which was going to control United States investment from within.
What a record it has been. President Kennedy decided to impose a tax of up to 15 per cent on Canadian stock issues floated in the United States. He did so. Then what happened? There was another pilgrimage to Washington. Down they went for what the Prime Minister described as diplomatic discussions. They said "You can't do that to us".

Then hon. members will recall all that was said about the car parts. For three long years we heard about the hundreds of millions of dollars which these car parts would produce for Canada if manufactured here. They said "We are going down there to tell the secretary of commerce and the administration in Washington exactly where we stand". Three or four ministers went down. Then they came back and said the United States did not understand them. Then the United States congress killed a United States defence order for the Canadian Caribou transport plane. "Buy Canada back" is what the Minister of Finance says. The Financial Times in an article on August 19 said this:
Ironically, what Mr. Gordon had to change was the Liberal economic policy of the "boom decade" of 1945-1955. This resulted not only in an almost complete surrender to the need for foreign capital which permitted it to enter Canada on its own terms, but in an indifferent commercial policy which failed to prevent foreign imports from seizing sizeable portions of the domestic market.
From 1945 to 1955 they gave Canada away, and now one of their ministers is talking about buying it back. Do I overstate the case? I have to leave in a few minutes, so I will have to give my speech in serial form, as the budget was introduced. We have been getting it by sections. First they produce a bit and then there is criticism. Then they withdraw; then they substitute.
Somebody will say that I overstate the case. I am going to call the best possible witness. I wish to refer to the Canadian-American committee, an organization with quite a few Liberals in it and the odd Conservative. I look at the list of names of the members and I am going to take the first one. I know that hon. members will want to look at some of the others. The first one is Robert M. Fowler, president of the Canadian pulp and paper association and one of the proud bastions of Liberalism. We were always wrong when we were in office. We were antiAmerican. There is quite a collection of names here. This is interesting. One of the members is Donald Gordon, chairman and president of the Canadian National Railways. He joined in the work of this committee.
I might as well give some of the other names: Harold S. Foley of Vancouver; Mr. Heffelfinger of Minnesota; Vernon Johnson of Montreal; David Kirk of the Canadian Federation of Agriculture, Ottawa; W. S. Kirkpatrick-there are some Conservatives here-of the Consolidated Mining and Smelting Company; Herbert Lank; M. W. Mackenzie, chairman of the board of the Canadian Chemical Company and always a devoted friend of the government of today; Norman MacKenzie of Vancouver; Jean

Marchand, president of the confederation of national trade unions, and so on. Here is Senator McCutcheon.


John Whitney Pickersgill: A great Liberal.


John George Diefenbaker: There had to be the odd Tory in the whole lot. I wanted to show the mix. What did these people say? Mr. Fowler is the first on the list of signers of the statement.
The Canadian budget of June 13, 1963, proposed a number of measures having adverse implications for United States private investment in Canada. Regardless of the reasons which impelled the Canadian government to take this step, its net effect will be to impose discriminatory tax treatment of foreign investors in Canada, thereby negating one of the fundamental principles of a free capital market.
They are still doing it. Troubled Canada. I wonder how often the Minister of Finance reads his theorizing of past days. Troubled Canada.
Although the proposal was substantially modified both administratively and substantively during the weeks following the presentation of the Canadian budget, the remaining provisions still clearly involve not only administrative complexities but also discriminatory tax handicaps for a broad range of Canadian industries.
Many of these men are supporters of the Minister of Finance and the Prime Minister. The Prime Minister cannot disavow this. He kept telling us "The Minister of Finance has got a plan. Just wait. We are not going to act spasmodically; we are going to act effectively. We have got a plan." What did the Canadian-American committee say?
In consequence, they-
The discriminatory handicaps.
-have already generated uncertainties with respect both to business conditions in Canada and to the outlook for the Canadian balance of payments- Indeed, even before the implementation of these two proposals-
The Canadian and the subsequent American one.
-they have had adverse consequences upon both economies through the confusions and uncertainties which they have generated. The damage already done and the further harm they will inflict if put into effect are of four kinds.
Then the statement sets out what will happen.
-they will tend to inhibit and to complicate the development of closer and freer trading relations between the two countries.
While the minister does this the Minister of Trade and Commerce is giving an interview the day before yesterday, as reported in La Presse of Montreal under the headline "Free Trade With the United States" with a question mark after it. "This is not Puerto Rico", he said. While the one interferes with our trade and expansion the other, who may be the practical one, talks of what is going to be done to bring about closer relations.
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The statement of the Canadian-American committee goes on to say, and I emphasize this:
-the tensions and uncertainties produced in financial relationships will undoubtedly spread-indeed, are already spreading-to other aspects of Canadian-American economic relations. A retreat from interdependence in one area will inevitably precipitate retreats in other areas.
Sir, can you imagine a stronger, a more incisive, a more definite criticism of the very things we are asked to pass? What remains in this bill are the remnants of a budget that has been chiselled down, altered and changed. Yet there are two items still in the bill that are part and parcel of what Bruce Hutchison has called the academic philosophy and economic quackery that have found a place in the budget.
I am not going back over the circumstances under which the budget was prepared. It was generated in suspicion of the civil servants. The three whiz kids were brought in, but even after all the examination that has taken place these dangerous items that were pointed out by the Canadian-American committee still remain in the bill.
A Canadian delegation went to Washington in September to seek some kind of new deal to balance our trade. When they returned it was said they had found that the United States showed no understanding of the Canadian problem. There has been a frightful degradation in our relations with the United States in a few months, all of it going back to the tinkering that went on in the preparation of the budget.
The Prime Minister spoke in Halifax on October 22 and said, to use his words, "There is a continuing dialogue going on between the United States and Canada". I am not going to argue about the fact that it is a dialogue in which the Americans tell us what we should do and as a result of which we, because of the theoretical bungling of these makers of the budget, entered into schemes that had never been weighed by economists or by civil servants. Dialogue. When they went down there a high official, speaking of the Canadian idea that was presented, said "Their ideas are screwy".
You will remember, Mr. Chairman, how a few short months ago all was going to be changed. There was going to be no more trouble. In a matter of six months Canada's position in relation to the United States and internationally has been degraded as never before; all because, according to Bruce Hutchison's definition, the theorists took over and the practical men were kept in the background. But these practical men are coming to the fore, Mr. Chairman. What is going to happen to the theorists? Rumour has it there

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are going to be some changes, some translations, some removals, some alterations, some revisions. It is too bad they did not take place before we had this legislation brought before us.
I said I might be dealing with some of the other clauses, and stated I would give a general outline of what we are being asked to do in passing this bill. The Minister of Finance has said that we have had a number of votes on this legislation. We do not expect to defeat the government on it. Even if it would completely destroy the economy of Canada some of my hon. friends sitting to my left would support the government on it.
You may take it, sir, that my hon. friends in the New Democratic party, who regularly utter those pious ejaculations that they alone keep parliament going, would possibly not vote on it; and when it comes to the party headed by the hon. member for Red Deer, his banner bears this strange device "Right or wrong; always right." The government has nothing to fear.
We have opposed these sections of the budget which are translated into the bill before us. We shall continue to do so, but we will not in any way hold up the legislation. We have tried to do that which business in every part of Canada has asked be done, business which just a few months ago was the best friend of the Liberal party, but we have not succeeded.
I have simply spoken to summarize the situation, and to point out that the provisions which will close the loopholes of evasion receive our support, but those that deal with the question of investment are ill adjusted, ill considered and dangerous to the economy of Canada.
We have had our say on this. The government will now go ahead, with the assistance of its allies, and pass the bill, but business has warned against it. People who ordinarily would not take a partisan attitude, such as those on the Canadian-American committee, have warned against it. We have warned against it; but now the government, in the discharge of its responsibilities, will put these measures into effect, and as a result the change from the theoretical and the academic to the practical will be once more intensified.


Walter Lockhart Gordon: Mr. Chairman, I had hoped we might get down to a discussion of the clauses of the bill one by one, and that we might even pass clause 1, but the Leader of the Opposition has chosen to repeat, with very little change, a speech that we have heard on several occasions in this house. It seemed to me he was replaying an old record that is getting cracked.

I must say I was surprised that, on this week of all weeks, he referred again to those of us who on occasion have expressed our views in books. He did not mention biographies, but I suppose a good many of us were thinking of a recent biography when he made that particular crack.
The Leader of the Opposition said little about the bill, and to me it appeared that he was just indulging in another of his political offerings. In the course of it an hon. member opposite sent me a verse which I think is appropriate, and with the permission of hon. members I would like to read it. It is very short.


John George Diefenbaker: The authorship?


John Whitney Pickersgill: You do not have to give the author. You take the responsibility for it.


John George Diefenbaker: No, the author. If the hon. gentleman produces a document he has to give the authorship.


Lester Bowles Pearson: Shakespeare.


Walter Lockhart Gordon: I think, as the Prime Minister has just said, this is a Shakespeare piece but I cannot vouch for it. If I am allowed to read it then perhaps some hon. gentleman opposite might know the author. I think it is appropriate in the context in which I read it; because as I have just said I was rather disappointed that the Leader of the Opposition should make another of his political speeches at this stage in the deliberations of the bill. This is the verse:
I went to him and "Sir," I said "I really beg your pardon,
But what is it you actually do With the mole-hills in your garden."
"I'm making mountains of 'em, child For lawyers and physicians For soldiers and committee-men Old maids and politicians."


John George Diefenbaker: You should have quoted "Man, small man, drest in a little brief authority."


Walter Lockhart Gordon: That is perhaps the small man's Shakespeare. I do not intend to speak for more than two or three minutes, but a lot has been said about the budget and the other economic measures the government has sought to introduce. I would like to remind hon. members-


John George Diefenbaker: If I might rise, Mr. Chairman, I have to go to a luncheon which the Governor General will attend, and I will take the hon. gentleman's speech as read.


Hédard-J. Robichaud: Small again.


John Whitney Pickersgill: It isn't necessary to be rude about it.

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Walter Lockhart Gordon: I hope the Leader of the Opposition has an excellent lunch, and I hope the Governor General has a nice time too. Now I want to get back to the budget and the other economic policies that the government has sought to introduce. I would remind hon. members that the Liberal party was elected on a progressive platform, and that this has been a great week for the government, the Liberal party, and for Canada.
I would remind hon. gentlemen opposite of some of the measures that have been brought to fruition within this last week. We were pleased and proud to be able to announce today that the municipal development and loan fund has now been approved by all the provinces, that it is now in operation, and that the money provided by parliament is now available to municipalities throughout the country to provide more jobs this winter.
I would remind the right hon. gentleman who is now having his lunch that we were delighted a week ago to be able to announce the automobile policy which some of us on this side have advocated for quite some time, and which we believe will not only be a move in the direction of correcting the very serious imbalance in our balance of payments but in addition, and of even more importance, will provide thousands of new jobs for the people of our country.
Some of the main budget proposals that are incorporated in Bill C-95 have been approved in principle by a large majority of the House of Commons. As I remember it, the vote was 126 to 78 on second reading.


Mr. Knowles:: There was no vote on second reading.


Walter Lockhart Gordon: Well, on the amendment. If I remember correctly, on second reading nobody voted against it.


Gordon Minto Churchill: It was "on division".


An hon. Member:: You were afraid to vote against it.


Gordon Minto Churchill: On a point of order, Mr. Chairman, the minister has made an error.


John Whitney Pickersgill: Nobody voted against it.


Gordon Minto Churchill: It was "on division", which indicated there was not unanimous consent.


Lester Bowles Pearson: Why didn't you call for a vote?


Walter Lockhart Gordon: Mr. Chairman, I did not mean to get into a childish wrangle as to who said what at what time. The fact is that the bill has been approved in principle.
I would remind hon. members of what this bill seeks to do. It seeks to plug some flagrant loopholes in the Income Tax Act. It provides
very important incentives designed to increase employment and production in those areas of the country that have suffered from slower growth. I did not find that there was much support for the hon. member for Digby-Annapolis-Kings when he suggested this provision did not apply to his part of the country. I think most people from the Atlantic provinces feel that industry should be encouraged to locate in those areas. Certainly I believe so.
Third, this bill provides for certain changes in the withholding taxes on interest and dividends that are designed to make it easier for Canadians to borrow in the United States at lower rates of interest than would otherwise be possible, and at the same time to encourage those with substantial investments in this country to take steps over a period of years that would gradually make it possible for Canadians to be included in their enterprises. These are policies that we on this side of the house are very pleased about, and I for one am proud to have brought in a budget which incorporates them.
Having said that, I hope we can get back to clause 1 of this bill.


Mr. Skoreyko:: I started to make my remarks last evening, Mr. Chairman, and I promised the minister then that I would only take a minute. I intend to pursue my argument later during the clause by clause study of the bill. I am very concerned with the section to which the Leader of the Opposition made reference a moment ago, clause 71 (a).
In recent days a matter has been brought to my attention, and I should like to place it before the minister. It is apparent that a group of businessmen have formed a company for the purpose of manufacturing boilers in Brantford. They were told by their advisers that they should immediately consult with the tax department to determine whether used machinery could be purchased for the production of these boilers, and if this were done whether the firm would qualify for this special assistance. They were told, sir, that 95 per cent of the equipment had to be new.
I know that the minister is closely connected with business. He is a business consultant.


Walter Lockhart Gordon: I rise on a question of privilege, Mr. Chairman. I should like to point out to the hon. member that I am not a business consultant; that I have no business connections. I severed all my connections when I took this post.


William Skoreyko: I apologize, Mr. Chairman. I only made that reference because I knew the minister had previous experience in the business world. I am just wondering if the

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minister would not reconsider this particular provision. In view of his experience in the business world he can appreciate the fact that many firms starting in business today must, to some extent at least, acquire used equipment. I hope that later on in the debate I shall be able to deal with this point in greater detail. At the moment I leave this for the minister's consideration.
The other problem with which I wish to deal concerns the selection of one spot in the province of Alberta as a designated area. I refer to the town of Blairmore. I appreciate the fact that the town of Blairmore has experienced many difficulties in the last few years, mainly because of a lack of markets for coal, but I suggest there are other areas in Alberta that might well be considered in the selection of these designated areas. I think my colleague the hon. member for Jasper-Edson made reference to the town of Hinton. This is a relatively new town in which some 3,000 or 4,000 people are employed. The only industry there is the pulp and paper industry. Should anything happen to the market for paper we would have a situation with which it would be hard to cope. I would ask, then, that the national employment service reexamine their initial submissions to the minister to see if some more of these cities- I do not want to mention any more by name-in the province of Alberta should be designated.


Mr. Kindt:: I just want to add a word or two about the slow growth area of the Crows-nest pass. It is not only the town of Blairmore which is within the area of the unemployment office located at Blairmore. In other words, this particular unemployment office looks after Pincher city-not Pincher Creek, but Pincher city-Cowley, Lundbreck, Bur-mis, Frank, Bellevue, Hillcrest, Blairmore, Coleman, Fernie and so on.


John Whitney Pickersgill: All aboard.


Mr.   Kindi@: Well, it is only fair that the
people out there be informed. If the government is not going to inform them then it is my duty to do so. I say to the Minister of Finance that so far he has failed in his duty. I am taking this opportunity, on the floor of this house, to bring this to the attention of the people out there. They have been writing me about it. I hope that what I have had to say will clarify the matter, in spite of the smiles and so on of the minister to your right.
I should like to comment on one other problem, and that is the stipulation that 95 per cent of the equipment of a factory must be new in order to qualify under this provision. The Minister of Finance knows that when an industry is started especially if it is a small

industry, it must rely on second hand equipment. As my hon. friend knows, there are many costs connected with setting up a new business. If these new industries which wish to locate in areas of slow growth must buy new equipment in order to qualify for these benefits under the act, many of them will be prohibited from locating in slow growth areas through lack of capital. I suggest to the minister that he take this particular provision under advisement and reconsider his position in respect of the amount of second hand equipment that is permissible for qualification.


Mr. McCulcheon:: Mr. Chairman, it is unlikely that I can add very much in a material way to this debate. I am not so naive as to think I can, since this is my first attempt at participating in the debates of this house. I should like, however, to comment on the magnitude of the estimates that have been brought forth by the Minister of Finance.
The figures stagger a layman such as I am. If my memory serves me correctly the minister said that the revised estimates were up $6 million over the original estimates, yet certain items had been erased or removed. We all realize that costs in general are going up, but are they going up this much? There is no question in my mind but that the present government have done some things. They have certainly increased our taxes; there is no question of that. Excise tax is up and income tax is up.
Going a little further, I should like to comment on the fact that over the past many years much discussion has taken place about federalism and whether or not it works. There was a period when some governments centralized while others did not. It turned out actually to be a tug of war between provincial and federal politics. Some federal governments centralized and others did not. I am led to believe from what I have read that the Liberal party was supposed to be by tradition a provincial rights party. However, recent actions by this party have proven correct the statement made by the hon. member for Northumberland about the need for more centralization in government; and, indeed, in her remarks in the debate on the address in reply to the speech from the throne another word was used to describe the situation. I refer to the word "collectivism".
Since then we have had issued, or seen issued, a tremendous proliferation of bureaucracy, with boards, departments, agencies, etc., which in my opinion has caused much unnecessary money to be spent. For example, we have the designated areas-some people

call them distressed, others call them depressed-and these areas were designated before the people in them knew what was going on; they had to read about it in the newspapers. We also have our new Department of Industry, and I wish it well. Our Canada pension plan is costing more money. Then we have the municipal development loan fund.


Julia Verlyn (Judy) LaMarsh: I wonder if the hon.
gentleman would permit a question. Could he advise the house in what way the Canada pension plan, a matter which to date has received only one day's debate on the resolution, is costing the country more money?


Malcolm Wallace McCutcheon: I will come to that in a moment or two, if the hon. lady would permit. I should like to refer to an editorial in the Financial Post for September 28, which states:
Why doesn't Ottawa give the taxpayer the unvarnished truth? Why not tell him that when the pension scheme is going full blast it will cost another $850 million a year on top of the $750 million now being collected to pay for our existing $65 a month?
Then it indicates that now the pension has been raised to $75 a month it will cost $865 million.
Up to now no one that I have heard in this house has offered any suggestion as to ways and means of cutting down costs. What has happened to the Glassco commission report? What has happened to its findings?


John Whitney Pickersgill: What has that to do with this bill?


Malcolm Wallace McCutcheon: May I 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.
Malcolm Wallace McCutcheon: When we broke off for lunch I had just commented on the fact that during my short stay as a member of this house no one, to the best of my recollection, has ever suggested that we should attempt to reduce our overhead expenditure. All our spending seems to be justified by a sociological approach; the idea seems to be that if we dump some money here it will have a magical effect on the economy somewhere else. This seems to me an artificial approach, and I should like to ask when this government will realize, as the business community has already realized, that it is impossible for anyone to spend himself rich.
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What has happened to the findings of the Glassco commission? Last November, a year ago, my right hon. friend from Prince Albert, who was then prime minister, said the government was prepared to adopt most of the suggestions made by the commission. He instructed the minister of trade at that time, who bears the same name as myself, to take charge of implementing the proposals. Things were being accomplished. The commission showed that it is possible to effect a reduction in the expenditures of this government of between $300 million and $450 million a year. An editorial writer has suggested this could mean a reduction in taxation amounting to as much as $440 million. Let us examine some of the savings which were proposed. The replacement of servicemen by civilians in non-combatant defence department jobs wherever possible was thought likely to save $20 million. Here is a recommendation which appeals to me; an improvement in methods of paper work and office procedure could save $50 million annually. What has happened? Nothing that I know of. I should like to read, in this connection, a paragraph which appeared in the London Free Press of September 9, 1963:
All sorts of reasons can be given why specific recommendations can't be carried out. But no alternative suggestions for cutting a way through the administrative jungle have been heard. And no real improvement in the federal government's financial position is possible without savings somewhere.
The Vancouver Province also had a comment to make on this situation in an article which appeared on September 17, 1963:
It now seems that Mr. Pearson's Liberals may allow these recommendations to gather dust in some government pigeonhole.
We hear figures running into millions of dollars bandied about freely in this house. They are so huge, so astronomical, that I cannot fathom exactly what they mean. So I must come down to my own level, the level of a common person dealing with hundreds or thousands of dollars. In my constituency, for example, we have a village where there is a post office in rented premises. The post office is in the town hall in this small community. I mention this point because it relates to what I have previously said about the proliferation of bureaucrats under this government. A few weeks ago the council of this municipality approached me and said "We are receiving a small rent from the Post Office Department for space in our town hall; just a few hundred dollars a year, but it helps us maintain the village hall in this community. But the federal government has sent some people here and they say we must have a new post office. We really do not want one and we should like

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to continue on this rental basis. It will save us some money as taxpayers, and the post office is adequate for our needs."
Well, we have a bureaucracy. There is no question about that. I wrote to the Postmaster General enclosing a copy of the minutes of the council meeting in this small place and pointing out their wishes to him. I received a very nice reply from the Postmaster General, and I should like to quote one paragraph from it to show what I mean about bureaucracy.
I should explain that in communities such as this it is the responsibility of the Department of Public Works to provide us with our accommodation. It is the prerogative of that department to decide whether the accommodation will be provided by leasing or by the construction of a crown owned building and we cannot direct the action which they take.
To me it seems strange that the Postmaster General himself cannot handle such a simple request, a request which concerns his own department, but has to succumb to the rigidity of bureaucracy and turn over the request to the Department of Public Works. Not only has this government increased the degree of bureaucracy in this country, but it seems to have made it more rigid as well, coming into conflict with the recommendations of the Glassco commission in the process.
I should like to close by reading a comment which appeared in the Amherst Daily News on September 18, 1963:
Mr. Walter Gordon used to warn us that unless the national budget soon moved toward balance, Canada would find itself "on the rocks".
Now, with Mr. Gordon our finance minister, hardly a day passes without a government promise of some new expenditure.
As far as I am concerned this newspaper quotation seems to sum up the situation perfectly. I have one more from the Edmonton Journal of September 19:
-it lies within the power of our own federal government to make two moves which would help to keep the economy moving strongly upward in 1964.
I mention the first one with my tongue in my cheek.
One is a change in the ministry of finance. The other is the introduction of economies in federal spending. The latter would give some real evidence of government determination to start reducing the deficit position.


Donald Stovel Macdonald: Mr. Chairman, I should like to raise a point of order. In view of the fact that the address we have just heard was the maiden speech of the hon. gentleman, on which I congratulate him, no one on this side raised a point of order with regard to the fact that he encompassed a very broad subject matter, much broader than he would have been permitted to do even on the resolution stage. However, I would hope that the more senior members of that group would
[Mr. McCutcheon.l
not consider this a licence to follow the same broadness of subject matter at this particular time. May I also say that some three hours and three speakers ago the Leader of the Opposition solemnly undertook that we would now proceed to a point by point consideration of the various clauses in the bill, and I would hope that particular promise could now be lived up to.


Gordon Minto Churchill: Mr. Chairman, I wonder what your ruling would be on this bogus point of order.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: If points of order are to be raised in the house they should have some basis in fact. There is no point of order here at all. It is simply one member's opinion with regard to the debate, and it deserves absolutely no attention.


Donald Stovel Macdonald: On the point of order, if there was no point of order, as the hon. member said, there was no basis for him rising and speaking.


The Chairman:: Order. May I suggest that we return to the bill.


Mr. Ricard:: Mr. Chairman, I still have a few remarks which I would like to make in connection with the municipal development and loan board.
The legislation seems to be filled with so many inaccuracies and defects that it is my duty to take a few minutes to point out some of these irregularities.
As you know, this measure of federal assistance to municipalities is intended to relieve unemployment. According to this legislation, $400 million will be divided among the various provinces in order to assist municipalities.


Mr. Benson:: On a point of order, may I raise the question as to what the municipal development and loan fund has to do with Bill No. C-95 which we are now discussing, and which comprises amendments to the Income Tax Act?


Gordon Minto Churchill: It was mentioned by the Minister of Finance.


J.-H.-Théogène Ricard: As my hon. friend has said, it has been mentioned by the Minister of Finance, and I see nothing but a disguised measure of closure in trying to prevent me from speaking on this matter.


Donald Stovel Macdonald: Shame.

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J.-H.-Théogène Ricard: However, I shall continue and put on the record the few remarks I wish to make with regard to the measure before us.


Donald Stovel Macdonald: Another broken promise of your leader.


J.-H.-Théogène Ricard: Of the government, yes.


Donald Stovel Macdonald: Of your leader.


J.-H.-Théogène Ricard: Mr. Chairman, if one looks at the way the bill was drafted, one can find several flaws. To give one example, the communities that need the least assistance, in proportion to the number of unemployed to be found there, will actually be the ones to get the most. For instance, if we consider the amount of help Ontario and Quebec can get, we see that Ontario will be able to obtain $160 million, while Quebec will only be granted a loan of about $115 million.
Statistics for the month of September show that Ontario had 72,000 unemployed, while there were 108,000 in the province of Quebec.
If you take the maritimes, with a total population of approximately two million, you find that this part of the country, which usually has the greatest number of unemployed, is the one that will get the least assistance from the federal government.
To give the house some further information, I might say that the maritime provinces will only be able to receive around $40 million. On the other hand, the prairie provinces, where there is hardly any unemployment, will be entitled to $70 million under this measure designed to curb unemployment.
Mr. Chairman, I will have to say it again, not for the pleasure of it but rather because it is my duty to do so. We are studying at present a piece of legislation which was prepared in a hurry and which does not take the needs of the people into consideration.
In order to illustrate what I mean I should like to refer to a recent newspaper report which gives the opinion of the Quebec minister of municipal affairs, Mr. Pierre Laporte, who said, as reported in La Presse of October 30 last:
X repeat that the provincial government still considers that agreement as an expedient.
Now, Mr. Chairman, you will agree with me that if the minister for municipal affairs of the province of Quebec feels that this measure is only an expedient, it means that the provinces expected much more from a government, from a Minister of Finance who had led us believe that, once in power, they would quickly solve all our problems and would eliminate unemployment by granting the municipalities and the provinces all the help they expected. But the facts must be
faced and they are not as reassuring as the Minister of Finance (Mr. Gordon) would like us to believe. And we are unfortunately obliged to point out again and again to the minister the defects in the act.
If the government had thought things over instead of acting with such haste, if they had really considered some fair legislation before presenting it to the provinces, they would have first prevented a general outcry on the part of four of them and then, they could have set criteria much fairer for the municipalities.
Without entirely discarding the demographic criterion, I think it should be replaced by the average number of unemployed people. Seasonal unemployment could be taken into account in order to apply suitable remedies.
Mr. Chairman, this legislation originally designed to alleviate unemployment only takes into account the location of unemployment in its enforcement, and if the minister actually wishes to serve the people in general, if he really wishes to help the municipalities and the provinces, he will act as he did before, he will withdraw this legislation and direct his officials to study all its features in order to offer to the house and the population a measure which will actually be free from the shortcomings and the flaws which we find in the legislation which we are being asked now to carry.
Mr. Chairman, I hope that the minister, if he is really prepared to discharge his responsibilities, will take into consideration the few remarks I just made and that he will review thoroughly this measure so that it serves the purpose for which he intended it at the outset.


Lucien Lamoureux: Shall clause 1 carry?


Thomas Clement (Tommy) Douglas: Before clause 1 carries I should like to say a few words. The measure before us has two main features, and I want to say only a few words about each of them.
The first feature has to do with giving certain tax concessions to those companies 25 per cent of whose shares are owned by Canadian residents. I was surprised to hear the hon. member for Digby-Annapolis-Kings describe this the other day as an anti-American measure. I have the feeling that the Conservative members have great difficulty in making up their minds as to what they think about the government's handling of Canada-United States relations. On Monday, Tuesday and Wednesday they accuse the government of being subservient to the United States by taking instructions from Washington, and on Thursday, Friday and Saturday the government is anti-American because

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it is endeavouring to do something about restoring some control of the Canadian economy to the Canadian people.
I think the House of Commons has to face seriously the fact today there is no country in the world which has so much of its economy owned and controlled outside ias own borders as Canada has. In the opinion of the New Democratic party the measure which the government is proposing is feeble, and we think it will be ineffective in really finding a solution. It is going to involve the investment of large amounts of Canadian capital to get control of 25 per cent of certain foreign concerns, which will really give Canadians no effective control and will use this capital to attain a purpose which in the long run will not achieve very much.
We feel the government will have to take much stronger measures if we are to make any progress toward acquiring a greater measure of control over the Canadian economy. If the government gets around to bringing down the Canadian development fund legislation and that is established, we hope it will use it or another fund for the purpose of acquiring some public investment in some of these foreign controlled concerns. This has now become common practice. In the Scandinavian countries, West Germany, France and Italy this has become one of the means by which government has been able to exercise an influence on large corporations, and this would be particularly beneficial in dealing with corporations that are foreign owned or foreign controlled. But as a step, a very feeble step which may prove ineffective, and as a gesture toward giving Canadians some measure of control over foreign controlled corporations, we will certainly support this measure.
The other measure has to do with giving tax incentives and concessions to corporations which are willing to go into underdeveloped areas. I cannot agree with the speaker who says a sociological solution to the problem of underdevelopment and unemployment does not make sense. In almost every country of the world which is experiencing economic growth and a high rate of employment this is exactly the kind of measure which they have introduced.
I had the privilege of visiting Sweden with some university people during the recess, among them two economists, and in Sweden one of the reasons they have been able to maintain a high rate of economic growth and keep unemployment to a minimum is that they have sought to direct investment into those areas which had surplus labour and surplus social capital investment which was not being used. This has worked out very well.

They argue, and I think they are right, that this cannot be done entirely by tax incentives. One of the things their labour market board is able to do is control the building of new industries. They have set up a national labour market board on which the government, industry and organized labour are represented, and they have labour market boards in 25 separate districts. The companies co-operate by supplying information to the labour market board every six months on any intended lay-offs, any increase in their labour staff, and what their general labour situation is likely to be, projected three years in advance.
Having that type of information the labour market board is able to direct industry. It does this by requiring an industry which wants to open a new plant to get a starting licence. Even to build a house or office building they require a starting licence, and when the labour market board decides that in a certain area labour is being utilized to the full and there is a shortage of housing and municipal facilities, it refuses to grant a starting licence in that area but will grant it in some other area.
They have set up special funds from which they make loans to corporations to move into undeveloped areas. A very good example of a community we visited was Norrkoping. This was an area which some ten years ago constituted the textile centre of Sweden, and when Japanese textiles began to flow into the Swedish market the textile industry of Sweden was threatened. There was the usual cry for protective tariffs, but after consulting with industry and labour the government decided it would impose no protective tariffs. Japan was a good customer of Sweden, and if Japan was prepared to buy Swedish goods the government decided it should allow Japan to ship its goods into Sweden so it could earn the necessary krona to buy Swedish goods.
This meant that several textile mills were closed. The labour market board moved into the area and converted one of the large mills into a technical training school which is still in operation. The board retrained thousands of workers. Those who did not want to be retrained were given financial assistance to move to other communities where jobs were available, but those who were retrained were employed in new industries which the government induced to come into the area, companies which now manufacture metal goods, radios and television sets, and the area has become one of the main metal work centres of Sweden. This was all due to tax incentives, low interest rate loans and the retraining program.
There is no doubt a great deal can be done by means of tax incentives and concessions to

persuade companies to go into underdeveloped areas where there is surplus labour. One of the most effective ways by which this has been done in Sweden is that the government allows a corporation to take up to 46 per cent of its profits and deposit them in the Bank of Sweden. They can be withdrawn at any time, but if the corporation withdraws them it pays income tax on them and also pays a surcharge. If it is prepared to leave this money on deposit in the Bank of Sweden, on which it gets a return, it may spend that money any time the department of finance and the labour market board decide that additional investment is needed. The government retains the right to determine when and where that money will be spent for plant expansion or for the erection of new plant facilities. In this way the government has been able to control investment and to direct investment into areas which otherwise would be completely bypassed.
One of the things we have to recognize is that there is another reason for directing investment into underdeveloped areas. When a corporation goes into a crowded area and puts up a factory, workers have to be moved there, houses have to be built, schools, hospitals and other municipal facilities have to be constructed, and in many cases this means five to ten times as much social capital has to be invested to equate with the private capital which has been invested, whereas it may be that only a few miles away is another centre with surplus housing, surplus labour, and adequate community facilities. Therefore the idea of trying to attract industry by various forms of incentives and concessions makes a great deal of sense.
However, I hope the minister and his colleagues will take another look at the method which the government is proposing to use for attracting industry into underdeveloped areas. The formula which is being used as a criterion for determining designated areas is a mathematical monstrosity. I will not go into all the criticisms of it, but it seems to me it completely fails to assess what is the kind of area that requires this assistance. If one looks at the list of designated areas it is rather significant that with the exception of Blairmore, Alberta, there is not a single designated area west of the great lakes.
Now, does this mean that we are not going to direct investment into the prairies and British Columbia? Certainly the potential is there. We are facing a technological revolution in agriculture. Thousands of young men and women are being forced off the farms as the farms become larger and farm machinery is more extensively used. These
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young people would normally gravitate to the towns and cities in western Canada to become part of industry.
However, under this method of designating areas these communities are completely overlooked. It seems to me that to use as a criterion unemployment from May to October over an eight year period is to overlook completely the age of the people in the community; how many young people are going out to seek jobs over the period of the next few years; the social capital invested in that area; the number of young people in the surrounding countryside who will in all probability move into an industrial area to live. It is a great mistake to leave these matters out of consideration.
I think this is probably one of the difficulties in having one department setting the criterion and another department evaluating and giving the tax concessions. I am sure that with a few months experience the Department of Finance will very quickly discover that this formula is not satisfactory at all. I am not quarreling about the places that are named as designated areas. I think most of them are areas that need immediate consideration. However, I hope the government will apply some more flexible formula for giving tax concessions to companies moving into areas that require industrial development or have employment problems.
I want to say that so far as we are concerned we are supporting this legislation. We support the legislation with reference to foreign control of our industries. We think it is weak, we think it may prove ineffective, but we welcome the fact that the government is at least moving in this direction. We think the experience will give the government the necessary courage to invoke much stronger measures.
With reference to the legislation to encourage corporations to go into underdeveloped areas, we welcome this legislation. We only hope the government will try to produce some more flexible formula so that it will have a wider and more general application.


David Réal Caouette: Mr. Chairman, I should like to make a few comments on Bill C-95, which contains a total of 30 pages and does not seem to be too well understood by most hon. members, no matter on which side of the house they sit. The bill is full of intricacies and ambiguities. In fact, I think that this is the most intricate bill hon. members have seen in a long time.
Anyhow, since the beginning of the discussion on this bill, we have heard suggestions and we understand that its purpose is to grant tax exemptions to certain new

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industries which would set up in so-called underdeveloped or depressed areas.
Now, I represent a region which was designated as a depressed area about three weeks ago. The main industry in that region is the mining industry and even if the Minister of Finance (Mr. Gordon) or the government would urge new industries to set up in our region, I think that first, they should think for instance, about changing our climate and the distance between us and the large centres such as Montreal, Quebec, Three Rivers and Valleyfield.
In fact, the management of Noranda mine, one of the largest companies in our region, have set up a zinc refinery in Valleyfield, precisely because the towns of Rouyn and Noranda were too far from the large communities. So, this legislation will surely not prompt new industries to set up in our region.
However, there is another way to hasten the solution of the problem facing us in northwestern Quebec, and it is to increase the price of gold. That would probably create some 30 new mining industries in the district, and it would enrich the federal treasury. In addition, it would help fight unemployment, which is fairly high in our area, and it would contribute to the economic development of the district. Then, the government could boast of having introduced legislation to help a depressed area.
Mr. Chairman, one of the clauses of this bill provides that the government will make tax concessions where there is relocation of secondary industries.
Now, just a few weeks ago, a bill was introduced in the house to amend the personal income tax. How does the government conciliate moves like that?
On the one hand, it gives tax incentives to industry and, on the other hand, it increases the personal income tax to reduce the purchasing power of individuals.
It seems that nothing worth while is being done, that no positive solution is being offered, no solutions likely to solve this problem which is becoming more and more acute and serious.
The problem will not be solved only by introducing measures that are more or less senseless. At this very time, some small Canadian industries are on the brink of bankruptcy. We are not helping small industries; there is no provision in this bill to give them assistance. Why not help those that are already in operation? It seems to me that this would be a more logical solution than the one now being suggested.
[Mr. Caouette.l
Mr. Chairman, while on the subject of personal income tax, I shall refer to a notice of assessment forwarded to me by one of my constituents.
I refer to notice of assessment No. 0839136, in the name of Mr. Jean Guy Trepanier, 187 Saguenay St., Noranda, P.Q. As indicated at the bottom of the notice of assessment, here is the decision of an income tax official:
The deduction claimed for charitable donations has been reduced from $511 to $200.
This income tax official admits having in hand the receipts for charitable donations and arbitrarily decides to reduce the amount from $511 to $200. This is in connection with personal income tax.
Mr. Chairman, in the newspaper-


Mr. Habel:: Could the hon. member for Villeneuve tell us what was the net tax amount owing?


David Réal Caouette: In reply to my excellent friend from Cochrane, the federal tax amounted to $349.


Joseph-Alphonse-Anaclet Habel: No, I mean what was the net
amount of taxable income?


David Réal Caouette: The net taxable income is not mentioned on the assessment notice.


Joseph-Alphonse-Anaclet Habel: It could throw light on the situation.


David Réal Caouette: No, it could not throw light on the situation. I will answer the hon. member for Cochrane by saying that it could not change the deduction, because the deduction claimed for charitable donations accompanied by receipts has been reduced from $511 to $200. One thing is certain, however, it was not larger than 10 per cent; it was scarcely 7 per cent. That, I know.
We suggest to the Minister of Finance and to the Minister of National Revenue to free the Canadian citizens from the petty annoyances which stem from arbitrary decisions of federal officials, and to generalize that measure in order to increase the buying power of the Canadian consumer. If this buying power were increased, the Canadian industry would be promoted and would make great strides, while today it finds itself paralysed, because its stockrooms are overfilled and it cannot sell its production as it would normally.
That is indeed the crux of the matter. We are not confronted with a need for greater production, but with a problem of distribution of existing production.
Inventories, annual production, excess production, we have all that. No Canadian alive today has to worry about finding clothes, houses or what have you. But all, without exception, wonder how they can buy these

things. Our industry, as well as our taxpayers, are faced with possible bankruptcy.
Canadians today are in debt and mortgaged for years to come. Business too is saddled with mortgages and loans for years to come. The government tells us:
Companies which will settle in depressed areas will benefit from tax exemption.
Mr. Chairman, in La Presse of October 26, 1963-which is very recent-I find an item regarding Reverend Father Emile Fournier, bursar of the religious order of St. Vincent de Paul, who was lecturing at St. Foy, P.Q. I quote:
Reverend Father Emile Fournier, bursar of the Brazil missions for the St. Vincent de Paul order, stated, last evening, that capitalism, not communism, and ideological conflicts, is the worst danger for Latin America.
Yet, nobody thought of calling Father Fournier a communist. And I quote further:
Speaking before the members of the Richelieu club, Reverend Father Fournier said that more particularly in Brazil, where he himself lived several years, the whole population is literally starving, beside a handful of wealthy families. The people are exploited by capitalism.
"Nine people out of ten are living in extreme poverty, and are kept in that condition by a group of extremely wealthy individuals who only make up 3 per cent of the whole population."
The reverend father stressed that the annual average income of people in Brazil was $250.
The lecturer also said that Brazilians are Christian in principle. But that education in the faith is poor because of a lack of priests.
The time has come for French Canadians to assume their responsibilities and to help a country, the history, language and culture of which are very close to theirs, concluded the speaker.
Mr. Chairman, we have in Canada today an increasing number of unemployed people who live in the most abject poverty. Of course, here, in parliament, we perhaps do not see that poverty, but when we go home, in our constituencies, we discover that undeserved poverty existing amid abundance.
It is said that there is no want of means of production. It is true. But what is even truer is the fact that the means of consumption are inadequate, that there is a shortage of buying power in the hands of consumers.
It is to this problem that the Social Credit offers a solution. There are those, especially in parliament, who smile when they hear about Social Credit. But the Canadian population smiles less and less, for it realizes that Social Credit brings a solution that can definitely settle the problem. It is the only means by which all those problems could be tackled, here, in this house, but the solution is being refused.
Let us launch an effort, let us reform industry, let us exempt some from taxes and increase taxation on others, let us try and reform the institutions, let us try everything.
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But let us not interfere with the monetary question, the matter of the necessary money and credit, let us not try to balance the Canadian economy according to the tremendous physical capacity at our disposal.
When we say it is time to make financially possible what is physically feasible in Canada, we are perfectly right. The Liberals and the Conservatives, one after the other, did effect this "financially possible" in face of the "physically feasible" during the war years. No one was told in Canada that we were short of the necessary credit to make guns and shells. The minister of finance in the years 1941-1942, the hon. Mr. Ilsley, used the Bank of Canada at the time to create new credit in the country in order to make armaments and put Canada on a war footing.
Well, today, we of the Social Credit think that the time has come for the Minister of Finance to order the Bank of Canada to create the credit necessary to put Canada on a peace footing, on a basis of security, with personal freedom guaranteed to all Canadians living in the country and building it up.


Mr. Valade:: Would the hon. member for Villeneuve allow me a question, Mr. Chairman?


David Réal Caouette: Yes, certainly.


Georges-J. Valade: When the hon. member for Villeneuve mentioned the Social Credit philosophy, was he speaking of the philosophy advocated by Gilberte Cote-Mercier and her group, or was he putting forward a new philosophy.


David Réal Caouette: Mr. Chairman, in answer to my hon. friend from St. Mary, I shall say that in the world, there is only one Bible, but there may be 800 denominations. But all of them are related to the same Bible. The Social Credit philosophy we advocate is the authentic philosophy of Major Douglas. No matter whether Mrs. Cote-Mercier or Mr. Even wear white berets, if they advocate the same philosophy as Major Douglas, we quite agree on that philosophy.


Mr. McIntosh:: Before clause 1 carries I should just like to ask the minister a question concerning the write-off of a $5,000 automobile. This does not appear to be relevant under any other clause, so I will ask it at this time; I do not intend to make a speech. I understand from what has been said previously that a company can write off an automobile costing less than $5,000, say $4,999. What happens if the automobile costs $5,001? Can a company then write off $4,999 and pay tax on the other $2, or do they pay the full tax on the $5,001?

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Another question concerns the automobile which may cost $4,999 in eastern Canada but which will certainly cost more than $5,000 in western Canada, owing to freight rates and so on. This regulation seems to me discrimination between eastern and western Canada, or western companies as compared with eastern companies. I should also like to impress on the minister that there are other factors which should be considered in this $5,000 write-off.
I do not disagree with the principle behind the regulation, if it is a regulation. I know what the minister is trying to do. He is trying to stop companies from buying Cadillacs, and so on, and I agree with that. But there are problems which arise from this unless we receive some explanation. For example, in the province I come from there is a provincial education or sales tax of 5 per cent. In the province west of where I come from there is no sales or education tax. So the matter does become a problem.


Mr. Soulham:: Or to the east.


John (Jack) McIntosh: Yes, to the east, or it could be other places. So there are a few problems in regard to this write-off on automobiles, and I should like the Minister of National Revenue or the Minister of Finance to explain to the committee a matter which concerns some of these companies.


Mr. Garland:: Perhaps if I told the hon. gentleman that the regulations have been published and have been available for some time he would be satisfied. The specific answer to his first question is, of course, no. The other matters he has referred to are taken care of in the regulations, which are available on request.


John (Jack) McIntosh: I wonder if the minister will give us some details. I went home about a week ago, and this matter was of concern to many automobile dealers out there. Apparently they had written to the Department of Finance and were promised an answer within a very few days, but they had not received one. I do not know when the regulations came out, but I should like a statement on record in this house so I can go back to the dealers and say that this is what the minister said.


Walter Lockhart Gordon: Well, Mr. Chairman, if I can amplify what the Minister of National Revenue said, the $5,000 ceiling was decided on so that it would include as eligible for write-offs practically any car manufactured in Canada; in fact almost all of them. The whole amount can be written off. If a car cost more than $5,000 it would probably be an imported car and nothing could be written

off. The purpose was to encourage people to buy cars made here and to discontinue a practice under which the treasury has been financing approximately 50 per cent of all these high priced cars.
In answer to the second question, the regulations have been published and they make it quite clear that there is no discrimination in favour of people who live closest to Oakville, Oshawa, or other points in Canada where motor cars are produced. In calculating the cost for this purpose, freight charges and provincial sales taxes are excluded from the computation.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On clause 4.
Marcel Joseph Aimé Lambert: Mr. Chairman, there is one point on this clause which has always bothered me and I should like to ask the minister for a short explanation. I have always wondered what would happen in these cases if the option has been exercised. I realize that what the minister is trying to get at is a colourable transaction whereby there is in actual fact a lease, and that has been the intention of the parties. But they have covered it in the guise of a lease option, though they have never exercised the option. In other words, no overt step has been taken to exercise the ownership and acquisition of the assets. I realize this was a loophole. But what happened when there was such a transaction on the face of it, and when subsequently the option was exercised indicating that it was a bona fide transaction? I do not like to see everybody classified as a wolf because they happen to be covered with sheep's clothing: They may truly be sheep.


Walter Lockhart Gordon: There may be taxpayers who acquired property before 1963 taxation year under the lease option arrangement and who had property established for tax purposes under the rules contained in section 18. Where the capital cost has been established in this manner it will not be disturbed by the repeal of section 18. The taxpayer concerned may continue to deduct capital cost allowances as if the section had not been repealed.


Marcel Joseph Aimé Lambert: Does not the minister think that with this provision he has now closed the door on an important area of business operation. The hon. gentleman has had some connection with business and he must realize the value of lease options. I am thinking not so much of their value from the point of view of taxation relief, but of their financial value. Does he not think we have here, for the sake

of administrative convenience, closed off an important method of business development?


Walter Lockhart Gordon: I do not think the hon. gentleman need worry about that. It is still perfectly open to businessmen to rent or lease a property and to write off the amount of the rental paid.


Marcel Joseph Aimé Lambert: That may be so, but I am speaking of an option for a businessman to buy a property-that is, a lease option. I do not care how you want to describe it, but a rental agreement with a right to purchase is a lease option.


Walter Lockhart Gordon: The only thing which stopped that practice before was section 18, which we are now recommending should be repealed. There is nothing to stop people doing what the hon. member has suggested.


[Stage Direction]
Clause agreed to.
Clause 5 agreed to.
On clause 6.
Marcel Joseph Aimé Lambert: On clause 6, I think there were some questions asked by the hon. member for St. Lawrence-St. George who had something very pertinent to say in this regard during the resolution stage. I would refer the minister to pages 2494 and 2495 of Hansard where he will find some questions which, so far, he has left unanswered. With all due respect to the minister, I think his hon. friend did raise some very relevant matters to which the committee should have an answer before it can agree to go further.
I can see what the minister is trying to do. He is dealing with a straight marrying of a loss position company with one which is in a favourable position, or one with some excess profits, in an attempt to average out. I hold no brief for tax evasion. On the other hand, I hold no brief for the man who unwittingly makes himself subject to income tax. A man who is astute enough-and I do not use this adjective in a derogatory sense-to develop his business without exposing himself to taxation, is surely not to be blamed for so acting, especially when one considers that the income tax legislation contains a multitude of provisions which are contrary to the principles which govern ordinary conduct. Why should such a perfectly laudable objective be caught up in a wide sweep such as the minister is trying to make at the present time? I am sure that to business consultants, chartered accountants and lawyers primarily concerned with business the matters raised by the hon. member for St. Lawrence-St. George are very important considerations. We must be careful not to sweep out economic development purely on the grounds of administrative convenience.
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Walter Lockhart Gordon: With the greatest respect, I do not think my hon. friend from St. Lawrence-St. George asked any questions about this clause. Perhaps we could ask him. There
he is.


Mr. Turner:: As one who has been drawn unwittingly into this debate, let me say that at the resolution stage the two matters in which I was interested were, first of all, the question of surplus strips. I may have had something to say about the retroactive nature of the provisions affecting surplus strips. Second, I may also have touched on the problem of ministerial discretion. If the hon. member is speaking of my comments on those subjects, I suppose he is referring to my speech with accuracy.


Marcel Joseph Aimé Lambert: I think the hon. member's remarks were related to the loss position.


Walter Lockhart Gordon: Very well, let me say a word about the loss position. The purpose of this clause is to prevent a company with a loss-carry-forward entitlement from changing hands, thus permitting a new owner to introduce into that business an entirely different business after the date of the budget, and having this entitlement applied against the profits of the new business enterprise. That is all. It is not intended to have any retroactive effects. It is not intended to apply if there is no change in ownership, and I believe there is no ground for the fear which has been expressed by the hon. member with regard to this clause.


Marcel Joseph Aimé Lambert: Except to the extent that if there is an entitlement of carry forward a loss position and there is subsequently a situation created whereby the loss position is wiped out, surely there is an element of retroactivity.


Walter Lockhart Gordon: The hon. member is correct.
This will wipe out the loss credit position if there has been a change in ownership. The reason, of course, is obvious. People with profitable businesses who were paying taxes on their profits were making a practice of acquiring companies, often shells which had nothing in them but which were in possession of a loss-carry-forward entitlement, for the purpose of applying this entitlement against their profits and thus avoiding the payment of tax. That is what this clause is intended to prevent. I am prepared to admit that in theory, certainly, if you look upon the corporation which has the entitlement as being a separate entity, it does lose its rights, where its ownership has been transferred to somebody else. However, that is the very thing we are trying to stop.

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Marcel Joseph Aimé Lambert: One case does occur to me where a good deal of hardship could result. I am thinking of two companies which are engaged in a related activity or business. One is in a loss position and the other is carrying on a profitable operation. The company which has the profitable operation is a substantial creditor of the business which is not so successful. In order to minimize its losses, the successful corporation buys out the business which is not successful, and is in the loss position. It is in a case such as this that the successful business would be prejudiced, because there is no distinction in the amend-nent on the basis of related businesses.
I will agree with the minister that there is some justification if a contracting company suddenly decides it is going to buy out a realty company or some such other extraneous operation solely to even out profits, but surely a legitimate case can be made for those within the same type of business. In the first place, it may be a substantial creditor of a debtor company. We have seen many businesses grow as a result of these mergers. If the minister wants names I can name him some very successful growth businesses that were built up because the one participant that had active, intelligent management and appropriate financing picked up a number of ancillary companies which were its debtors. In a very few years these were built up into very successful businesses. If the proposed provision had been in force such would not have been possible. May I say that these companies have contributed to economic development in certain sectors that are very well known to the minister's officials, though perhaps not to the minister.


Walter Lockhart Gordon: Mr. Chairman, I do not know the particular example about which the hon. member is talking, but I should like to try to put the matter this way, in more general terms. If one individual or one group controls two companies, one of which is making losses and the other is making profits, they are in a position that they can concentrate their activities on the company they now own which is making losses, and transfer the profitable business to it. They will not come under this section because control of the loss business will not have changed hands, so they can do this.
But if you are talking about two companies that are not related and one is profitable and the other is not profitable, what we are trying to stop, as I was saying, is the company which is making profits buying the losses of the other company and thus avoiding the payment of taxes on the profitable business, which they have been doing in the past. That

is what we are trying to stop and, of course, we think it should be stopped.


Marcel Joseph Aimé Lambert: I think the minister is using a yard wide broom to collect a foot of dust.


[Stage Direction]
Clause agreed to.
On clause 7.
Marcel Joseph Aimé Lambert: Mr. Chairman, would the minister give me an explanation as to the point I raised on second reading, why this has not been incorporated in the act as a permanent change? We have been carrying it forward from year to year, much to my mystification.


Walter Lockhart Gordon: I think the hon. member has a good point and if he will bear with me I will try to fix it up in the next budget.


[Stage Direction]
Clause agreed to.
Clause 8 agreed to.
On clause 9-"Taxable corporation" defined.
Mr. Lamberl:: This point is somewhat more limited than the general objection I have raised with respect to the so-called Cana-dianization

I cannot call it national distinction-of a taxpayer. Why is it that here we are now getting the little toe in the door, in that there is a suggestion that if the shares of a corporation are listed on a Canadian exchange the corporation is now deemed to be a taxable corporation within section 38? Not too much has been said by the minister in this regard. I would appreciate it if he could tell us why there is this provision that the mere listing of shares on a Canadian exchange shall be deemed to be a partial fulfilment of the requirement of residency, one to which, incidentally, I do not necessarily adhere.


Walter Lockhart Gordon: Of course you have to do more than just list the shares. A very substantial part of the business has to be in Canada. This is a relieving amendment. As the sidenote indicates, a taxable corporation is defined and the definition is broadened so that it will include the kind of company described in paragraph (b), and to provide that the dividends from this kind of company shall be deemed to be from a source in Canada. There are companies which, for one reason or another, do not qualify but which do all their business in Canada and in which it is desirable to encourage Canadians to invest. They do not invest in these companies to a large extent because they cannot get the 20 per cent dividend tax credit unless the company is a Canadian corporation. The companies described in paragraph (b) are companies which, although not resident in Canada in the sense that their head offices

are not here-the Hudson's Bay Company is a good example-carry on substantially all their business in this country and have their shares listed on the Canadian stock exchange. It is desirable that Canadians should increase their share ownership in this kind of company, and the purpose of the amendment is to remove the tax deterrent to the acquisition of such shares by Canadians. That is the purpose of it.


Marcel Joseph Aimé Lambert: In this connection I am wondering why the arbitrary figure of 85 per cent has been selected. If I recall correctly from my business experience, the provision in the United States tax law is 75 per cent.
If I recall exactly, this permitted them to incorporate companies in the Dutch West Indies which were rather large operations. I may say this is one of the tax havens found throughout the world, and if the United States can take advantage of it I do not know why Canada cannot similarly take advantage of it, where operations could be conducted on scores of millions of dollars a year, with headquarters in the Dutch West Indies, provided that 75 per cent of the revenue comes from abroad. In such a case a company could operate in the United States and could operate in Canada, with the bulk of its operations in Canada, yet it got the benefit of both worlds, Canada and the United States, with about 2 per cent income tax payable in the Dutch West Indies. Why was this 85 per cent selected?


Walter Lockhart Gordon: I am sure the hon. member would not like us to become the Dutch West Indies of the northern hemisphere. There is no significance to the 85 per cent. It would be quite satisfactory to me to make it 90 per cent. The only reason I did not make it 100 per cent is because companies of that kind presumably have had offices and may have a little business going on somewhere else, but the purpose was to indicate that substantially the whole of their business should be in Canada, if they were to qualify in this way. I would not like to make it less than 85 per cent, but I would have no objection to making it more than that.


Marcel Joseph Aimé Lambert: This is an amending provision and the minister uses the word "substantially", but he comes down to 85 per cent. As the one making the change, the burden is on him to establish why there should be this level of 85 per cent as against, say, 75 per cent. What are the compelling reasons to make it 85 per cent?


Walter Lockhart Gordon: Just that 85 per cent is more substantial than 75 per cent. I cannot do
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better than that. I would prefer it to be higher.


[Stage Direction]
Clause agreed to.
On clause 10.
Marcel Joseph Aimé Lambert: Would the minister give us an explanation why he is repealing this section? I agree it was experimental in its inception, but it was the burden of a good part of my speech on the resolution stage. This was an incentive based on sales, and I would put it to hon. members that in so far as business is concerned the success or lack of success of any business is ultimately on sales.


Walter Lockhart Gordon: Profits.


Marcel Joseph Aimé Lambert: Well, sales and profits. You are not going to have profits if you do not have sales, and the selling philosophy after all is the ultimate factor. The minister is well enough versed in politics to know that unless he can sell the philosophies of his own political party he might as well stay at home. There are other points I might indicate where, unless you are able to sell, you might as well not start your operation.
There is no point in developing factories and commercial establishments to produce goods if you are not going to sell them, and of course we anticipate selling them to cover something more than their cost. Again I ask, why was this abandoned?


Walter Lockhart Gordon: This is being abandoned because this particular concession has been strongly criticized on various grounds. I will mention four of them.


Marcel Joseph Aimé Lambert: The burden is on the minister.


Walter Lockhart Gordon: Yes, the burden is on the minister, and I do not mind this particular burden because I remember a year ago criticizing this particular form of incentive very strongly. These are now criticisms that have been received, quite apart from my own efforts in that regard.
First of all, since dollar sales were the measure upon which the concession was calculated, the emphasis was upon sales volume rather than upon efficiency. Thus taxpayers had an incentive to increase prices or to achieve increased sales in uneconomic ways in order to earn some forgiveness of tax. There was a certain amount said during the last few days about the price of sugar, and if this section remains, then because the sugar companies will be increasing the dollar value of their sales-


Marcel Joseph Aimé Lambert: Abroad?


Walter Lockhart Gordon: No, in Canada-it has nothing to do with exports-they would get a tax

Income Tax Act
incentive, which seems to me to be quite out of order. This surely is not the intention, to give these people a tax incentive because they raise prices.
Second, this provided an incentive for taxpayers to arrange to have high sales in one period, if they could, and low sales in another, or otherwise manipulate their sales.
Third, it was so complicated in the way it had to be worked out that many taxpayers said it was not worth their trouble to try and qualify.
Fourth, the value of the incentive was very low. For example, the illustration used in the 1962 income tax bill showed a company with sales of $1 million, which increased its sales by 10 per cent, and it would receive a tax concession of $1,230. But the main criticism is that this concession, being based on the dollar value of sales, would give a bonus to companies who increased prices for one reason or another, and which, if you like, made windfall profits because of the devaluation of the dollar; and I cannot believe it was intended to give people a bonus for that sort of thing. Actually the incentive was proposed in the April, 1962 budget, at a time when devaluation was not contemplated.


Marcel Joseph Aimé Lambert: It may be that the minister has set up the bogies, but regardless of that I would put it to him that the ultimate test of competitiveness is in your sales price. It is true that in certain limited competition industries, such as the sugar industry, there may be possibilities of windfall profits; but even using the dollar value as the criterion, if they are going into the export market with the devalued dollar, surely to goodness because the devaluation provided an additional incentive for income and increased sales of a dollar value for exports, why should that be a criterion to throw out section 40A. This was cited by the minister as one of the reasons, but on the basis of short experience I would have thought he would have been prepared to give this incentive at least one or two more years trial.
This is shutting the door on one of various means of expanding the Canadian economy. This is in complete antithesis to those things which the minister has been preaching to us. The parliamentary secretary whispers to me that it was just no good.


Edgar John Benson: That is right.


Marcel Joseph Aimé Lambert: On what basis? On what period is he able to judge? He has not had the experience with respect to operations based on tax reports. I would have thought it would have been better, and I would have been prepared to accept the minister's evaluation of all this, if he had said that on three

years' experience this incentive was not deemed to be a successful method. There is no one method that is going to be the cure-all. I am sure the minister will agree with that.
Here was a method which no one claimed to be an absolute cure-all. Perhaps it was limited, but why kill it? I suggest this action is premature, and that there was insufficient evidence that this was not a proper method by which we could encourage economic growth. In other words the minister is subscribing to the philosophy that unless you have a 100 per cent painkiller, then you had better get it off the market. Even if only 25 per cent of business could take advantage of the incentive, why kill it?


Horace Andrew (Bud) Olson: The minister has answered the question I intended to raise on this clause; but the hon. member for Edmonton West is now suggesting it is a little too early to kill it. Therefore I would like to quote a short piece from some communications I have received respecting this particular clause, so that it may add some evidence to the reason for the repealing of the section;
Section 40A was enacted in 1962. It was intended to give a tax incentive where a manufacturing and processing corporation had increased its sales above a level determined in accordance with another complicated formula.
Section 40A has been-


Marcel Joseph Aimé Lambert: On a point of order, Mr. Chairman, the hon. member is quoting from a document. Would he please identify it and, if need be, would he table it so that we may know he is not picking something out of the air?


Horace Andrew (Bud) Olson: I take full responsibility for this quotation from a communication that was sent to me.


Marcel Joseph Aimé Lambert: By whom?


Horace Andrew (Bud) Olson: Whether I choose to table or give the rest of it to the house should be my privilege.


Marcel Joseph Aimé Lambert: Oh, no.


Horace Andrew (Bud) Olson: May I go on?


John Whitney Pickersgill: If the hon. member takes full responsibility.


Horace Andrew (Bud) Olson: It says:
Section 40A has been a dismal failure. All that section 40A ever did was encourage corporations to raise prices.
A corporation could qualify for the tax benefit merely by raising the level of its sales by an increase in prices.
It goes on to say:
Here was a built-in inflationary device.

So I suggest there is quite a lot of evidence available to indicate that this section could be repealed.


[Stage Direction]
Clause agreed to.
Clauses 11 to 14 inclusive agreed to.
On clause 15-Special tax rate.
Marcel Joseph Aimé Lambert: This is related to the withholding tax, and with all due respect to the minister I have some difficulty in reconciling his replies with some of the questions I put to him the other day. He indicated yesterday that the question of abrogation of article XI of the tax convention between Canada and the United States depends upon the imposition of a tax. The question which I raised the other day was to the effect, had he had the assurance of the officers of the treasury, and had he had the assurance of the authorities in the United States government that they would not deem this to be a de facto abrogation as of now, and not wait until the imposition of the tax after January 1, 1965, as envisaged by the minister?
This is the point that is of primary concern. I think the minister will recognize that there are a number of business interests in this country, and it has been suggested to me from my reading that although it may appear strange, the investment per capita by Canadians in business in the United States may be at about the same level as the per capita investment by United States interests in Canadian industry. If this were to be a de facto abrogation within article XI of the taxation convention, then immediately the United States government could boost its rate of withholding tax to 30 per cent, that is a 30 per cent withholding tax on dividends payable to Canadian parent companies by United States subsidiaries, wherein the majority of the income earned by the Canadian parent is from the United States subsidiary.
Of course, we all realize just how quick the reaction to this provision would be the establishment of so-called Delaware corporations. This would mean that what has been a two-way street would become entirely a one-way street, and any investments Canadians might have in the United States would become a mere fragment of what they are now. It must be recognized that there are a number of Canadian corporations, and we hope there will be more, that are extending their operations into what is potentially a good market for Canadian expansion.
I should like to have this assurance from the minister. It is not sufficient to say that when the tax is imposed we will know the reaction. We would like to know if we have 28902-5-274
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an assurance from the United States authorities that the passage into law of this bill will not be deemed to be the imposition of a tax. With all due respect to the minister, the fact that the tax would become operative as of January 1, 1965, may be interpreted, under the terms of this legislation, as the imposition of a tax on dividends as of January 1, 1965.


Walter Lockhart Gordon: I think perhaps the hon. member is talking on clause 23 of the bill and not clause 15, but perhaps I might answer the point he has raised now while it is clear in our minds. I do not want to be asked to mention individuals in the reply I am about to make.


Marcel Joseph Aimé Lambert: I have no thought of individuals.


Walter Lockhart Gordon: We have had some preliminary conversations and discussions with the appropriate officials in Washington on this point. One of the more senior officials suggested to me, within recent weeks, that before we got down to a discussion of this problem it would be best to wait until the bill was passed. He said, after all, this particular thing does not some into effect until 1965, so we have lots of time to discuss it.


Horace Andrew (Bud) Olson: This clause appears to me to be another example of what might be called piecemeal legislation. If I understand it, all it does is raise from 15 per cent to 20 per cent the tax on most non-resident owned investment corporations. I should like to ask the minister if he has given any consideration to introducing some legislation to provide a different plan for attracting foreign capital on a permanent basis? In other words, will he induce foreign capital to come to Canada and become Canadian capital?


Walter Lockhart Gordon: All I can say is that this amendment provides that there be no withholding tax at all on certain investments in Canadian bonds, which is the way in which most of the capital comes to Canada. These non-resident owned investment corporations are a special kind of company which is defined in section 70 of the act. They are used by non-residents to hold portfolios of investments in Canada. The rates of tax on these companies must be increased in conformity with the non-residents withholding tax; otherwise the non-resident companies could use this special type of company to hold their shares in subsidiaries in Canada and thus arrange to have their dividends from these subsidiaries taxed at the 15 per cent rate. It is needed, if we are going to have the change in the withholding tax that is recommended in the later section. This particular

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provision is needed to make the thing consistent.


Marcel Joseph Aimé Lambert: In commenting on the minister's reply of a few minutes ago I may say, and this applies to this and other sections of the act, that I am very concerned that the action of this legislative body in passing a law shall not be deemed to be an irrevocable act. The minister himself realizes that we do not pass amendments to acts, or we do not pass bills, so that later we can merely repeal or amend them.


Walter Lockhart Gordon: I hope not.


Marcel Joseph Aimé Lambert: We can say-


Walter Lockhart Gordon: Except in 40A; I must say I thought that was a good thing to yank back.


Marcel Joseph Aimé Lambert: It seems we are on extremely thin ice in accepting an unofficial assurance the minister might have received, that there is plenty of time to think about this within the terms of the tax convention, the possible abrogation of the treaty and the automatic imposition of a 30 per cent level of withholding tax by the United States authorities. Once the Canadian parliament enact a law, this is not merely an expression of opinion. It is an overt act on the part of the Canadian government. This is where I think the minister's argument is just a little thin.
I know the minister has given warning about other matters, for instance in the field of business expenses, as did his predecessor. There are other fields in which the Minister of Finance has given a warning without introducing any legislation. Really, this and all the other related provisions to which I am referring are warnings. Suppose the minister's negotiations are not as fruitful as he expects? What is he going to do? Is he going to come back next year and say: I was not quite as successful as I hoped, would you please amend the act? This is not good enough to maintain the confidence of the business community.
This is the reason I asked the minister if he can give us that assurance, that the passage of this legislation will not be deemed by United States authorities to be the imposition of a new level of taxation as of the coming into effect of this amendment to the Income Tax Act? It is not too much to ask. I think we are entitled, as is the business community of this country, to know just what is going to happen. After all, there is certainly enough uncertainty.


Walter Lockhart Gordon: Well, there is a lot of uncertainty, particularly about the changes that were made in the December 1960 budget. After hon. members requests, the withholding taxes were changed in that budget and this left a good many of the tax agreements up in the air.


Marcel Joseph Aimé Lambert: But they were renegotiated.


Walter Lockhart Gordon: They were not renegotiated with the greatest respect. They still have to be renegotiated. Notice has to be given prior to June 30 in any year, and then they have to be renegotiated. Despite the fact that these changes took place-


Marcel Joseph Aimé Lambert: There was no complaint.


Walter Lockhart Gordon: No, there was no complaint because the increased tax has not been collected. It cannot be collected under the agreements about which I am talking, and there are seven or eight of them. In this case we intend to collect these taxes now. The hon. member suggests it would be better merely to give a warning that we intend to do something in the future. I think the way to give a real warning is to put it in the act; then people are likely to take some steps, and to take this more seriously than they would if they were just exhorted to do it.
I want to be quite clear. I am not in a position to give a categorical assurance as to what the United States administration will do when we get down to negotiating this particular matter, because I have not gone into it in that detail. They have suggested that these negotiations be deferred until the bill is passed, so I am not in a position to give that assurance. However, I would remind the hon. gentleman that, as we all know, there is a difference between the total amount of United States investments in this country and the amount of Canadian investment in the United States. United States investment very greatly exceeds Canadian, and these people will be reasonable and keep that in mind when we renegotiate the matter.


Marcel Joseph Aimé Lambert: The minister agrees, of
course, that the sums per capita are not that far apart compared with the global amount, taking into account the difference between a population of 200 million and one of 19 million.


Walter Lockhart Gordon: With respect I suggest that that is a completely irrelevant point. I thought the hon. gentleman was asking me whether I could give him a specific assurance as to what the United States administration was going to do about this tax treaty, and my answer is that I cannot do so.


[Stage Direction]
Clause agreed to.
On clause 16-Exemption of income from manufacturing or processing business in designated areas.
Mr. Alkenbrack:: Mr. Chairman, I have listened with interest to the various stages of the bill, particularly to the clause by clause discussion. I would say that the Minister of Finance has been rather wildly shuffling the

financial cards of the country and has taken a very dangerous method to try and deal Canada a better hand at this time. I am strongly of the opinion that the chances are that the hand will not be a better hand.
Clause 16, which deals with the exemption of income from manufacturing or processing business in designated areas, is not, as it exists, good legislation. The dangers of the clause have been ably pointed out to us by the hon. member for Wellington South. I submit, Mr. Chairman, that it is discriminatory. The industries which can take advantage of the designated areas will get a free ride on the financial income tax bandwagon whereas the industries in a non-designated area or in close proximity to a designated area will have to pay more income tax than ever. There is no doubt about that, because the Minister of Finance will have to demand from the country as a whole vast amounts of money for the next fiscal year. Therefore I submit that industry in non-designated areas will have to pay more income tax in order to give these new industries moving into designated areas the advantage that the Minister of Finance has promised them in clause 16.
Second, the clause is contradictory in that it contravenes municipal autonomy. Third, the measuring stick in the criterion is unfair; it is certainly autocratic and there is no doubt it is impracticable. We should be using, I submit, a 12 month period to measure the extent of employment in a given municipality which may now become a designated area merely by virtue of a six month period of unemployment in the summer or the winter. The barometer is not ample enough.
Fourth, it is certainly an affront to provincial and municipal autonomies. There are four levels of government in this country, and two of the most important levels are the minor municipality and the major municipality; that is, the township, village or town, and the county. They should certainly have the right to apply and should be the first to know whether these measures should be taken within their boundaries. In fact, I have had in my riding some suggestions from some quarters to the effect that our area be considered to have a lower degree of industrial and commercial activity compared with others, and I did suggest to the people who brought the subject up that we had not asked for any such measures. We have learned in the past, especially in southern Ontario, that we are self-supporting and that our efforts in that regard should be taken into consideration.
Fifth, this clause is not satisfactory to the great majority of industry. That goes without saying because we know the righteous howls 28902-5-2741
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of protest which are coming from established industry in the environs of municipalities which have been designated.
For that reason, Mr. Chairman, I move, seconded by the hon. member for Okanagan Boundary:
That section 71A (1) (b) be amended by adding:
"except that the provisions of this section shall apply only where the municipality in which such taxpayer carries on business has requested the benefit hereof, and that municipalities receiving such benefits must not be closer to each other than 100 miles".


Edgar John Benson: Mr. Chairman, this amendment changes the basic concept of designated areas as defined in this particular clause of the bill. It does not refer to the bill as such.


Mr. Aiken:: Mr. Chairman, on a point of order, is the parliamentary secretary speaking to the amendment or to the validity of the amendment?


Edgar John Benson: I am speaking to the amendment. The concept of designated areas, Mr. Chairman, as defined in this particular clause of the bill was worked out very carefully in consultation between the Department of Industry and the Department of Labour. It was put into the bill on the basis that areas which were lesser developed or which needed economic incentives would be granted these economic incentives on a logical and proper basis, bearing in mind the employment statistics over a period of years, and without any possibility of the sort of patronage which might develop if one were going to have varying criteria and municipalities coming to the federal government with their hat in their hand, as they did under the surplus manpower areas legislation of the previous government.
I have heard a great deal of talk over the past several days about this particular part of the bill being discriminatory. It certainly is discriminatory and is intended to be. The intention of this part of the legislation is to encourage industry to move into areas in Canada which need economic development.
We have heard members opposite saying, for the past few days, that it is unfair for the federal government to choose particular areas for designation when they were within a short distance of other areas with a better record of growth. They say it is unfair because it would attract industries from those other areas. The proposal is criticized because, it is said, it in some way over-rides municipal autonomy. I believe the bill as presented to the house is written in such a way that people across the whole of Canada are fairly treated. The areas designated are chosen on a legitimate basis as a result of the consistent application of facts set out by the Department of Labour. No area can claim it has been

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unfairly treated or that different criteria have been used in one place as distinct from another.
I believe that if the federal government had waited to consult with all the municipal governments on this matter, and with all the municipal councils, as I have heard it suggested should be done, we would never have had such legislation as this passed in Canada. This measure is designed to encourage industry to move into areas which need them, and it is my belief that members should not support an amendment which would, in effect, force the municipalities to come cap in hand to the federal government and ask for help.


Mr. Winkler:: After listening to the parliamentary secretary, I think he and his minister should re-examine exactly what they are doing. He has said, in effect, that the whole measure is meant to be discriminative. He told us it would be better to withhold the entire measure than to consult the provinces and the municipalities. I think he was placing the emphasis on the municipalities.
In the years prior to coming to Ottawa as a representative, I had the pleasure of working with business people in my own home town in Ontario. Anyone who has had a similar experience will know very well that provincial legislation prevents municipalities from competing for industry. Municipalities are not able to offer certain attractions such as tax relief; nor are they under provincial law allowed to use these as inducements. However, here we find the federal government offering such incentives-incentives which, as I have said, the municipalities themselves are not allowed, by law, to offer in my own fair province. Is this not extremely discriminatory?
I do not know whether the amendment now proposed will serve the precise purpose which it is intended to serve. Possibly it has been put forward because of the situation at Brantford. This is the reason I have chosen to take part in this discussion. I do so because this situation is mentioned in an article which I intend to place on record. It has been stated in the house on a couple of occasions that on the very day on which it was publicly announced that Brantford was to be declared a depressed area, industry in that city was advertising in cities less than 30 miles away for skilled, semi-skilled and unskilled labour. Does that not make the decision with regard to Brantford ridiculous? There is much more in this than meets the eye. I have endeavoured to impress on the government the odd methods they are pursuing with regard to their practice of patronage. This is evident in other pieces of legislation, too. Since this
[Mr. Benson.l
measure was instituted they have possibly thought twice about it, and declared the odd other area as depressed for the purposes of the bill. But to designate one area, so closely located to another, as being depressed while doing nothing about its neighbours is an unfair thing to do, whether the reasons are economic or political.
Today, there is no industry which would not like to have some tax concession to enable it to expand or to become more competitive so as to do better in either the home market or the export market. But this government has seen fit to restrict this expansion in various ways. Were it not for the restriction on debate I should be glad to go into this aspect at greater length. However, all this has another connotation for the riding of Grey-Bruce, a constituency which for long supported the thinking of the party opposite. I should like the hon. gentleman, and the Prime Minister, who is now sitting near him, to pay particular attention to this. I am reading from an article which appeared in the Hanover Post on October 17, 1963:
As parliament reopens, there are other financial problems beside pensions arising to plague the Pearson government. When the government announced plans for aiding depressed areas by making tax concessions to new industries establishing plants there, the proposal went through without much discussion.
The paper is, of course, referring to the first stage of discussion.
But implementation of the proposal has brought practical difficulties. One of the areas labelled as depressed is the city of Brantford, Ont., and Brantford has obtained a new industry which had almost decided to locate its plant in Guelph, about 30 miles away, the principal factor in the final decision being the tax advantages offered because Brantford has been labelled a depressed area.
Guelph and other municipalities in the general area are rightly annoyed, but when representatives of seven municipalities in the general area went to Ottawa to remonstrate with the government, they received no satisfaction.
I suppose that in this respect the situation is as described by the parliamentary secretary. The government could not listen to every municipality in the country before making its decision. Nor, apparently, could it listen to the provinces.
C. M. Drury, Minister of Industry, told the delegation that the decision about making Brantford a depressed area had not been made hurriedly and he would not promise to remove that city from the list of those areas qualified for special treatment.
The delegation had asked that nearby cities be given the same consideration (tax decision?) as Brantford if the government would not alter Brantford's status. This seems to be a reasonable proposal, but it did not impress Mr. Drury. Industrial centres in the same general area as Brantford, such as Guelph, Galt, Kitchener and Waterloo, are subject to the same influences industrially,

and there seems to be a lack of equity in the dominion government's favouring one of them at the expense of the others.
Now listen to this:
Brantford has a Liberal as its member of parliament while the other centres mentioned are represented by Conservatives.
That is the part I want the government to listen to, because I shall have something more to say about it at a later date. The article ends: "Looks like the Grey Prison Farm decision."


David Réal Caouette: I am grateful for the courtesy the official opposition have extended to us in not sending us a copy of the amendment. We cannot study it. We do not know exactly what they mean and we would appreciate having a copy so that we could see exactly what it contains.


Louis-Joseph Pigeon: Mr. Chairman, the statement of the hon. member for Grey-Bruce (Mr. Winkler) is correct and applies just as well to the province of Quebec.
In my opinion, this clause is discriminatory to our country since it establishes a distinction between certain areas. The minister should move an amendment to change the clause.
Besides, this section infringes upon provincial autonomy. It is just like putting shackles on certain municipalities. The government should propose an amendment to change the entire clause in order to treat all areas of the country equitably and to stop such discrimination.
I believe the government should mend its ways. Moreover, I am not the only one to make observations along this line, since members on this side of the house generally agree with me on the attitude of the government regarding this particular clause. It has not been adequately thought out, it is contrary to the spirit of provincial autonomy, contrary to common sense, since it is discriminatory.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Chairman, I merely want to raise a point of order or a point of privilege. I am not sure which. We are being asked to vote on an amendment we have not seen. I have not got a clue as to what it is. I wonder whether it would be possible for us to be given a copy of the amendment.


Lucien Lamoureux: The Chair will read the amendment again for the benefit of the hon. member who does not have a copy. Mr. Alkenbrack moved:
(( That section 71A (1) (b) be amended by adding: "except that the provisions of this section shall
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apply only where the municipality in which such taxpayer carries on business has requested the benefit thereof, and that municipalities receiving such benefits must not be closer to each other than 100 miles."


Raymond Langlois: We have been told that there is a little bit of discrimination on the part of the government but certainly the setting of this arbitrary distance of 100 miles is also a form of discrimination. In some areas industrial centres are more than 100 miles apart but in other regions they are closer than that. Actually the amendment is imposing a restriction of 100 miles, which is also a form of discrimination. What is the logic in setting the distance at 100 miles? If it is necessary to make it 50 miles for some municipalities we should make it 50 miles. Why set a distance of 100 miles between each municipality that may ask for this assistance? In my view this is also a form of discrimination.


David Vaughan Pugh: Mr. Chairman, I should like to bring to the attention of hon. members the speech made the other day by the hon. member for Oxford which has to do directly with this question of the distance of 100 miles. He said that rather than using a more or less bureaucratic statistical method to establish designated areas it would be much better to look at the matter from the point of view of a metropolitan area. He pointed out that Toronto is a large area extending for some 24 to 30 miles, I believe he said. There is no question that this legislation might well apply to certain portions of Toronto. He compared the situation there with the city of Brantford which has been named as a designated area. The city of Brantford is one of a number of cities in an area of roughly 24 miles. Why pick it out on a statistical basis? Why should all the other towns in the immediate area of Brantford not be named also?
I think his point was very well taken that under the present method the economic set-up is interefered with. As he suggested, within this area of 24 miles there is no question that the chambers of commerce and the town councils have gone out for business. Their efforts in this regard are upset by this form of discrimination when you simply say to them: We will name you on a statistical basis in a bureaucratic manner; we will not even consult you; we will simply name you. This method discriminates against all the other cities which are within a very few miles of the designated city. They are an economic unit and there is no question that they should be treated as a whole.
Offhand I would say that certain areas within Toronto might well want to apply. There are areas which for one reason or

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another feel that they are not getting the benefits that other portions of Toronto are. This might seem to be logical, but if you look at the matter closely you will see it is not logical at all but crazy to suggest, for instance, that one portion of Toronto should be named. It is a metropolitan area. Various municipalities joined together as a metropolitan area because of the benefits and advantages with regard to labour, industry, employment and so on.
The same reasoning should be applied to cities which are contiguous and form part of an economic unit. It has been pointed out, and it is quite reasonable, that today labour has a good deal of mobility. In other words, you might reside in the city of Brantford and work close by in one of six or seven other cities. I think that the amendment providing for the distance of 100 miles is completely within reason and for these reasons I support the amendment.


Gordon Harvey Aiken: Mr. Chairman, several questions have been asked about this particular clause. The objection which the amendment has been designed to eliminate is the designation of areas as depressed or distressed, or areas of future opportunity or whatever you may call them, where the municipalities and areas themselves do not ask for it. We recall that when the former government brought in somewhat similar but certainly not as drastic legislation there were great cries from the opposition of that day about designating distressed areas and calling them distressed or depressed. Some municipalities might have such a degree of pride that they would wish to try to get along by themselves rather than be branded distressed areas. Under the present situation the government is almost saying to an area: You are looking rather seedy so here is a little money to help you out.
I know that this is the basic objection to the legislation and this is what the amendment has been designed to cover. The municipality itself must say that it feels the advantages of the legislation will outweigh any disadvantages that might come about by the municipality being branded a distressed area. There is always the possibility that such a designation might have the opposite effect to that which is intended. Undoubtedly the intention is to give some assistance to the area which has been designated but the effect might be the reverse if businesses which might otherwise go there would not go because of the designation. They might feel it was not the kind of community in which their employees might like to reside. Communities certainly have to consider these matters.

As far as the distance of 100 miles is concerned, I am not sure whether I would want to go that far. I know that the hon. member for Wellington South, who has been so interested in this matter, would have been quite agreeable to setting the distance at 100 miles, and I believe it was his idea. This would eliminate the possibility of an industry moving from one area to another as happened in the change from Guelph to Brantford.
I do think the municipalities should be consulted in a situation like this. They should be given the opportunity to decide whether or not they want to be designated. In supporting the amendment we believe they should have the opportunity so to decide by resolution. If they decide that the benefits will outweigh the disadvantages, then the legislation should become effective. While I have some doubts about the distance of 100 miles, I certainly support the principle of the amendment.


Lucien Lamoureux: Is the committee ready for the question?


Some hon. Members:: Question.


John (Jack) McIntosh: Mr. Chairman, on page 14 of the bill there is a marginal note reading "business in a designated area". Subclause 3 reads:
For the purpose of this section, a person shall be deemed not to have been carrying on a business in a designated area in a fiscal period unless-
Then there are a whole lot of qualifications.


An hon. Member:: It will not be long, just five minutes.


John (Jack) McIntosh: Do you want to take up the five minutes? When speaking on this bill on another occasion the hon. member for Edmonton East pointed out that it seemed that under the bill someone starting up a new business had to have machinery which was 95 per cent new. That is the understanding that some of us have on this side because the minister did not deny it. The amendment to section 71A (1) (b) adds these words:
"except that the provisions of this section shall apply only where the municipality in which such taxpayer carries on business has requested the benefit thereof, and that municipalities receiving such benefits must not be closer to each other than 100 miles."
That is the understanding some of us on this side of the house have because the minister did not deny that fact. I would say that the capital cost allowance for new depreciable property seems to be a further protection for big business, and there seems to be a discrimination here between those with a good line of credit and those with a limited

line of credit. In other words, there is a further imposition on small business, and particularly on the small manufacturer who wishes to purchase a less expensive type of furniture or possibly used machinery.
From experience I can say that a small businessman who starts up with limited capital and limited credit cannot afford to go out and buy new machinery, and every year when his income tax return goes through it seems that if he has made any profit the income tax people take his bank account and leave him with his accounts receivable and inventories.
When I talk about manufacturing I am thinking of cases in the smaller settlements of western Canada, where possibly a manufacturer may wish to start up a soft drink factory and the potential for customers is not too great. He may know some other company in a larger centre which is going to enlarge its plant, necessitating the purchase of new machinery, and he buys the machinery it is replacing.
As I said before it seems to me that this is discrimination, to put this stipulation in the bill. Seeing that the minister did not answer the hon. member for Edmonton East-


Donald Stovel Macdonald: Would the hon. member permit a question?


John (Jack) McIntosh: Certainly.


Donald Stovel Macdonald: If the hon. member-and this could apply equally to all hon. members on the opposite side-has any confidence in the amendment, maybe we can vote on it now, and put an end to their filibuster of their own amendment.


Mr, Pigeon:: We don't have to receive orders from you.


John (Jack) McIntosh: I wonder if the hon. member who has just spoken would elaborate a little bit on his remark?


Donald Stovel Macdonald: The best answer is for us to vote on it, Mr. Chairman.


Some hon. Members:: Question.


David Vaughan Pugh: I have a few questions to ask yet.


John (Jack) McIntosh: Well, Mr. Chairman, I think I can safely say all hon. members of the house are in favour of the amendment, or the other amendment qualified by the hon. member for Grey-Bruce.


John Napier Turner: May I ask the hon. member a question?


John (Jack) McIntosh: Certainly.
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John Napier Turner: The hon. member referred to the hon. member for Grey-Bruce whose complaint, as I understand it, was that if we were going to treat one municipality in a certain way we should treat them all in the same way. How about this subamendment putting the prohibitive distance of 100 miles between areas? How can it achieve that result?


John (Jack) McIntosh: I do not think he had anything to do with the subamendment, except that he spoke on it. But it does seem very odd to us, as the hon. member for Grey-Bruce pointed out, that in this one particular locality where there is a Liberal sitting member it should be a designated area for assistance under the income tax bill.


John Whitney Pickersgill: Does that apply to Blair-more, Alberta?


John (Jack) McIntosh: And I understand an area with a Liberal minister, also. These are things which the people of Canada want the government to answer. If our accusations and insinuations are wrong I am quite sure some people on that side of the house will get up and give all the other areas around Brantford an explanation or an answer to the question put by the hon. member for Grey-Bruce.


John Whitney Pickersgill: Would the hon. gentleman permit me to say a word at this time?


John (Jack) McIntosh: Certainly.


John Whitney Pickersgill: Since there is such an obvious desire to co-operate and get this bill through today, I was wondering if there would be general agreement to have the committee sit for the next hour and complete the bill?


John George Diefenbaker: No.


John (Jack) McIntosh: Mr. Chairman, I have been in the house since 1958 and I understand there are rules and regulations by which we are guided and which we are expected to follow. Since the hon. member for Bonavista-Twil-lingate has become house leader I think, if one went back on the record since the session started, he would find there have been more requests from that one member to change the rules and regulations than there were in the preceding five to ten years. May I call it five o'clock.
Clause stands.
Progress reported.


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

Criminal Code CRIMINAL CODE



AMENDMENT TO PROVIDE FOR PROVINCIAL LOTTERIES

Georges-J. Valade: the second reading of Bill No. C-36, to amend the Criminal Code (provincial lotteries).

He said: Mr. Speaker, it is probably the umpteenth time that I rise to speak in this house to try and convince the government that it should welcome the request it has received several times in the course of many years to amend the Criminal Code in order to authorize provincial or national sweepstakes.
During the debate on the Income Tax Act, when one of my colleagues raised a certain point, the hon. member for Rosedale (Mr. Macdonald) asked that the question be put to a vote. He was accusing opposition members of engaging in a filibuster because they were expressing their views on the value of the proposed amendments to the Income Tax Act.
Mr. Speaker, I hope the hon. member will keep his colleagues from engaging in a filibuster in regard to the bill I am introducing and also that he will ask them to allow the question to be put to the vote. I suggest also that he asks his colleagues not to drag on their remarks so that by the vote, people will be informed of this viewpoint on that matter.
Bill C-36 seems to be agreeable to all the population, or at least to the majority of the people of the province of Quebec.
Its provisions differ somewhat from those of similar legislation introduced in the house these last four or five years, since its main purpose is to amend section 179 of the Criminal Code by adding an exception to the qualifications pertaining to the setting up of lotteries.
In short, the bill aims at adding an exception which would read roughly:
That the Criminal Code authorize provinces that so wish to proceed to the establishment or setting up of provincial lottery systems, to help hospitals, social security systems or other organizations whose purpose is to improve the well-being of Canadians.
If this bill is passed, and I hope it will be, it will satisfy the needs of the people.
Objections are being raised across Canada, especially in some areas of some provinces, sometimes for quite justified reasons, but often for highly questionable reasons; but citizens nevertheless oppose the plan for a national lottery to be set up by the government. And that is what prompted me to introduce a bill drafted in such a way as to

respect mentality, denomination, in some cases, even the chauvinism of some people about lotteries.
I am also of the opinion that if that bill was agreed upon, it would help to a large extent, in the province of Quebec, to solve the fiscal problems which now face Mr. Lesage and his government.
And if the government makes no move to block the bill through useless discussions, I think we may one day speak of the Pearson plan. However, if the government consciously kills the bill, we will refer to the three P's: Pearson, plan and patronage.
Consequently, I feel it would be better-


Joseph-Alphonse-Anaclet Habel: Are you speaking of patronage?


Georges-J. Valade: Mr. Speaker, if the hon. member for Cochrane (Mr. Habel) wishes to ask me questions about patronage today, I am in a better position to answer him now than I was last week. For the time being, I would rather deal with the subject under discussion and ignore the nonsensical remarks of the hon. member for Cochrane. I will come back to them later if he wishes me to do so.
Mr. Speaker, I could speak at length on this bill. I could give you its history or expound a philosophical study or thesis on the morality of such a legislation.
I could also give you statistical data to establish a comparison between Canada and the 70 countries that have already enacted similar legislation.
Of course, I could quote a number of documents to support my point and to show the advantages of a lottery such as the one which is proposed in this bill. But I think that would be a waste of time.
During the past several years, we have heard in this house the views of members from all parts of the country, from coast to coast.
In this session, after the movement had been launched by the Conservatives when they were in office in 1958, we have stirred up interest for this bill. I notice that on the order paper, for example, we have several similar bills, one in which the wording is different, that is Bill C-21, introduced by my colleague the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon). We have also Bill C-24, introduced by the hon. member for Acadia (Mr. Horner), and then Bill C-44, under the name of the Creditist member for Beauce (Mr. Perron). As for the last one, even though I am greatly pleased to see it on the order paper, I find it is a plagiary, complete with periods and commas, of the bill that I am introducing today.
In the past, members who had gone through the election mill have appealed here on behalf of a lottery. The former member for

Calgary South, Mr. Arthur Smith, a Conservative, the Liberal member, Mr. Merv. Hardie, and the member for Vancouver-Kingsway (Mr. J. F. Browne), introduced bills of their own. I mention their names as a token of esteem for the work they did in that field and also to remind the house that members from all parts of Canada appealed in favour of lotteries.
Which goes to prove that the majority is in favour of lotteries. Not only members of parliament but public bodies are interested. For instance, the 800 chambers of commerce of Canada are in favour of the project. At a recent congress of mayors and municipalities held in Ontario, the federal government was asked to set up a lottery. Recently, we had the opportunity of seeing how interested the public is. I should like here to express in particular, the admiration I have for Mrs. English, of Calgary, who has set upon herself to get one million signatures in Canada in favour of sweepstakes. She worked a great deal for that cause travelling all over the country. I wish to pay a special tribute to her. There is also the survey conducted a few years ago by the paper La Presse which revealed unequivocally that 89 per cent of the people in the province of Quebec were in favour of a lottery.
I do not understand why the government should ask some members to extend the debate until six o'clock so as to kill the bill, when it should recognize that this bill is logical and acceptable. In fact, it merely suggests an amendment to the Criminal Code in order to enable the provinces wishing to do so to pass legislation allowing them to establish a lottery.
We respect the convictions and conscientious objections of certain persons from different areas of this country.
The statutes of the province of Quebec contain since 1935 an act concerning the establishment of a provincial lottery. In 1949, Mr. Duplessis called for the establishment of a provincial lottery at a convention held in Chicoutimi. At that time, Mr. Jean Lesage, the present premier of the province of Quebec, was a member of the federal cabinet and he had declined to proceed with the request made to him by Mr. Duplessis.
Well, today, the situation has changed. It is now Mr. Lesage who is asking the ministers in Ottawa to establish a provincial lottery. Recently, some federal ministers and the Minister of Justice (Mr. Chevrier) in particular stated that one must be Liberal in Quebec as well as in Ottawa. If that is true, I wonder why the Liberals of Ottawa turn down the request of the Quebec Liberals.
I hope that the hon. member for Dollard (Mr. Rouleau) who will speak later will tell 28902-5-275
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us whether he intends to act upon Mr. Lesage's request to amend the Criminal Code.


Mr. Boulanger:: Would the hon. member allow me a question?


Georges-J. Valade: Certainly.


Prosper Boulanger: You said that Mr. Lesage has submitted an official request. Could you be more explicit?


Georges-J. Valade: It is a fact that Mr. Lesage made a request a few years ago. He wrote, I believe, to the Minister of Justice to that effect asking him to consider a bill authorizing a provincial lottery. At that time, a federal-provincial conference was to be held and during that conference, the project was to be discussed. There was no federal conference and when Mr. Lesage came to Ottawa in September last, he did not mention it, but all the same he had advocated such a bill at political meetings even if he did not mention it on that occasion as he had promised.
I understand that Mr. Lesage is playing politics with this matter while we, Conservatives, would like to pass legislation. We are certainly not playing politics since we are advocating this legislation.


Prosper Boulanger: Mr. Speaker, I rise on a point of order. I asked a question and the hon. member did his best to answer, but he is far from being clear and precise. He has just admitted there was no official demand made to the government.


Georges-J. Valade: It is not a reason to rise on a point of order. Should the hon. member wish to ask me a question, I shall answer him by recalling the promise that his colleague, the hon. member for Dollard, made during the last electoral campaign, on the occasion of a political rally in northern Quebec.


Prosper Boulanger: This is not an answer.


Georges-J. Valade: The hon. member for Dollard said that should the Liberal party be elected, we would have provincial lotteries.
I am very happy to see the Minister of Public Works (Mr. Deschatelets) applaud, for he himself, when he was occupying the opposition benches, demanded lotteries. I am anxious to see whether he shall induce his friends not to kill the bill. We shall then know whether the minister applauds simply to make noise or if he really desires a lottery such as we request.
Hon. J. P. Deschatelets (Minister of Public
Works): May I ask a question?
Would the hon. member for St. Mary be able to explain why, from 1957 to 1963,

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when his government enjoyed a record majority in the House of Commons, it did not follow through with that resolution?


Georges-J. Valade: It gives me pleasure to answer that question. First of all, we did not have an overwhelming majority at that time but rather from 1958 to 1962. We had then inherited from the Liberals the unemployment problem and we did not have time to deal with lotteries. But since, the Conservative members settled down to work. Besides, if the minister will refer to the order paper, he will note the complete lack of such bills in the name of hon. members of the then opposition. It is easy to say that we did nothing during these four years, but the Liberals were in office 22 years and there was never any mention of lotteries on their part.
When Mr. Lesage was a member of the federal cabinet, while Mr. Duplessis was premier of the province of Quebec, there was a request to amend the Criminal Code in order to allow lotteries to be held. The Liberals, who were then in office, refused. I recall at this point the promises made by the Liberals during the last electoral campaign. The hon. member for Dollard had reached a point where he had nothing to lose in making so bold as to promise that, once in office, a Liberal government would grant lotteries to the province of Quebec.


Mr. Guy Rouleau (Dollard):: Mr. Speaker, I would like to direct a question to the hon. member for St. Mary.


Georges-J. Valade: If the hon. member for Dollard would let me recite what he promised, he could ask me a question when I am through. I think it would be advisable for him to follow that course.


Guy Rouleau: My question is related to the one asked by the hon. member for Mercier. Is the hon. member for St. Mary aware that when his party was in office, the premier of Quebec, Mr. Lesage, asked that the holding of provincial lotteries be permitted? Could the hon. member tell the house when the premier of Quebec made a similar request to the present government?


Louis-Joseph Pigeon: During the last electoral campaign, at the time of the famous 12 month ultimatum.


Georges-J. Valade: Mr. Speaker, I am ready to answer that question. I remember the numerous ultimatums delivered by Mr. Lesage who, during the election campaign, even said he would deliver an ultimatum to the federal government if the latter did not, within 12 months after its coming into office, amend the Criminal Code so as to legalize lotteries. The hon. member for Dollard can
confirm or deny what I am saying, but I have enough information to prove that Mr. Lesage stated over and over, during the election campaign, that if he were elected, he would give 12 months to the Liberal party to legalize lotteries in the province of Quebec. Besides, I suspect the hon. member for Dollard of trying to prevent me from quoting a newspaper article mentioning him. Without further delay, I quote an item published in Montreal-Matin of May 3, 1963-


Guy Rouleau: It is not the Reforme.


Georges-J. Valade: No, not the Reforme. This is a more honest newspaper than the Reforme. This article says:
As for the Liberal member Guy Rouleau, he promised during the election campaign that a Liberal government would pass an amendment to the Criminal Code for the setting up of provincial lotteries.
Mr. Rouleau being in Vancouver, I could get in touch with Mr. Valade only.
Now, if the hon. member for Dollard is not satisfied with this quotation, I will ask him to deny it officially. Can the hon. member for Dollard, who constantly interrupts me, deny that he promised provincial lotteries, if his party was elected? He will be able to speak later on, but till then, I would ask him to state clearly whether he promised that the Liberal party, if elected, would amend the Criminal Code so as to authorize the province of Quebec to pass its own legislation for the holding of lotteries.
Mr. Speaker, it is now up to the hon. member for Dollard to answer, and I hope that when he speaks in turn on this bill, he will not take advantage of the situation to talk it out.


Prosper Boulanger: It is not him, it is you who are talking it out.


Georges-J. Valade: I hear the hon. member for Mercier. We should be happy to know his contribution in favour of lotteries. I advise him to prepare a bill, if he can do it, and we shall be happy to discuss its merits.
Mr. Speaker, there are of course many things I could say with respect to lotteries. First, the purpose of lotteries is to help hospitals.
The benefits we would derive from them could pay for hospital insurance.
We could also include in those benefits the cost of the promises made by the people who were formerly in the opposition and who are now in office. In this connection, I remember the speeches of the hon. member for Essex East (Mr. Martin) who is now Secretary of State for External Affairs, and also the claims of the Minister of Public Works (Mr. 

Deschatelets) who, at that time, requested that mental and tubercular patients enjoy the benefits of hospital insurance.
I am convinced that if we had a provincial lottery, that would enable the province of Quebec to help those two groups of patients.
Through this legislation, we could probably succeed in reducing taxes in the province of Quebec. Heaven knows how heavily we are being taxed in that province since the Liberal government came into power.
Moreover, Mr. Speaker, one of the purposes of establishing a lottery would be to prevent underhand lotteries or rackets which are conducted in every Canadian city. We read every day in the papers about people being arrested and prosecuted for operating illegal lotteries.
Several judicial authorities have declared themselves in favour of the establishment of state or provincial lotteries so as to check rackets and illicit lotteries.
I would like to take this opportunity to quote an excerpt from the May 3, 1963 issue of La Presse, which reads as follows:
Mr. Justice M. Andre Blain favours the establishment of lotteries "for the sake of the human race".
I could quote many other judicial authorities to prove my point in this respect.
When we propose the adoption of a lottery legislation, the biggest objection relates to morality. I cannot understand that such a question could possibly be raised nowadays. Public opinion on lotteries has greatly evolved in the last 20 years.
In this connection, I would like to quote the opinion of certain church authorities, especially that of Cardinal Griffin, who had this to say on the subject:
The important point, what is immoral is the abuse and not gambling in itself, and in that respect, there are many puritan opinions which would have to be rectified.
In my opinion, these words of Cardinal Griffin bear repeating: ''many puritan opinions which would have to be rectified."
I believe that when we talk about morality, there are indeed highly puritan opinions which need to be rectified.
It is for that reason that we must be realistic. I had the opportunity to realize that in some areas there are groups of citizens who exert pressure who object to the establishment of lotteries simply on moral grounds. It is for this reason that I moved the bill, because it respects those regional trends-


The Acting Speaker (Mr. Batten):: Order. I must interrupt the hon. member and inform him that his time has expired. The hon. member for York-Humber (Mr. Cowan).
28902-5-275}
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Georges-J. Valade: If I may have a minute or two, Mr. Speaker, with unanimous consent, I will conclude my remarks.


The Acting Speaker (Mr. Batten):: Does the house give unanimous consent?


Prosper Boulanger: On a point of order, Mr. Speaker. I should like to remind the hon. member for St. Mary that there is precious little time left before six o'clock and that if, as he said himself about 20 minutes ago, the bill is talked out, he will have to take his share of the blame for that.


Georges-J. Valade: Mr. Speaker, on the point of order, I realize that the hon. member for Mercier will not be speaking on this bill since he is unable to do so. However, concerning the point of order, Mr. Speaker, I should like to say-


Prosper Boulanger: On a question of privilege, Mr. Speaker. I want the hon. member for St. Mary to know that when I mentioned that time was going fast, I did so as tactfully as possible.
Now, the hon. member said I would be unable to speak on the lottery bill, thereby insinuating that I am not competent enough for that, and I would ask him to take back those words.


Georges-J. Valade: Mr. Speaker, I could talk on the question of privilege and say that when the hon. member interrupted me he goaded me, so to speak, implying that if I talked on my own bill I would talk it out myself. He attributed to me a totally wrong intention. The implication of the hon. member was of a kind likely to discredit me in the minds of those who will read Hansard. That intention never entered my mind. That takes care of the question of privilege.
As for the point of order, I should like to ask the house to allow me to complete my remarks, as it will take me only a few minutes-


Marcel Joseph Aimé Lambert: Agreed.


The Acting Speaker (Mr. Batten):: The hon. member for St. Mary will realize that the house has given him extra time already. I am sure he would want to finish what he has to say within a minute or two.


Georges-J. Valade: Mr. Speaker, I thank the members for their kindness. If, for technical reasons, it is impossible to have a vote on this matter this afternoon, I ask the government to submit the problem of lotteries to a special committee of the house for study and order

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that committee to submit a report before the end of this session, so that the members may-study it and the house may reach a definite decision on that matter.
I, therefore, conclude my remarks by reading part of an article by Andre Laurendeau, which appeared in Le Devoir on March 14, 1962:
This is a field where the provincial state of Quebec wants to act and could act. What prevents it from doing anything is solely the moral judgment rendered on lotteries by the Anglo-Canadians and the section of the Criminal Code which translates that judgment into judicial terms.
This is the reason why it seems to us that the obstacle should be removed. The provinces should be free to do as they wish.
Finally, Mr. Speaker, I hope that the house will have the opportunity to vote, in order that we may know the views of the members on the matter of lotteries. If the house cannot take a vote, I again ask the government to consider favourably the establishment of a special committee to look into the matter.


Ralph Bronson Cowan: Mr. Speaker, this is the third occasion in less than a month on which the question of lotteries has come before the House of Commons. I regret very much that the hon. member for St. Mary (Mr. Valade) should have prefaced his remarks by asking members on this side not to filibuster his bill. No member on this side of the house has any intention of filibustering his bill-any more than the hon. member for Swift Current-Maple Creek (Mr. McIntosh), who spoke from the other side of the chamber a little while ago, when he said he was not filibustering the income tax bill but was speaking in favour of the measure.
I am 100 per cent in favour of the bill introduced by the hon. member for St. Mary. In rising to speak in this debate I wish to make a contribution which I did not deliver when speaking on the bills introduced by the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) and by the hon. member for Acadia (Mr. Horner) two weeks ago.
Since the last occasion when this subject was discussed, the Cambridgeshire has been run in Britain and hundreds of thousands of dollars have been distributed to successful prizewinners on this side of the water. Their names have appeared in daily and weekly newspapers throughout the length and breadth of the land. When one finds people in such small places as Meaford, in Grey county, Ontario, holding tickets on the Irish sweepstake, he realizes how widespread is the purchase of such tickets throughout the dominion. Since the distribution of those tickets there have been prosecutions in the

province of Ontario in connection with such small matters as bingo games and raffles. I hold in my hand a cutting from the Toronto Star of last Tuesday in which there is an account of a Canadian Legion branch being fined $225 for raffling a boat, motor and trailer valued at $1,800 at a dance hall on August 1. In the course of the trial, Magistrate Butler, an experienced member of the bench, told the lawyer for the Canadian Legion branch concerned that the remedy for the situation in which his clients and others found themselves lies in the hands of the members of parliament who could change the law. When an experienced member of the bench describes the present situation in Canada as a situation needing a remedy he is describing it as a blight on the body politic. When it comes to the question of lotteries, we can go back to July 8 when the hon. member for Joliette-L'Assomption-Montcalm asked the Minister of Justice whether or not any action would be taken with regard to lotteries in Canada. The Minister of Justice (Mr. Chevrier) as reported in Hansard of that date replied:
I have, indeed, examined the voluminous file on lotteries of which the hon. member is speaking and I notice that during the six years when the hon. member's party was in power it did not take any decision on this issue. I hope it will be possible for me to make certain representations in due time.
I notice that no time is definitely referred to in that reply. We were not told when these representations would be made. I should like to say I do not like the answer given to the hon. member for Joliette-L'Assomption-Mont-calm any more than I liked the reply given by an hon. member on this side of the house this evening when he said that in the previous four years or six years the government supported by hon. members opposite had taken no action with regard to lotteries. Let me point out that for more than three years before the present government took office illegal actions were being committed on the St. Lawrence in the world of shipping, but the government of that day took no action against the S.I.U. However, we are in the process of clearing up that situation. The previous government during all the years it was in office took no action with regard to the pay of members of the House of Commons, but when the present government came to power it did take action and I believe all members of the house and of the other place are satisfied with the attitude this government took.
When we are considering this question of lotteries I do not think we should take the attitude: You did not do anything about it, therefore we will not. We have these two precedents, the precedent of the S.I.U. situation and of the pay of members of the House

of Commons and of the Senate. And I believe that within the lifetime of this session of parliament there will be a change made in the lottery laws in accordance with the desires of such forward looking members as the hon. member for Joliette-L'Assomption-Mont-calm, the hon. member for Acadia and the hon. member for St. Mary.
I should like to refer to some comments made recently by hon. members opposite with regard to widows applying for post office business in the province of Ontario. It seems that one of these women, a widow, is being condemned for her enterprise in soliciting an appointment which has come to her. But I have heard no one make any comment about a poor widow in London who was convicted on October 25 for selling lottery tickets, as her husband had been doing for 20 years prior to his death. If we are to become exercised about the financial position of widows in small towns in eastern Ontario, why cannot we be so exercised about widows in a big city in western Ontario?
Speaking on the bill introduced by the hon. member for Joliette-L'Assomption-Montcalm I mentioned that after making an earlier speech on the subject of lotteries I had received a tremendous number of letters, telegrams, telephone calls and personal visits commending my statements with regard to the desirability of licensing lotteries. The only protest I received was from a minister of one of the Protestant denominations of this country; it was a three page letter which, I assure hon. members, contained more heat than light. I do not like reading speeches, but I should like to read some comments here because I intend to quote biblical references in answer to that great body of Christians who are fighting against the licensing of lotteries by using, practically, only moral grounds. In the 18th verse of the 18th chapter of Proverbs, in the Old Testament, it is stated: "The lot causeth contentions to cease, and parteth between the mighty". Well, if the lot causes contentions to cease, the sooner we introduce lotteries into this country and get rid of the contention which exists with respect to this law among the ten provinces which make up Canada, the better for all concerned. With regard to biblical and religious answers to that group of moralists who are seeking to put Canada in a strait-jacket, I would simply state that the question of lotteries in Canada is completely overshadowed and almost blotted out of human consciousness by the great cloud of hypocrisy that has been built up throughout the years by those who have taken on the self-imposed task of acting as their brothers' keepers by arguing against the continuous demand of the people that lotteries should be legalized.
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I know that definite protests have been received by members on this side of the house from at least two prominent communions of church-going Canadians asking that every effort be made to see that this bill, and others like it, are not allowed to become law. Now I consider myself as regular a churchgoer as many, and more regular than most, and I ask those who are objecting to this bill on religious grounds if they have for a single moment considered the role of lots or lotteries in the lives of the people who have given us the greatest treasure of all- the Bible.
Is St. Matthias held in less esteem than the 11 disciples who remained following the betrayal of Christ by Judas? Of course not. But how many realize that St. Matthias was chosen by lot to fill the post vacated by Judas Iscariot? Under the guidance of Peter, as recorded in the first chapter of the Book of the Acts written by Luke, the doctor, the apostles, numbering about 120, nominated two-to the vacant discipleship and then in the 26th verse we read "They gave forth their lots; and the lot fell upon Matthias; and he was numbered with the eleven apostles."
Would those who seek to deny Canadians the right to participate in lotteries condemn the 120 apostles mentioned in the Book of the Acts, for choosing that saint, Matthias, by a system that is condemned in this country today?
There are many, many references through the Old and the New Testaments to the "casting of lots". It was evidently an established manner of living among the ancients and one can read of all manner of decisions being made by the resort to chance. Without a doubt the best-known episode in the long history of casting lots or conducting lotteries, took place at the foot of the cross on Calvary almost two thousand years ago. In no less than three of the gospel accounts of the crucifixion direct mention is made of the casting of lots. In Mark 15, verse 24, we read:
And when they had crucified Him, they parted His garments, casting lots upon them, what every man should take.
In the 19th chapter of the gospel according to St. John, verses 23 and 24, you will find it written:
Zi. then the soldiers, when they had crucified Jesus, took.. .His coat: now the coat was without seam, woven from the top throughout.
24. They said therefore among themselves, Let us not rend it, but cast lots for it, whose it shall be: that the scripture might be fulfilled, which saith," And for my vesture they did cast lots. These things therefore the soldiers did.
In the book of Matthew, chapter 27, verse 35, that disciple wrote:
And they crucified Him, and parted His garments, casting lots: that it might be fulfilled which

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was spoken by the prophet, They parted my garments among them, and upon my vesture did they cast lots.
Who was the prophet to whom Matthew, Mark and John referred? Why, none other than David, king of Israel, who more than a thousand years before prophesied in the 22nd psalm: "They cast lots upon my vesture".
I am not one to hold up to the world the action of the four Roman soldiers at Golgotha as an example to be imitated, but I do emphasize that the great prophet David recognized that the casting of lots was an integral part of life of his day and age and he knew that the practice would not be stamped out by religious fanatics during the thousand years between his reign and the crucifixion. And please bear in mind that after the casting of lots by the soldiers to govern the division of our Lord's garments, about 120 apostles resorted to chance in selecting the thirteenth disciple.
Since it is evident that all ranks of the population in Jerusalem relied on lots, why are some religious communions in Canada 2000 years later endeavouring to maintain a ban on lotteries? If it was good enough for the disciples, surely it could be adopted with profit by those who seek to follow their teachings and who might very wisely also endeavour to follow their example.
In directing these few remarks to those religious organizations which are making efforts to relegate lotteries to limbo, I would point out that nowhere in the Bible is the practice of divorce praised by our Lord. As He went about doing good, in great contrast to many modern teachers who just go about, He was asked about divorce in the 19th chapter of Matthew. His listeners advised Him that Moses had allowed them to practise divorce and the Lord remarked in forthright terms:
.. .Moses because of the hardness of your hearts suffered you to put away your wives.
In all sincerity I ask those who are opposing the passage of this bill, if Moses took cognizance of the desires of the people and amended the moral law, why can you not take cognizance of the desires of the people and support those who wish to re-establish in this country a practice which was widespread in the time of Christ and which He did not condemn? If the busybody do-gooders who are seeking to confine Canadians within a legalistic strait-jacket with regard to their mode of living wish to follow old time practice they should leave the question of lotteries alone and endeavour to upset Moses' action in allowing divorce.
We have heard arguments in the house over the past several weeks that we should

follow the example of Great Britain by removing the desks from the House of Commons and becoming more of a clublike organization than we are. We are told that in Britain they do it this way and in Britain they do it that way and in Britain they do it the other way and we should follow their example.
In two previous discussions on lotteries in the house I made a passing reference to the national premium bonds in Great Britain.


Georges-J. Valade: Will the hon. member permit a question?


Ralph Bronson Cowan: Certainly.


Georges-J. Valade: The hon. member's Biblical citations have really been amazing to me, but I wonder whether he would discuss the purpose of my bill which is to amend the Criminal Code with a view to permitting the provinces to pass their own legislation in this regard. I would really be interested in knowing if there are some citations from the Bible to support my demand.


Mr. Clancy:: Is the hon. member going to continue so he can call it six o'clock? Let us vote on the matter.


Ralph Bronson Cowan: Mr. Speaker, in answer to the hon. member for Yorkton I would point out that on both previous occasions when I spoke on the lottery bill I sat down in ample time to allow a vote to be taken and I shall do the same thing today, I assure him.
I wish to refer to the fact that Great Britain has national premium bonds, and has had since 1957. The practice of making monthly draws in Great Britain was instituted by the Right Hon. Harold Macmillan in a speech in the House of Commons on the 17th of April, 1956.


Gordon Drummond Clancy: We know that.


Ralph Bronson Cowan: If Great Britain is making use of premium bonds, which is nothing but another form of lottery, and all members of the house are asked to follow the example of the British house by removing the desks and having a more clublike atmosphere, I also hold up the example of Great Britain in that regard.
I also pointed out that in 1956 Lady Tweeds-muir, a member of the British House of Commons, asked the Right Hon. Harold Macmillan if he would allow these bonds to be sold in the commonwealth so that Great Britain could bring in-


Georges-J. Valade: Mr. Speaker, I am sorry, but I must raise a point of order. The hon. member is discussing ways of applying lotteries and he is making comparisons with other

countries, but the principle of my bill is to amend the Criminal Code to allow the provinces to pass their own legislation. I should like the hon. member to speak on the merits of my bill and not fly away from it into the words of pious Biblical personalities. I should like him to comment on the principle of my bill.


Ralph Bronson Cowan: 
Frank Howard: Mr. Speaker, the members of the New Democratic party who are in attendance in the house this evening are unanimous in their contention that this subject matter should come to a vote with the least possible delay. Taking a bipartisan approach I would therefore move, seconded by the hon. member for Vegreville (Mr. Fane) that the question be now put.


The Acting Speaker (Mr. Batten):: Is it
the pleasure of the house to adopt the said motion?
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Mr. Jean-Pierre Cote (Longueuil):: Mr. Speaker, I only wish to make a few remarks.
The matter under consideration has been submitted to the house for several years. In fact, during each session various bills are introduced in order to amend the Criminal Code and thus enable the federal and provincial governments to organize state and provincial lotteries.


Gordon Drummond Clancy: May I ask the hon. member a question? Is it fair of the hon. member to deny the right of a vote on this matter?


Georges-J. Valade: On a point of order, Mr. Speaker, I think that the motion has to be put without debate. I believe the rules of the house are that the motion has to be put without debate.


The Acting Speaker (Mr. Batten):: The
motion that the question be now put is a debatable motion.


Georges-J. Valade: But the hon. member was not talking on the motion. He was talking about lotteries.


Joseph Julien Jean-Pierre Côté: Mr. Speaker, I was
coming to the motion. And since they ask that the question be put, surely we must be entitled to make some remarks in this regard.
In my opinion the successive governments never paid that question all the attention it deserves. From year to year, from session to session, promises were made to the effect that in the naar future the government in office would give that controversial question serious consideration. But there is still no sign of action along this line.
It seems that strong pressures are being exerted on the federal government to preserve the status quo. I am absolutely opposed to the establishment of a lottery at the national level, but as far as provincial lotteries are concerned, I am 200 per cent in favour.
The one thing which seems to delay the amendment of the Criminal Code to authorize lotteries is the pressure exerted by certain groups which are against any kind of lottery. Now, if the federal parliament were to amend the Criminal Code so as to leave the provinces free to set up lotteries, those pressures would be brought to bear upon the provincial governments which, I am sure, are fully capable of taking their own decisions in that respect. Mr. Speaker, if there have been pressures against the amendment of the Criminal Code, there have also been pressures in

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favour of a change. One of the most distinguished persons to speak in favour of lotteries was most definitely Premier Jean Lesage of Quebec.
Mr. Speaker, provincial revenues are so low compared to expenditures that we have not the right to prevent the provinces, through inertia on our part, from trying to raise revenues from other sources or to prevent great amounts from flowing out of the country.
Mr. Speaker, because certain groups from a province object to this bill, there is no reason why all other provinces should deprive themselves of revenues. The province of Quebec wants to institute a provincial lottery; it has expressed this wish through its prime minister, its associations, its newspapers, etc. Are we going to say "no" to the province of Quebec? What reason are we going to offer for such a refusal? Should the Criminal Code be amended so as to allow provincial lotteries, those provinces will not have to institute them, they will be free to do what they please about it.
How prudish can you get? Mr. Speaker, what is wrong in conducting lotteries? Is it worse than horse racing where bets are legalized and certain individuals make millions of dollars? Are those profits used for charitable works? Yet, those racing tracks are operating throughout the country.
Mr. Speaker, I conclude my remarks by saying: "Let us get something done, let us give more freedom to the provinces".


Mr. Gerald Laniel (Beauharnois-Salaberry):: Mr. Speaker, I think that-


The Acting Speaker (Mr. Batten):: The hon. member for Beauharnois-Salaberry.


Georges-J. Valade: On a point of order, Mr. Speaker, I am under the impression Your Honour was just ready to announce a decision on the point I raised that the motion should not be debated.


Mr. MacNaughl:: He made a ruling on it.


The Acting Speaker (Mr. Batten):: I refer to standing order 32(1) (c) which states:
The following motions are debatable:
(c) for the previous question;


Gérald Laniel: Mr. Speaker, first I want to comment on the motion that was put by the hon. member for Skeena (Mr. Howard).


Marcel Joseph Aimé Lambert: On a point of order, Mr. Speaker I think as a result of the motion put by the hon. member for Skeena, which was properly seconded, the effect of which is that what is to be debated is the advisability of deciding the previous question. That is a debatable motion, and if it were to be resolved

in the affirmative then the motion put by the hon. member for St. Mary that there should be second reading of his bill is what would be voted on without debate. Therefore that motion having been put I would submit to Your Honour the ambit of debate was extremely narrow and could not be on the principle of the hon. member's bill.


Mr. Deschaielets:: I would like to elaborate on the different points raised by the hon. member, but seeing it is six o'clock may I call it six o'clock?


The Acting Speaker (Mr. Batten):: Order. It being six o'clock I must advise the house that the hour for consideration of private members' business has expired. As the business to be considered at seven o'clock will be the estimates of the Department of Forestry would the house agree to go into committee of supply now?


Some hon. Members:: Agreed.

The house in committee of supply, Mr. Batten in the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 7 p.m.

[Stage Direction]
1. Departmental administration including $24,000 for grants in aid of forestry research, $1,060,700.
Mr. Nicholson:: Mr. Chairman, it is a great privilege for me to present the estimates of the Department of Forestry. For some years, I have enjoyed close associations with forestry and the forest industries of Canada, more particularly in British Columbia.
It is natural that my associations with the industry have sharpened my appreciation of the importance of forestry, not only to regional economies but to the development of the nation. I speak not only in economic terms when I make that statement, although we all have some knowledge of the importance of forestry to the economy as the largest earner of foreign exchange, as the principal source of employment, that is in the manufacturing industries, I regard it rather as a unifying influence in encouraging the exchange of ideas between governments, between organizations and between individuals. We have 11 governments, the ten provincial and one federal government.
While we have problems arising out of the fact that the topography in different parts of Canada varies and the weather conditions

vary in the different parts, in bringing together the forestry associations and the forest communities as well as the governments of the provinces, I think we constitute a unit through which you can seek joint solutions of common problems. Perhaps the greatest contribution that the federal Department of Forestry can make lies in the continuing development of this new department as a meeting place for the exchange of ideas on problems of mutual interest. Equally important, it may well serve as a clearing house for the flow of information that is necessary, not only for the well-being of forest resources but of other industries that are so dependent on these particular resources.
Having regard to the importance of forestry to the national economy and to the role that the federal Department of Forestry plays, I think that those of you who have had an opportunity to study the estimates will agree that, to say the least, they are modest. If anything, they are on the low side.
The current estimates, as you will see, total less than $18 million, $17.8 million to be exact, of which roughly $16.5 million form the main estimates and only about $1 million the supplementary estimates. This total is less than $1 million-some $900,000-higher than it was in 1962-63. It is less than $7 million higher than 1960-61, the year in which the department was established. This is the year in which the department functioned for approximately five months. It is worthy of note, I think, that of the $6.9 million which represents the increase over the first partial year of the department's operation, $4.5 million has been allocated to federal-provincial forestry agreements. This leaves only $2.4 million for administration, capital expenditures and an increase in research.
I see here some members of this house, who were members of parliament, when the Department of Forestry came into being. I see one hon. member opposite who played a very important part in bringing the new department into existence. As you will see from a reference to Hansard, the raison d'etre for bringing the new department into existence was research. The significant thing is that although the department has been in existence now for roughly three years, the budget for research has been increased by less than $1 million per annum. In contrast I refer to the debate which took place on July 11, 1960, when the hon. member for Qu'Appelle introduced the bill establishing the forestry department. In the speech introducing the bill, he expressed the hope-more than a hope, the decision-that within five years the research appropriation of the department would be doubled. In contrast
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with that hope, when we are now approaching the end of the year, the increase is less than 15 per cent.
In citing these figures and in dealing with the estimates tonight I would ask the members of the committee to recall that these estimates were prepared by the first minister of forestry, the distinguished member for Victoria-Carleton. When I say that there has been this very modest growth, I am not in any way reflecting on my hon. friend the member for Victoria-Carleton. We have been friends for many years and I have a high regard for his abilities, and his good intentions. I want to express appreciation for what he did during the first year or so that he was in office. But his difficulties-and they were not circumstances which he could control-arose out of the so-called austerity program that was introduced just when the new department was getting going. There was a freeze and the department was not able to recruit the staff which was needed. My reason for mentioning the slow growth is because I want to emphasize to members of the committee the fact that the accomplishment has fallen far short of the hopes expressed by the hon. member for Qu'Appelle when he, in his capacity as minister of northern affairs and national resources, introduced the legislation which brought the department into existence.
If one examines the staff estimates of the department's research element, I am sure one would find that there is real cause for concern. In 1960-61 the research element of the department numbered 826 positions. This year the number is 943, an apparent increase of 117. But I would point out that 44 of these were transferred during the second year, 1961, from the Department of Agriculture. Therefore the real increase is 73, or less than 9 per cent. The research staff has certainly suffered a withering process during the intervening period. As a result, at the end of April or first of May this year the research element numbered less than 850 persons; and allowing for 44 transfers from the Department of Agriculture the adjusted figure of 804 is 3 per cent under the authorized establishment of 1960-61.
Happily, Mr. Chairman, I can record some progress in this area, because some weeks ago treasury board authorized recruitment up to 93 per cent of our current establishment, and the department is now working actively to fill the vacancies. We have had some encouraging responses and it is our confident expectation that within a few months the additional support which we need will be available.
Turning now, for a few brief introductory comments, to the votes themselves, vote No. 1

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provides for the departmental administration and the proposed $1.06 million represents an increase of $4,000 only over last year in spite of increases in salaries. Certain intra-vote increases have partially offset the decreases, but the net result is that there is an over-all increase of only $4,000. The professional and special services vote is up by some $10,500, and this is accounted for by the fact that $20,000 is needed for an economic survey of North American timber requirements. Some time ago Canada, as part of the FAO program, undertook a joint study of the timber resources of North America, and $20,000 is required for that purpose.
Grants in aid of forestry research show roughly a $19,000 increase, but this again is merely a paper increase. It reflects a consolidation of certain grants, more than one, into one vote. Telephone and telegraph expenditures are a very good example; they have been transferred into another slot and as a result there has not been a substantial increase.
It might be opportune at this stage to refer to the economics division of the Department of Forestry. That division is financed through vote No. 1, the administration vote. I sincerely believe that it is definitely in the national interest that we have a greater development in the field of forestry economics. It is a specialized field and this is one field which presents real difficulty in recruiting. We have a limited number-I know this from sad experience, having tried to recruit them when I was in industry-of forest economists in Canada, and it should be the job of this federal department to encourage more of this particular type of specialist. A live, active economics division in the Department of Forestry was contemplated when the department was set up. Such a division could make an invaluable contribution to the Canadian economy. For example, a current study is being made with regard to private timber management, and this study is being done in conjunction with the Department of Finance and the Department of National Revenue. This type of work is not only invaluable to legislators; it is invaluable to economics organizations, and it is certainly valuable to most departments of government.
Another area which required vigorous exploration, in my opinion, is market research, and I apply that not only to market research in home markets but also abroad. The federal Department of Forestry I believe can provide a much needed service in this field without coming in conflict with the Department of Trade and Commerce or the new Department of Industry or any other department. I say that because market research in forest products and forest products fields necessitates a

thorough knowledge of forestry and forestry practices, woods species and the products which can be made therefrom. It also necessitates, to do an intelligent market research job, a knowledge of consumer demand, of possibilities of use for new products, and the use of certain tree species to produce new products. So that one of the shortages that I see, which I hope will be corrected before too long, is in this field of market research; and forest economists. If we can recruit them, with the right training they can make a great contribution to the Canadian economy.
Finally, our economists must work to provide meaningful information for long term planning in the field of research. It is no good conducting research unless you know it is going to produce some beneficial results, and you are not going to get very far with research unless you can persuade the executives that they are going to get, in the long run, sound financial returns from the investments they are making in this research.
I would close my general observations on the administration vote with a reference to the information division. Here again I think this is a field in which the federal Department of Forestry can make a great contribution. In order to get full value for money spent on research you have to disseminate it and see that it reaches the right people. Therefore, it is necessary to communicate our findings-[DOT] that is, the findings of the research branch of our department-to a scientific community, and in this respect I believe we are being fairly successful. At least, from visits I have made to different parts of the country, from Newfoundland to British Columbia, I would say the dissemination of this technical information by my department has been quite successful. We must also use our information services to distribute the information to the forest-based industries in different parts of the country. Finally, more than ever we need to bring home to the people of Canada, the general public, the degree to which Canada depends on her forest resources, and the personal stake that all Canadians have in the forest resource in terms of employment, standards of living, recreation, and so on.
We have all been thrilled during recent weeks by the announcement of the wheat deals with Russia, China and other countries. The news was a great relief, I know, not only to the prairie farmers but to transportation companies, dockworkers and others -the news that a billion dollar deal had been negotiated with Russia, some $600 million of which was in wheat. But how many people in Canada realize that, unheralded and unsung, we export $2 billion worth of forest products every year? These are our largest earners of foreign exchange, yet I doubt if

even one person in a hundred in Canada has any realization of that significant fact.
My department has recognized the importance of the information function, and several months ago the deputy minister arranged for the division to report directly to him for policy guidance. I have seen at first hand the benefits of this move. We have a nucleus of well trained personnel, and our effectiveness can be increased further if we put our minds to it.
The reference to my deputy minister leads me to interject that I had hoped he would be with me when these estimates were presented, but he left today to take the chair of the committee on forestry at the FAO conference which opens in Rome early next month. He will be the chairman of the forestry committee of the conference. He is, as many hon. members know, a distinguished forests scientist, with broad experience in business before he joined the department in 1961. In addition he had served as dean of forestry at Laval University. I wish all ministers were fortunate enough to have a deputy minister of that calibre.
Returning to the estimates, hon. members will note there is no change in vote 5 relating to the federal-provincial forestry agreements. This is the second year of a two year program closing on March 31 next. We are reviewing progress in this area and shortly will be in a position to consider future courses.
Turning for a moment to the supplementary estimates, the committee will note vote 11a in the amount of $170,000-the vote to continue the spruce budworm spraying program in New Brunswick. The decision to continue the program during this year was based on a survey of the benefits derived from last year's [DOT]operations.
The activities of the forest research branch are provided for in votes 15 and 20. In vote 15, the operations and maintenance estimate of about $1.98 million includes a very small over-all increase of $10,000. The largest increase is $29,000 for salaries and wages.
Vote 20, the capital vote, is reduced by about $87,000 to $234,000, since, as might be expected, capital votes are subject to fluctuation. They usually fluctuate upward, but in this case they are fluctuating down. There are no very substantial expenditures in this capital field. The largest is for our research laboratory at Petawawa. Some $50,000 is being spent there. I should like to encourage any hon. members who have a special interest in forestry, or a special knowledge of forestry, to visit this laboratory. We have there a group of well trained and dedicated forest scientists who are not working for the money they can get out of it; they are doing a job for
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Canada and it would be well worth while for interested members to go up there and spend a few hours with them.
I mentioned earlier my concern about a seeming lack of emphasis on research operations, proper. In the past two years, funds for this purpose have increased by less than $.25 million. Of this amount, 70 per cent went to insect and disease research, 18 per cent to forest products research, and 12 per cent to the activities grouped as "forest research". Some hon. members may have read the comments on the new Department of Forestry which are contained in the Glassco report. I know I read them and re-read them with interest long before I thought I would be presenting the estimates of the Department of Forestry. As hon. members may know, there were comments in the report to the effect that the distribution was wrong. A question was raised because 50 per cent was spent into research on forest insects and forest diseases, 35 per cent on what they call forest research and 15 per cent only on forest products research. There are several explanations for this. One is that a great deal of this type of research work is carried on by the pulp and paper research institute in a building which was provided by the federal government on the understanding that the pulp and paper institute would supply the staff. However, I should like to compare our figures with those of the United States. The United States spend some 16 per cent on insect and disease study, 60 per cent on forest research, and 24 per cent on forest products research. I am not suggesting that this lack of balance is bad, but I am suggesting that we can, and must, if we are to survive as a forest nation, looking forward 50 years from now, spend more in all these fields. It may well be that it is desirable to change this ratio. But the important thing is that we should be doing considerably more.
I mentioned the forest research branch. That title is really a misnomer. Forest economists and those in the forest products research branch are always doing research into the field of forestry. But over the years, when this branch was a division of the Department of Agriculture, it had the name "forest research branch" attached to it and the name has stuck. I believe we could with advantage give it a new name, but that is not as important as is the need to decentralize. Today we find all our branches reporting to the deputy minister. There is no assistant deputy minister in the picture. This is a situation which should be corrected and it will be corrected very shortly.
We must pursue an integrated research program and I may say that with the approval

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of treasury board we are examining the department's organization in an effort to carry out the lessons which have been learned during the first two or three years of the new department's life.
There are two or three other votes to which reference might be made. Vote 25 relates to the maintenance and operations of the forest entomology and pathology branch. The proposed estimates of $3.4 million will result in an over-all increase of $41,000 in comparison with last year. Salaries and wages will require an additional $32,000, while the overtime allotment is increased by $9,000. The $28,000 increase in professional and special services is mainly accounted for by a payment to the commonwealth institute of biological control. This item formerly was carried in the Department of Agriculture estimates and provides for the acquisition of collections of parasites, and predators which we need to combat forest pests, and for the receipt of research material from other countries. This is not just a contribution to the commonwealth institute. We get good value, as I am sure the hon. member for Qu'Appelle and others with knowledge of this subject will confirm.
During the relatively short time I have been minister, I have had inquiries seeking information on the department's policy in selecting locations for laboratories. I mention this because the Glassco report commented on the fact that our laboratories were removed from research and from academic institutions and suggested this was undesirable isolation. In principle, I expect that any man of science would agree with that observation. But it must be remembered that the federal Department of Forestry is a unique organization. Responsibility for managing the forests lies with the provinces. When we undertake research, this work has to tie in with the work being done by the departments of lands and forests of the various provinces. We have a research unit in Fredericton, another in Quebec, another in Vancouver, and another in Winnipeg. We also have units located in parts of Newfoundland and in other parts of the country, units which are not directly associated with any other institution. But the answer for that is that under our constitutional set-up and division of jurisdiction, it is of the utmost importance that our research officers work in close harmony and proximity with the forest services of the different provinces.
Speaking of British Columbia, it was my pleasure and privilege to lay the cornerstone of a large new research centre in Victoria in August of this year. The construction of that centre began in April of this year and we hope it will be in service within the next 12

months. It is a building which represents an expenditure of roughly $3 million. There was an amount of $196,000 in the main estimates filed in February of this year, but we are making such rapid progress that we have had to transfer over $600,000 from another part of the estimates to take care of the accelerated construction program in Victoria. This laboratory will provide accommodation for all branches of the department in British Columbia other than the forest products research laboratory which is located on the campus of the university.
I might say that in the construction of the research centre at Victoria every effort is being made to incorporate construction features which will make the maximum use of wood. I must say frankly that I was rather horrified when I looked at the first set of plans and found that the flagpole for a forestry research centre was going to be made of aluminum. That flagpole did not stay in the picture very long.
Two other votes, Nos. 35 and 40, deal with forest products research. There is a slight increase there of some $30,000 which is accounted for by the salary increases which met with such enthusiastic applause in the short parliament of last year. There is another item in the supplementaries which is worth mentioning. It is an amount of $1,000-


Lucien Lamoureux: Order. I am sorry to interrupt the minister but his time has expired.


Mr. Hamilion:: Mr. Chairman, I wonder whether the customary privilege could not be extended to the minister to allow him to complete his statement.


Lucien Lamoureux: Is it agreed?


Some hon. Members:: Agreed.


John Robert (Jack) Nicholson: I thank members of the committee. I think it is worthy of mention that a forest products research advisory committee has been set up for the first time in Canada's history. In my opinion it is to the credit of the lumber and plywood manufacturers that in the main they pay the expenses of their delegates and representatives on the committee. They attend two meetings a year and travel from all parts of Canada to do so, and the expenditure by the government for this purpose is only $1,000.
There is a slight increase in the forest products research branch, but it is less than $1,000 compared with last year.
One thing that has bothered me is our forest products research publications. The difficulty arises in getting publication in the two official languages. It is not for lack of trying. As I mentioned earlier, my deputy minister is a distinguished French Canadian

scientist. The problem arises out of the fact that it is not sufficient to have anybody as a translator but rather you must have somebody with a knowledge of the scientific terms and phrases that are used, and you just cannot get enough of these people no matter how hard you try. Their numbers are limited and we get a modest share, but not enough to do the job we would like to do in this important field. We are working on the problem and my deputy minister is giving special attention to it.
The translation of our papers from the French in which they are written in some cases into English, and from English into French, is a very technical operation. If any hon. members have any suggestions as to how we can find an answer to the problem we would certainly welcome their suggestions.


Thomas Clement (Tommy) Douglas: Are the salaries the problem? Are they too low by comparison with private industry?


John Robert (Jack) Nicholson: No. The problem is that the forest scientist, if he is a real scientist, does not want to be a translator. He wants to do research work. He is not interested in becoming a translator. That is the basic problem.
This concludes my summary of the forestry estimates. I have taken a little longer than I anticipated and I want to thank hon. members for their indulgence in extending the time. It is my hope that the committee has found my remarks informative. I have tried to identify some of the problems confronting us. I feel that the new department has made progress in certain fields. There is much to be done. Many hard decisions will have to be made and we will have to do our best, with the support of parliament, to persuade the treasury board to provide us with a little more money to do the important job that lies ahead of us.


Lawrence Elliott Kindt: Mr. Chairman, I shall be brief. I have another engagement tonight and I appreciate very much the hon. member for Qu'Appelle allowing me to speak at this time. I have listened with a great deal of interest to the Minister of Forestry. I served on the committee on mines, forests and waters where the creation of this department was discussed, and it was as a result of the recommendation of that committee that the Department of Forestry was born. Naturally I am deeply interested in the work of the department not only because I had a hand in its creation but also because there are great problems pertaining to forestry in the constituency of Macleod.
I should like to call those problems to the attention of the minister tonight. He spoke to us about the subject of research. We all
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know that in the field of forestry there are two types of research, physical and economic. I shall deal only briefly with the question of economic research.
I would hope that the minister in his wisdom would undertake a project in the Crows-nest pass area of Alberta to determine for the people there the feasibility of a pulp and paper mill. They have spent a lot of time in discussing the matter. They have looked at the physical problems and have talked about the economic problems. But they need help from the Department of Forestry.
I urge the minister, who comes from our sister province of British Columbia, to come to the Crowsnest pass area and we will show him everything we have there. The chamber of commerce in the Crowsnest pass area is headed by Mr. Duguid, a very efficient president, and his capable secretary, Mr. Caldwell, who will place at the minister's disposal every bit of information they have to facilitate a study and bring out the facts concerning the possibility of a pulp and paper mill in the Crowsnest pass. If I should happen to be in the area at the time, nothing would please me more than to drive the minister around and show him what we have. I am sure that as the result of a common understanding among all of us the future of that area would benefit. That is all I have to say, Mr. Chairman. I appreciate the opportunity of speaking at this time.


Francis Alvin George Hamilton: Mr. Chairman, I should like to take this opportunity of welcoming the new Minister of Forestry on the occasion of his bringing forward the estimates of his department for the first time. I do so very sincerely, and I also wish to extend to the officials of the department my great appreciation of the opportunity I had of working with them. I do so not only because of the excellence of their scholarship and their dedication to their work but also because of the fact that they go far beyond the call of duty in basic research involving forest production, entomology, and also in applied research. Any person who has made a visit to the various sections of the department and has seen men who are content to work alone, singlehandedly against the problems they face, knowing full well it may take many years to get the answer, but that possibly that answer can forward the knowledge of science one inch, anyone who has seen these men who are prepared to isolate themselves from the rest of scientific groups to carry through their task to its conclusion, whether it be affirmative or negative, must be aware of their devotion to duty.
As the minister recognized, I had the pleasure of introducing second reading of the

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bill which brought this department into being. As he put it very clearly and dramatically, this is Canada's biggest industry, and because of the peculiar circumstance of the division of jurisdiction the problem of the Department of Forestry has to be dealt with in a peculiar manner.
I intend to come to that part of my remarks at the end, but on this first item, I am going to go back, if I may, to deal with one or two of the subjects the minister raised before I go into the peculiar characteristics of running the forestry department. I think the house sat and shared its sympathy for the minister in the problem of research personnel. No section of the government of Canada has more being done in it than the forestry department, and with less personnel.
The job of a minister in fighting for his division, branch or department, as the case may be, is to present the facts with all his skill and with the hope, as the minister said, that his colleagues will see the virtue of putting support behind this particular type of operation. I hope that the dreams we had when we started the department over three years ago will not fail to be realized. We hoped we could double the research personnel in five years, but this is far from being accomplished. We hoped we could extend the extension services into every nook and cranny of the forest industry, not only among the large, integrated operations that exist in the industry but right down to the smallest saw mill operator in any part of Canada.
We hoped three years ago that we could bring to the provinces some of the leadership that seems so necessary at the chaotic level of the marketing arena. I do not think there is any question that in the management of these resources by the provinces-because under the constitution they do have ownership and the right to control these resources-each of the provinces has done a particularly fine job. So, there is no question of complaint as to the responsibility. But the fact remains that we no longer are dealing with an industry which has a problem of marketing within the provinces, but are dealing with an industry where the world demand factor is growing steadily, and the work done by the forestry committee of FAO has demonstrated over and over again that this demand factor is rising.
It is true that sometimes over a period of five to 10 years there is a drop in demand because of temporary over-capacity to produce in relation to that demand, but eventually the long term curve takes hold and the

future demand for our forest products, particularly on the pulp and paper side, is exceptionally bright. But because our organization is such that theoretically we have 10 separate management organizations this emphasizes the necessity of the federal government, with its particular interest in the marketing of these products, to try and bring the 10 governments that manage these resources together, in some sort of arrangement where they work together to achieve the opportunities thaat are there. I would be interested to hear from the minister some sort of report of the meetings that have been held between the federal government and the provincial governments, because it is in this field that there is so much to be done.
I think the minister would agree with me we have no complaints on the score that the federal government has stepped up the money to the provinces under the agreements entered into. As the figures show, the amounts have jumped from $3 million to $8 million a year in aid to the provinces under five different types of agreements with them, starting out with inventories and going down to stand improvement agreements. But even though this is a good start and is draining a considerable portion of the money from the department, there are still major problems on the production side.
I think the minister is aware of the Kennedy royal commission report in 1947 and the Ontario conservation report some five years ago, which indicated that some six million to eight million acres of Ontario farmland should be transferred over to the forestry side of the economy. As a person who is interested in all resources I naturally hoped that this type of operation would come under the aegis of agriculture, because in the intensive type of production that will be required in the future, the farmer is the logical person to do that type of work. What I am suggesting is that here we have the leaders of thought advocating that this has to be done, and by all the rules of good land management the forestry use is the best use of land which in many areas is marginal.
Therefore I would like to hear what progress has been made in working out with the province of Ontario some form of much more rapid progress in tackling this problem of reforestation in that province. We here in Ottawa live in the centre of the Ottawa valley and we know that on both sides of the river the problem is the same. This is one of the first areas in which the reforestation program should be stepped up. When I mention the province of Ontario, naturally I do not overlook that this also applies with equal weight to the provinces of Quebec,

New Brunswick and to parts of Nova Scotia. As the minister knows, it is not so much a problem in the west.
I noticed in the estimates the increase in money spent under these agreements, and I would hope some time, through questions and answers, we could find out just a shade more about what type of forest agreements are being made with these provinces, whether they are crown forest or county forests, and how much is going into woodlots and that type of thing.
Having dealt with the more or less orthodox part of the Department of Forestry I think we can say we are well satisfied with the work that is being done between the federal government and the provincial governments in relation to these agreements, and the friendly attitude that exists on both sides. I also think we are extremely well pleased as Canadians, as I said earlier, with the tremendous quality of the research work being done, both basic and applied. However we still think much more has to be done in extending it, but in his remarks the minister showed he is well aware of that.
I do not want to prolong my remarks, but I would like to suggest, if it has not already been done, that a great opportunity exists for the minister to achieve giant, forward steps, for forestry and the whole forest industry, by recognizing that machinery now exists through which he can guarantee to the forest industry of Canada the maximum advantage. I am referring to the machinery known as ARDA, the Agricultural Rehabilitation and Development Act. Looking at it for the moment as simply a matter of the best use of land and water, forestry is the long term solution to the problems that now beset what is called the agricultural industry.
I think it will be recognized that this solution must, by the very nature of the growth of a tree, be a long term solution, but I would hope the minister will make himself fully aware not only of the terms of the ARDA legislation, which is administered by the Department of Agriculture, but will also make himself fully aware of the philosophy behind ARDA. Speaking now more or less on the agricultural side, as opposed to the forestry side, I would point out that forestry was one of the main hopes of those who drafted that ARDA legislation. I am not downgrading the other uses of land and water for wild life conservation, recreation and so on; but in forestry lies the main economic hope that we can do something to redevelop many of our areas which at present do not give Canadians a high standard of living. I am not going into the details of why lhat is so, but it is well understood.
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I hope the minister takes this suggestion in the spirit in which it is offered. In a department full of highly skilled personnel, which does not require too much time on administration, he has ample opportunity to make certain there is someone on the forestry side positively and always aggressively trying to be part of the ARDA concept. He should press his colleague, the Minister of Agriculture, to be in on the ARDA discussions. He should accept no excuse from the Minister of Agriculture because, in the formal sense, agriculture is completely intermarried with forestry. If he does that, then not too many years from now we will see many, many times more farmers on the land than at present, because forestry will give a higher return per acre than any other use.
Therefore I put some feeling into this plea to the minister, that he should not let the Minister of Agriculture be the only person interested in ARDA. The door is wide open in its philosophy and principles, and if the minister, on behalf of those who believe in the ARDA approach, makes certain he is always putting forward the viewpoint as to how forestry can do so much to help solve these tremendous adjustment problems, he will be taking the right approach. I refer to the type of living of many people now in the marginal agricultural areas, and he should not forget that the human factor in these problems is our main concern.
Now, the next suggestion I want to make relates to something traditional in any discussion of forestry and has been referred to already by the minister. This is the question of marketing. This is going to be one of the most difficult tasks because in the field of marketing the jurisdiction in relation to the forest industry lies almost entirely with private enterprise. Outside of the timber board in Saskatchewan and perhaps one or two other areas about which I do not know, I believe private enterprise has the responsibility for selling all forest products. However, we have a federal interest, and a big one. We have an important forest product section in the Department of Trade and Commerce.
If hon. members recall what I said when I introduced the bill establishing this department, I noted that there had to be the closest liaison between the economic division of the forestry department and the forestry division of trade and commerce. I believe this was a good suggestion. However, the difficulty arises as a result of the fact that all you can do with private business is persuade, and at times persuasion has its limitations. If you have a strong national organization such as exists in the pulp and paper industry,

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you can make some forward progress. However, the pulp and paper industry has developed traditions in its marketing which do not always jibe with the good of Canada.
I am referring to the fact that many of our pulp and paper mills have their production tied up to some newspaper either in Canada or outside of Canada, mostly outside of Canada. They are not free agents, and therefore, cannot take advantage of the opportunities available to their products in other countries. This tradition is continuing. We see a situation where foreign companies are coming into Canada to get timber rights, and establish a mill in order to satisfy their own demands. There is an integrated set-up in the pulp and paper industry, and in other industries as well, which imposes particular problems on the minister. He has to think his way through the situation to see how he can manage to lead private enterprise to conduct its own business, and yet put in front of them the financial rewards that will be greater than those they are receiving now if they adopt new approaches. He can direct their attention to the new types of trade patterns that I see in the future.
The previous government was studying this problem. One of the things we did, and which I bring to the attention of the minister, was to amend the Combines Investigation Act to give these companies the right to combine.


John Robert (Jack) Nicholson: Perhaps the hon. member for Qu'Appelle will recall that I presented the brief for the forestry industry which brought about that amendment.


Francis Alvin George Hamilton: I well remember. I hope the minister sees the possibilities that lie in that amendment. You cannot force these companies, under the free enterprise system, to do what you think is right. However, if you lead them the right way, as you know, you may be able to get that type of action which I think will be a good thing. I do not want to go into detail on this for very obvious reasons. I think the minister should be allowed the maximum freedom of movement in trying to lead these industries into fields where there are greater opportunities for themselves and for Canada.
I am going to be critical, if I may, not in any personal sense, and not of the minister or the department, but of the fact that I sense, if I read the situation correctly, there is a tendency towards apathy in connection with some of these difficulties we face. I wonder, for instance, just what has been done to see that the trade and commerce officials are doing the same thing for the forestry industry that they are doing for other industries. I refer to the trade promotional drives. I sense, in looking at the reports and in reading what

is available, that there is apathy. I do hope I am wrong and that they are working just as hard for the forest industry as they are for some of the other industries.
Then, the next problem I mention is the question of co-operation with the provinces. I think it is lagging. I know there has been one meeting, and I watch for all the references I can as to what is happening. I would suggest, to put my criticism in a positive way, that there is a need for a strong initiative on the part of the federal government to bring the provinces together in so far as those departments interested in forestry are concerned. We have had a tradition, in the field of agriculture, of regular meetings with the minister. This pattern applies to other segments of the resources side of government activity. Will there be an annual meeting of forestry ministers? Will there be a frank discussion, preferably behind closed doors, about these touchy problems of taxation, for example? Here you have an industry caught in the centre, and the minister knows this better than I do, of a tax war between the provincial treasurers and the federal Minister of National Revenue. There is also a question as to the type of taxes to be imposed by provincial governments.
The problem has been presented many times and this is one of the reasons I think a minister working full time for this department, could profit from a meeting with his colleagues in the provinces and a frank discussion of these things. This leads me to the big suggestion which I hope is in the mind of the minister, namely that the forestry industry in Canada, provincial, federal and private, is under legitimate attack today because it has not developed what I would call a genuine national forest policy. I cannot put the responsibility on any one group because they all know the problem has to be met and they await leadership. The provinces own these resources and maintain them. They are jealous of any interference. Private industries usually operate through the provinces, and they do not want interference from government. Can the minister be sufficiently diplomatic to make all these three divergent groups work together and co-operate in the type of program that is of advantage to all, and yet still retain the jurisdictional rights of each while giving each the maximum freedom.
I am suggesting that there is a precedent to this type of approach. I refer to co-operative federalism. I do not want to go through the list of things that have been accomplished by using this approach. However, there was the working out of the roads to resources program, the planning of the resources for tomorrow conference, establishing the Canadian committee of resource ministers, the ARDA

program, the evolving of co-operation between the ministers of health and labour across this country. All of these touchy problems were resolved by this method of cooperative federalism. Today, in spite of the growth towards co-operative federalism in the last four or five years, we have been surprised to see during the last six months a direct infringement into the provincial field which has caused a furore concerning the municipal loan fund, the pension plan, the Department of Industry and even the expected scholarship plan. This shows that at least many of the minister's colleagues in the government have no knowledge of the forward progress that has been made in the last five years. In the Department of Forestry there is no question of divided jurisdiction, because jurisdiction lies with the provinces. I would say, therefore, it would be well for the minister to use the co-operative federalism machinery that was established by the previous government in solving this touchy problem.
I think that with the obvious maturity, responsibility and business background of the minister, there is a good chance of making this project work. I do think that there are enough facts before us now to warrant a meeting with the provinces to see if we cannot move towards these objectives that we all want. This means working together on overseas markets, working together to use the undeveloped areas on the northern prairies as well as the interior of British Columbia which could stand more pulp and paper mills. The minister knows the other places where you get pulpwood. If we are going to make the maximum use of our resources, get the maximum opportunity that is offered by our export markets, we have to use the co-operative machinery developed under ARDA in connection with forestry. I hope I have not bored the house too much with these remarks but I wanted to keep them to generalities under vote No. 1 in the hope that I can add something positive to the discussion today. I want to thank the committee for giving me such close attention.


Herbert Wilfred Herridge: Mr. Chairman, first of all I wish to congratulate the minister on his appointment. We all know he has had considerable administrative experience generally, and a close association with the forest industry in British Columbia. We all wish him well in all he undertakes to promote this industry. I cannot lose this opportunity also to pay tribute to the devoted technical staff of the Department of Forestry who carry on this very important work, behind the scenes as it were, almost unrecognized by a large percentage of the Canadian people. I sometimes get quite annoyed when I see the attention which is
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given to some trivial and frivolous matters, and possibly a lack of interest in basic questions like we are discussing this evening.
I also want to pay tribute to all those cooperative organizations in Canada who played their part in promoting the welfare of the forest industry of Canada. For example, the Canadian forestry association, with whose work in British Columbia I am well acquainted. Last year they trained some 800 youngsters at Evans lake, giving them short courses in subjects related to forestry. They have also carried on other excellent work. Then there is the institute of Canadian foresters, and there are numerous growers organizations, conservation organizations and local bodies. All have played their part in the promotion and development of forestry policy in Canada.
I think it is essential that if the forest industry is to receive its proper development in the country we should have the participation of a large percentage of the Canadian people through their organizations and so on.
I must say I listened with interest to all the minister said, and will make a reference or two to his remarks as I proceed. I also listened with interest to the hon. member for Qu'Appelle, and I want heartily to endorse the plea for a close association between forestry and agriculture, particularly in the development of the ARDA program. I know that program has been very close to the hon. member's heart and I willingly give him full credit for all that he did in initiating that program, one which I hope will be continued and extended in the days ahead.
The estimates of this very important department provide an opportunity for us to discuss the role of the federal government in the development and conservation of our forestry resources. The objective, as I see it, of the government's forestry policy should essentially be to acquire for Canada as a whole the greatest possible present and future benefits in the development of our forest resources in relation to the development of all our other natural resources.
I have a particular and personal interest in this subject as the result of my life's experiences. I have lived in the woods all my life, and some members of this house seem to go and hide in the woods on occasions when they are here. I am an old logger, Mr. Chairman, and cut my first log in 1906. I also have the honour to be one of the surviving charter members of the royal and ancient order of upper Arrow lakes cedar savages, so I think I have laid the foundation for my qualification to speak on this subject.
For some seven or eight years, on behalf of this party-because this party has always

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been particularly interested in the conservation and development of our natural resources -I have moved motions urging governments of the day to call a federal-provincial conference for the development of a national forest policy in co-operation with the provinces. On every occasion annually, when my motion was the subject of debate in the house, in ordinary language it was loved to death. However, on February 12, 1958, the former prime minister, now leader of the official opposition, announced that a national conference on conservation would be called. We in this group were delighted with this announcement, as were a good many other people too. The former government did do some very worthwhile things, and I think we should give them credit for them. This is true particularly in the field of natural resources and agriculture. They got on to rather thin ice on some other subjects, but I will leave that to another occasion.
As the result of this announcement the provincial premiers were invited to participate in preliminary discussions for the planning of such a conference. I am very glad to say that all the provinces responded favourably and the first meeting of the national steering committee, consisting of ministers from all provinces and from the federal government, was held on November 17, 1958. These were the first steps taken toward the development of a national policy. At this meeting it was agreed to hold another conference on Canada's renewable resources. A research secretariat worked for almost three years to plan and prepare for this conference, and I followed the course of that steering committee with great interest.
The resources for tomorrow conference was held in Montreal from October 23 to 28, 1961. Some 700 delegates representing federal and provincial governments, universities, industry, and numerous organizations across Canada, attended. I think it was an historic event in the development of policy with respect to natural resources in Canada. This conference came to a number of important conclusions, and I mention these, Mr. Chairman, because there are some hon. members in the committee not well acquainted with the developments over recent years with respect to this policy. It was found, as many of us had contended for years, that there was a lack of co-ordination between governments and also between departments in governments. I have noticed this lack of co-ordination on occasion between the wild life branch both in Ottawa and in British Columbia and, say, the forestry service. This frequently occurs. It has also occurred in the Department of Agriculture in cases where it plans without consultation, and things like that. This lack of co-operation has created

serious deficiencies in policy in resource development and management. While the conference recognized the existing system of Canadian federalism, in which the ownership of natural resources largely rests with the provinces, it also recognized that fiscal monetary and trade policies are the direct responsibility of the federal government.
The interesting thing in the development of this conference was the clear understanding almost from the first of the responsibilities of the respective governments in this field. The conference developed a much greater appreciation of the responsibilities of federal and provincial governments and the need for a continual exchange of views between governments and their administrative personnel. The members of this group have dealt with that aspect of the problem over and over again throughout the years. To this end it was agreed by the participants to the conference that there should be some provision for a continuing review of resource policy and problems between federal and provincial governments. Therefore, these governments later agreed to the formation of a resource council. The establishment of this council, which was another interesting step in the development of this policy, was announced on February 6, 1962 following the final meeting of the resources for tomorrow conference steering committee. This has set an example for other departments, in my opinion, Mr. Chairman.
The Canadian council of resource ministers represents a new co-operative approach between federal and provincial governments to the problems of resource development. The council was established on the basis of equal participation of federal and provincial governments with a rotating chairmanship-an excellent arrangement. This arrangement provides for the first time in Canadian history an intergovernmental forum within which resource policies can be studied and coordinated. I notice that the minister in his opening remarks mentioned that the resources for tomorrow conference had been a unifying influence, and anyone who has followed the course of the conference, and of the council appointed since, realizes that it has been a splendid unifying influence around the common objective.
Recently in Montreal the Hon. Rene Levesque, of the resources ministers council, said that effective co-operation in the development and the uses of our natural resources through federal-provincial co-operation could be the most effective guarantor of Canadian unity in a workable confederation of provinces. We agree wholeheartedly with this statement of the minister, and endorse it completely.

I want to emphasize this fact, and I have kept in fairly close touch with what has been going on with respect to the council, that the working of the council and the spirit and purpose of the council has set an example for other departments of federal and provincial governments to follow. It has been mutually advantageous. They are doing constructive work and approaching the common problem in the right spirit and with the correct purpose. I must say that in the formation of this council we have laid the requisite foundation upon which to build a sound forest conservation and development policy for the provinces and for Canada as a whole, based on the principle of co-operative federalism, and it should be given effect to because they have recognized the problems. They have agreed on the principles on which the council will work and on the need for action in this direction. In my opinion government forest policy must be directed toward the greatest benefits for the largest number of people. The federal government is responsible, together with the other governments, for the development of forest policy with respect to both the publicly owned and the privately owned sectors of the economy. Although the greater part of Canadian forest land is public property, all governments have responsibilities and authority related to public and private ownership. For instance, their responsibilities for providing benefits for the people as a whole may justify regulation of the practices of the private owners where their policies conflict with the public interests; on the other hand, the government's authority with respect to taxation, land use and education policies should be exercised to aid and stimulate the practices of private owners where those practices contribute to the general welfare. In the development of this forest policy we have, as a result of the exercise of the principle of co-operative federalism, an opportunity from the viewpoint of members of this group to demonstrate what can be done in building a sound democratic society on the basis of what we call a mixed economy, the public and the private sectors both working to the general advantage.
I think the report the minister has made to the committee clearly indicates the scope and value of the department. For years we urged the establishment of a Department of Forestry. There were a good many who thought it was satisfactory to have this organization remain merely a branch within another department. But anyone who reads the annual report of the department, anyone who has read the publications of the forests products branch, will realize that this department is most necessary at this time. If I may introduce a personal note, may I say
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that the present director of the forests products laboratory in Vancouver is well known to me. I knew him as a boy. He used to travel several miles to come to my little log cabin in the woods at week ends when he was let out of school because he thought I made the best hotcakes in the district. I am very pleased that this young man who grew up around the Arrow lakes should now be director of a forest products laboratory. I am referring to Dr. Joseph Gardner.
I wish, now, to make a few suggestions to the minister with respect to federal forestry policy. I think there is need for a continuing review of forestry policy. During the past 15 years, to the best of my knowledge, the forest industry in Canada has been studied by at least seven royal commissions in the provinces. In addition, studies have been made by private industry and by other organizations. There is a growing public interest in sound forest management policy. There is no question about that. In view of the fact that forest policy to date has been the result of a large number of inter-related policies-it has grown up over the years on the basis of piecemeal legislation-it is desirable, in my view, that the present policies be reviewed in order that all sections may be correlated to meet the current political and economic developments. It is now time for government to take a searching look at our legislative policies and practices to devise a co-ordinated policy that will meet present needs and trends. I think this would be most appropriate in view of the excellent co-operation the federal government is getting in connection with this question from the ministers council of the provinces.
My second suggestion concerns the need for the development of public understanding and appreciation of the role the forest industry plays in the development of our economy, the maintenance of our water resources, wild life population and the provision of recreational facilities. This is, of course, in addition to the major economic role which forestry plays in Canada. In making this suggestion I am not reflecting on the present information and public relations branch of the department one iota. I give them full credit for what they have done. However, while there has been an excellent service, a greatly improved service throughout the years, especially to those interested in forest management and operation, I still think there is a need for an extension of the public relations work so as to reach the public as a whole. I think there should be a much wider appreciation of the value of the industry to Canada, and I am suggesting that the information and public relations branch should

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broaden its activities. I believe the minister should give consideration to the extension of these services so that it would be possible to inform and interest both the public generally and students in our universities, high schools and public schools.
I am a firm believer in the principle of the conservation of our natural resources. I believe this principle should be instilled in our young people, commencing at public school level. It is surprising how little appreciation there is among children in some of our city schools of the value of our natural resources, of our land, our wood and our water, in our daily lives. They live on asphalt. They live, many of them, in apartments. They live an unnatural life in many respects and I think we should do everything possible to inform them of the beauty and value of our lands and forests. We should do all we can to obtain the co-operation of the voluntary organizations in this respect. I hope, therefore, that the minister will extend the good work of the public relations branch and I believe a good deal could be done by seeking to interest young people in public schools, high schools and universities.
The minister clearly indicated-one would not expect him to mention figures or to speak too frankly in this connection-that he believes his department should have additional funds in order to fulfil completely the role it has to play in Canada.


Thomas Clement (Tommy) Douglas: Is there any minister who does not?


Herbert Wilfred Herridge: Yes, but I think this case is so different from that of the Department of National Defence. The minister was most modest in his implications. I am sure all members of the opposition will do their best to support the hon. gentleman in his plea that this important department should receive some additional funds. When one considers that the total amount involved here is some $17 million as against roughly $1.5 billion for defence, I think we have things a bit out of perspective in this country. Surely we can provide the funds necessary to pay our technical staff well, extend the information services and improve the position of the department generally.
I wish to turn to another facet of the policy of this group to deal, generally speaking, with policies with respect to the private sector of the economy. I wish to say a few words about a development in forestry under private ownership in Canada, and to take the opportunity in this connection to bring to the attention of the committee the good work which has been undertaken by the Canadian tree farmers association. In 1959, a group of

individuals, some wealthy, some of modest means, and some poor, got together and incorporated with a federal charter, the Canadian tree farmers association. They had two things in common, they owned forest land on their farms and they wanted to improve their income from marketing conditions. I have the honour to be a director and vice president of this lively and vigorous young association, of which the hon. gentleman already knows something.
I remember when the minister, in his former capacity, presented a brief to the then cabinet on behalf of the forest industries, urging improvements in marketing facilities. I should judge the brief was presented to good effect and I trust that when others now present briefs to the minister they will get an equally favourable response to their representations. In its short life, this association has inspired original thinking about our private forest resource by emphasizing the potential productivity of these private forest lands and the important role that private forestry can play both in our wood using industry and in our agricultural economy. That was mentioned this evening by the hon. member for Qu'Appelle. There is a close relationship.
The purposes of this association are enumerated at length in its charter and they may be summarized briefly as follows: Stimulating co-operative action between producers, industry and government based on co-operative and individual initiative to obtain maximum productivity on private forest lands in perpetuity, on sound management principles, and to overcome obstacles to the marketing of wood from private lands, which exist primarily in some sections of eastern Canada.
This association's achievements in its four-year history are quite significant. From a modest beginning of less than 100 members in 1959 membership has increased by one-third each year, from year to year, and it now has members in all parts of Canada. Its Ontario members are now organizing as an affiliate of the Ontario federation of agriculture. I had the honour to be present and speak at the meeting in Carleton Place a week or two ago that dealt with this subject. It will work as a part of agriculture in the same way that private forestry on this scale is classified in most European countries.
What interested me at this and other meetings of farmers in Ontario which I have attended in recent months is the growing interest of young farmers, many of whom realize that they have a number of acres of marginal land on their farms which are better adapted to the production of timber

than agricultural crops, and there are others, of course, who wish to go in for planting and things of that sort. I was impressed by the interest of the younger people who want to find a way of farming the land their fathers owned more efficiently and to greater benefit.
Two years ago the association introduced its monthly publication, The Tree Farmers' Guide. This is a very interesting publication with news and ideas for the woodlot owner to help him to increase his income from this part of his farm. There are a lot of other people who are interested too. Persons who live in cities are finding this a very interesting sideline and hobby, and in many cases it is of some profit to them.
This association has been very successful in creating interest among the growing numbers of urban residents who own farms devoted to wood production. It is answering the search by these people for knowledge on how to manage their forest properties. There is a need for more, well informed forestry extension services and we ask the minister to give consideration to that.
In the Scandinavian countries private land forestry is an integral part of agriculture. These countries have been eminently successful in developing their forest based industries. Farmers co-operatives have played a very significant part in this success story. The farmers forest co-operatives in the Scandinavian countries particularly have entered the wood processing phase by owning and operating paper mills and saw mills of some size. The farmers in these countries conduct their own wood product exporting activities. This is from privately owned forest lands in the Scandinavian countries.
The Canadian tree farmers association has a strong base in Quebec where it originated and expanded, until now it has membership in all provinces. The government of Quebec, and we give them credit, have taken the initial steps to develop and encourage private land forestry related to agriculture. They have established marketing boards for farmers' pulpwood under their marketing legislation. This has provided the farmers of that province with a quota each year for the sale of pulpwood. I think the Saskatchewan government has established a timber marketing board of a similar nature, but to meet different circumstances. It has set the price for sale to the pulp and paper industry, and on an increasing scale so that the farmer receives a more equitable price for his wood. At the same time, the Quebec legislation provides a means by which the farmer's annual cuts may be limited to the growth of wood on his farm.
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The farmer must be prepared to accept this control in return for an improved market for his wood. I think this is a very good principle indeed. He is given security of market in return for sound management of his private land.
I also want to bring it to the attention of the house that the Quebec government is co-operating under ARDA through agreements to study the problems of private wood-lot forestry in that province. Incidentally, under ARDA the federal government will pay half the cost of salaries of increased forestry extension services for farmers, and I hope they take advantage of that clause in the act. The Quebec model in marketing and co-operation under ARDA should be followed by other provinces which have a marginal land use problem. We have some in British Columbia as a result of clearing unsuitable land in the early days.
Let me say that the work of the Canadian tree farmers association has been described and praised in a number of national publications during the past year. I will give these references for the benefit of any who may be interested in this important rural development activity, and it is going to be more and more important in the years ahead. The Rural Co-operator of the 8th of January, 1963, contained a two page story about the association's policies and activities. The Financial Post of the 15th of June contained a full page story about tree farming, which was written by one of the association's officers. This article quoted extensively from a brief which the association presented to the Senate land use committee in November, 1962 entitled "The Case for Expansion of Private Forestry in Canada".
This brief was well received across Canada and received considerable praise from numerous members in the other place. I commend it to hon. members if they are interested in how to put 57 million acres of private forest land in Canada to work for the owners to the advantage of the Canadian people, to reduce unemployment and to improve the standard of living in those rural municipalities which at present have large areas of marginal land.
The Family Herald of the 1st of August, 1963 contains a thought provoking challenge to the private land owner and to every provincial government in Canada. This article was written by the secretary treasurer of the Canadian tree farmers association. In this article there was included an eight point program for greater income from the farm

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woodlot. However, I will have to deal with that program at a later date because I see my time is rapidly passing.
I suggest to the minister that consideration should be given to assisting the Canadian tree farmers association in publishing their monthly paper or bulletin, as we might more properly call it, The Tree Farmers' Guide, and that this assistance might be given either through the Department of Forestry or the Department of Agriculture in similar fashion to that now given to the agricultural institute of Canada. I think the department assists some of their staff in the preparation of articles and lends them some of its staff for a few days when publication is about to take place.
I urge the minister to give consideration to that because this work is being undertaken on a voluntary basis by an increasing number of persons who are interested in developing this aspect of our forest resources in Canada. Finally, I want to say once again that the members of this group will welcome all the minister's undertakings for the development of sound forestry policies in Canada that will be to the advantage of this and coming generations of Canadians.


Mr.   Paiierson@: Mr. Chairman, I just want to take a few minutes of the time of the committee this evening to make some observations with respect to the estimates now before the committee. We have listened tonight to a number of speakers who have delved into the problems of the forest industry to a considerable extent. Possibly some of them spoke from personal experience in the forest and lumber industries and I am sure that we appreciate the observations to which we have listened.
First of all, I should like to join with other hon. members in congratulating the minister on taking over this portfolio. I think it is most appropriate that a member from British Columbia should be chosen to fill this very important post. His experience in the past will no doubt be of tremendous value as he applies his energies and interest to this comparatively new department, and I am sure we all wish him well in carrying out this responsibility.
I am sure we all have an understanding and appreciation of the importance of the forest industry in our national life. Those of us who come from provinces where it is of vital concern provincially also take a wider view because we know it has a tremendous bearing upon the economic welfare of our entire nation. I was very interested to receive a copy of a booklet entitled "The Pulpwood Harvest" published by the Canadian pulp and paper association. In the first section

there are a number of very interesting factors which are brought to our attention. I believe the facts are very pertinent and I should like to refer to three or four very brief paragraphs. The first section calls attention to the fact that Canada is after all a forest country with more than half of its land wooded and suited only to the growth of trees. It goes on to state:
Directly and indirectly, the forests generate a major portion of the income of her people, and their influence in shaping the economic, social, and cultural progress of the nation has been immeasurable.
The third paragraph is as follows:
The story of forest problems and forest operations best begins with the story of the forests themselves. They comprise a belt, generally from 600 to 1,000 miles wide, which extends from the Atlantic, curves north on the prairies, and dips south to cover most of British Columbia. This is the vast and bountiful reservoir from which pulp and paper and the other forest industries draw their raw material.
Further along it says:
During the years since then, the forests have remained a great bastion of Canadian commerce. From them, today emanates more than one quarter of the production of Canada's primary industries. Shipments of forest products comprise more than a quarter of the nation's exports, and of this amount pulp and paper accounts for about 70 per cent.
The final paragraph says:
The forest, thus, is a resource which pours out bounty to all Canadians at the rate of more than a quarter of a million dollars every hour, day and night. It is a resource in which everyone has a stake, and which every Canadian should seek to use wisely.
These brief quotations from this book once again emphasize the importance of this industry to our economy.
Forestry plays a tremendously important part in the provincial economy of British Columbia. I have with me a copy of the budget speech dated February 8, 1963, presented by the Hon. W. A. C. Bennett, premier of British Columbia and minister of finance, and on page 13, dealing with provincial wealth, it points out with respect to natural resources that the present value of inventory so far as forestry is concerned is $3 billion. Revenue from lands and forests in 1962 amounted to $34,840,374, and it is estimated that it will amount to $38 million in 1964. Therefore we in British Columbia are especially interested in this particular phase of our economy and, as I have stated, I think it is suitable and proper that an hon. member from British Columbia was chosen to head the Department of Forestry.
When he introduced his estimates I listened for some references by the minister to the recent conference which was held, and I hope that before the estimates pass he will

give us some insight into what happened at that conference. It may be that all the details cannot be passed along to us, but we would welcome a summary and a reference to the attitude of those who participated in it and what they anticipated so far as the combined efforts of federal and provincial authorities are concerned.
The minister stated that his department would facilitate the exchange of ideas. Like every other industry I suppose each area has its own problems which must be faced and solved, in so far as they relate to each specific area, but there must be some areas in which the problems are identical and the exchange of ideas in various fields would be of value to the various provincial administrations. We think of the conservation problem, and in this same book to which I have referred, dealing with forest problems it states:
The task facing Canada is to manage the forestry so as to provide harvests in perpetuity, and at the same time to increase their productivity.
The hon. member for Kootenay West has referred to the need for conservation. We have heard him speak on this subject many times, and reference has been made to the problems of protection of the forests from insects, disease and so on. Here again it seems to me an exchange of ideas would be very beneficial.
The main thought tonight has been devoted to the field of research connected with wood products. The federal Department of Forestry could be a clearing house for information in this respect, providing an exchange of ideas that would be of mutual benefit to all concerned.
The minister referred to the problem he faces in building an adequate research team. For some years past the various provincial governments have developed research agencies of their own. Universities and private industries have co-operated in research, and I think all the information which they produce should be fed into the federal department where it will be available to all interested in these affairs.
The department is relatively new and perhaps that is one reason the minister is having difficulty in recruiting the necessary personnel. It may be that young people must be made aware of the opportunities for careers with the department in this important, and I imagine, fascinating activity. But naturally it will take some time for them to become aware of this and for them to prepare themselves to take their place in such a research department. There is an increasing awareness that there must be a scientific approach to management and marketing in regard to forestry and forest products.
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I indicated I was just going to take a few minutes, and in conclusion let me once again wish the minister and the officials of his department every success in their endeavours to increase the usefulness of the department within the bounds of its constitutional possibilities.


Mr. Gauthier:: Mr. Chairman, I examined with interest the estimates of the Department of Forestry.
As we are newcomers in this committee, we realize that this department is not very large, as indicated by its budget, which is a little over $1,000,000 per province. However, at first glance, one can easily recognize the impressive work done by such a small department.
First of all, I must congratulate the minister and all his officials for having carried out this enormous task.
I note that this department was created only a few years ago, but it is fitting to say in this case that one does not have to be advanced in years to show one's mettle.
It is a matter of course that forestry matters come under provincial jurisdiction, but I hesitate to appeal to the federal government when it comes to provincial matters. Indeed, I always fear for provincial autonomy, because too frequently in the past the federal government has intruded gradually in some fields coming under provincial jurisdiction until it has almost taken them over.
On the other hand, we have to admit that the creation of such a department was essential, in order to give the provinces necessary leadership for the future in view of Canada's development. The local, and even the domestic market, are no longer sufficient. It is necessary to look to the international markets; this is why the federal government must step in and co-operate with the provinces so that we may be able to compete against other countries on those markets.
When the minister states that we have exported over $2 billion worth of forest products, this shows the efficiency of this essential federal-provincial agreement.
If there were not, under present conditions, an ever-increasing understanding between the provinces and the central government, the present flow of our forest products into foreign markets, would sink to the national or even local level. That is to say that our group unreservedly supports any effort the department is now making in the forestry field.
By multiplying those meetings we shall, as I mentioned earlier today, ultimately become known on the world market as merchants in tune with modern times. I shall mention here the work which should draw

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the department's particular attention, that is the reseeding of suitable woodland.
And here, I want to say a few words about my district-my constituency-because we are partly a farming area, but mostly a forest district. When we look at this expanse of land -where, 20 or 30 years ago, there were only forests, a hundred miles around, and where today there is only desert and waste land- we may wonder why it should be so. The answer is simple enough. People and gover-ments without foresight failed to look after the reseeding of our forests. Whether the woods were razed by lumberjacks or by fire-and more particularly in the latter case-
I would like the government to intervene and transform those wide plains again into forests which tomorrow will give food and work to our people.
Mr. Chairman, we are 30 years behind the times in the field of forestry. If, thirty years ago, we had taken the steps we are taking today, instead of having waste lands now where there used to be fine forests, we would have timber available and that product would play a role in our economy, that of supplying our paper mills. That goes to show that the seeding of land which now seems unproductive is of major importance for the forest industry.
Previous speakers have pointed out that something has been done through ARDA. That is a first step towards the recovery of our land because if ARDA is useful to agriculture, I think it should be used more extensively in the case of forests.
I should not want to imply that the federal government should impose its views on the provinces in the field of forestry. Far from it, but I feel that there should be closer cooperation and that seminars should be held, courses given and interprovincial conferences called more often to give a more efficient orientation to the seeding operations under ARDA. Since, as the hon. member for Kootenay West (Mr. Herridge) stated a while ago, costs are divided equally between the federal government and the provinces, I feel that the latter should take advantage of the offer made by Ottawa.
A few minutes ago, it was stated that the province of Quebec has a fine plan for the restoration and improvement of our forests which is already being put into practice. I must agree that the province has an excellent plan to that effect.
But when you visit the province of Quebec, you will notice that we will lag behind for a long time. This is the reason why, as I said earlier, the federal government should pursue its educational campaign, I do not mean its imperative action, but its educational action

and this in order to accelerate this promotional work in the forestry field in every province, especially in the province of Quebec.
I am convinced that with proper co-operation the province of Quebec will know how to use one of its most important resources without leaving those large expanses of treeless lands to grow wild.
We are now supposed to log 30 year old stands, but to find thick stands, we have to go hundreds of miles north, because we have neglected reforestation.
I would like to point out another aspect of the question, that is, the squandering of our forest resources. Thirty years ago-I am going back 30 years, because I am a little bit younger than the hon. member for Kootenay West-I myself cut down trees in the forest while attending high school. It was my holiday exercise; and every year I spent two months in the forest cutting down trees. It is an excellent exercise; I would advise our young university students to try it for themselves, having improved their minds, they will soon find out that such an exercise strengthens muscles and steadies nerves.
However, I must point out that there is a drawback. If you work in the forest during the summer, beware of mosquitoes of all kinds; close your eyes, protect your hands and your face, otherwise, after a little while you will be bleeding from numerous bites.
As I was saying, 30 years ago I worked in the forest, and during my holiday period I became an apprentice lumberjack. I saw woodsmen, as they were then called, bring down the forest tree by tree; however, they were very careful to spare young shoots, and our foremen never tired warning us not to damage them. When we had cleared the way in given areas of the forest, the young saplings were untouched, ready to grow and to allow a new cutting in ten, 11, 12 or 13 years at the most.
When I look at the cutting methods of today, and compare them to the methods of 30 years ago, I feel that in days gone by, people did not cut a forest, they harvested it. If you went into the woods today, you would soon see for yourselves what I mean. I went back myself last summer, and I must confess that I was confronted with a terrifying sight. Modern machinery has played havoc. First of all, where you had 300 or 400 workers, you only have 75 today, because machines do everything, sweep away everything. For one spruce tree cut down, 25 are destroyed.
Government officials do not seem to be aware of that slaughter, either because they do not go themselves in the field to see the

damage, or because the ministers or the deputy ministers do not go into the forest often enough to see for themselves this terrible havoc.
Nowadays, as far as pulpwood is concerned, they have got to a point where they cut that wood in 8 foot lengths to make what is normally called the end tod. Can you figure all the waste. To get some wood, they waste two thirds of the forest in order to get one third.
I draw this fact to the attention of the house because I know the minister is not aware of it. You smile, but that is because you are city dwellers. But we are now talking about forestry, a field about which you know nothing, you city people.
I am sure the minister will have constructive suggestions to make in that field because it is a national misdeed, from a forestry point of view.
If you go through a forest where the trees were cut down, you see there is nothing left because the spruce are cut down and then hauled out of the woods, pulling out all the young growth, so there is nothing left.
If something was done about it, if only a new seeding was done, but no, everything is left as it is, with the result that what is growing up now is only second, third and even fourth class wood, while really productive wood is choked under and finally dies among all that mess.
We might have a forest in seven, eight or ten years, but it will be a third class forest.
That is why I wanted to bring those conditions to the minister's attention and to denounce this misdeed. It has been denounced to the provincial government, but what is happening today?
Timber limits have been granted to all sorts of strangers to our economy. Foreign companies came here to get the raw product and went away with the best in our economy. That was all they were interested in.
Mr. Chairman, we have recently read in the press that the Catholic farmers' union in Quebec which means the Quebec farmers, was launching a campaign for the rehabilitation of our forests. There is a reason for this, because those people are responsible people. They want to reconquer our forest in order to put it back in operation, and take it away from those who were destroying and abandoning it.
As I say a forest is a crop. If nobody cares to make it reproduce itself, it will create wasteland, and that is what has been happening for the last 30 years, because forest operations have been made too easy in our district.
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Indeed, Mr. Chairman, all kinds of rights were granted. People went into the woods without bothering about anything. Money was easy to earn and the crop easy to harvest. Workers left everything behind them, even their land, to go into the lumber industry. Today, we find our farming industry cut down by 50 per cent, while the forest has been destroyed forever in a proportion of 75 per cent. That is why we have to start again practically from scratch as regards forestry, as we have to start from 60 per cent in the agricultural field. Those are the benefits of industrialization in our area.
Mr. Chairman, I am not blaming only the large or small industries, but almost everybody and everything, and more particularly the lack of education. Indeed, what is most important is to educate each operator and each worker who would work at that crop.
In the past, the operations destroyed everything, with the blessing of the various governments, and today, the few dollars that were saved have been paid in taxes. As for the operators, they went back across the border with all our profits and our money.
Therefore, it is through education that we shall succeed in taking the first step which will enable us, first, to save our forests and then, indirectly, to assist our agriculture.
That is why we must have a joint federal-provincial forest policy, to help the provinces in all their forest research, as well as in the protection and development of our forests which, with agriculture, remain one of our two greatest natural resources.
Mr. Chairman, I do not wish to go on any further, but I wanted to make those two points in the presence of the minister.
I am sure that the Minister of Forestry will take due note of my remarks, because they are based on the limited experience I acquired both in forestry and in farming. The minister can be assured that I expressed my views most sincerely in order that my suggestions may benefit not only my area, but also my province and the whole country. [Text]


Mr. Granger:: Mr. Chairman, first of all I should like to congratulate the minister on the occasion of his first presentation of the estimates of his department. I welcome the opportunity to join briefly in this debate, because forestry is one of the great industries of the province from which I come and of the district I have the honour to represent. Grand Falls, in the southern part of my riding, has some great pulp and paper mills which have led to a high degree of industrialization in central Newfoundland. They have been directly responsible for the employment of many people and the production of products which

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bring us many millions of dollars. Further north, in Labrador, there is one of the great forests not only of eastern Canada but of North America, perhaps one of the greatest forests in the world.
This summer the Minister of Forestry visited Newfoundland. I was fortunate to be able to be with him in Grand Falls, Gander and the Goose Bay area. After watching him and the officials with him, both from his department and from the provincial department of resources, I came to the conclusion that we had a minister who knew the woods and the trees and could see both, and that the officials who were with him from Ottawa and St. John's were men of high ability and deep dedication. It was my pleasure to accompany the minister as we flew up the valleys of the Goose river and Hamilton river, where he saw for himself, as I have said, perhaps one of the greatest stands of timber in the world. I know of his interest in the woods industry and in timber, and that he and his officials will do their best in this new department, which is so important to Canada's greatest industry.
I listened with much pleasure and interest to the speakers who followed the minister, as they covered the industry on a national scale. I feel that all members of this committee are deeply interested in this great industry and that the good will of all go to the Minister of Forestry as he endeavours to promote, both at home and abroad, an industry which means so much to so many thousands of Canadians.
I would ask, speaking now provincially and perhaps locally, that he bear in mind the particular problems in the district I represent. One of the great problems we face in Newfoundland is the development of Labrador timber, where a short shipping season heretofore has discouraged the development of these huge forests. However, perhaps the introduction of these huge new barges which we produce on the west coast, and the lengthening of the shipping season through the judicious use of icebreakers in Hamilton inlet, may together bring forward this development which is bound to take place. If the new Minister of Forestry and his officials can hasten this development they will have done a great service not only to the province of Newfoundland and to Labrador, but to all Canadians, who would benefit from the trade which would result.
There are very good reasons other than the general economic ones why such a development in Labrador is desirable. I think it may be said that most of the population of the Goose Bay area depend upon the defence installations there for their livelihood. Although

there is no indication at present that these bases are to close, or anything like that, it is wise to look ahead and consider possible alternative employment should the need arise. The proximity to Goose Bay of these huge forest reserves must make all of us realize the desirability of preparing for development there. This may become desirable for the sake of economic growth generally and, in particular, for the sake of the people who live in this area. The province, also, would benefit because there is no doubt the development of the timber industry in this area would lead to a significant increase in the production of pulp and paper in Newfoundland.
With these few remarks I will cease, once again wishing the minister and those who work with him well, as they seek to serve Canada by improving its greatest industry.


Mr. Kennedy:: I should like to hail the minister as a former maritimer. As one who grew up among the trees in Nova Scotia, I know that once having been a maritimer he will always be a maritimer at heart. I have a series of questions to direct to the hon. gentleman concerning the application of sales tax on machinery used for production, and on lumber. I hope my questions will not embarrass the minister. I have no doubt he has heard something about the subject from the lumber industry, as have most of us. This tax will, in time, increase the cost of production and I atm wondering what effect it is likely to have, in the minister's view, on competition with other building products. What effect will it have on our exports of lumber? Will it cause some diversion of demand from wood products to other building materials? Also, what effect is the tax likely to have on the small operator whose administrative ability to handle this new tax is limited? I should be glad if at any time while the estimates are before the committee the minister would be good enough to answer these questions and make some comments on this subject.


John Robert (Jack) Nicholson: Perhaps before replying to the other hon. members who have spoken in the debate I could answer the particular questions put by the hon. member for Colchester-Hants. The simple answer to his question is that the other competitive building materials are paying the same tax, so the reimposition of this 11 per cent sales tax has left the forest products at no disadvantage from a competitive point of view.


Cyril Frost Kennedy: I realize that, but the other building materials were taxed before. This is new to the lumber industry.


John Robert (Jack) Nicholson: The 11 per cent applies to all building materials. It had been removed

from certain building materials and is now reimposed; so, in this sense, competition still exists. But I think there is something which the hon. member should keep in mind. When there is a need to get more money to help balance the budget or at least, to move in that direction, the first thing to do is, of course, to look at the possibility of increasing taxation. But I am sure the hon. member would agree that it would be difficult to increase taxation in areas where profits are likely to be made out of the new municipal loan fund, out of the extension of the Central Mortgage and Housing Corporation benefits and so on, without removing the exemption. If there is any industry which is going to make a profit out of the new funds which are being put into circulation, it is the manufacture of building materials. If the industry is to get that profit then, surely, it is reasonable that the tax handicap under which the other industries operate should be shared. They are all paying this 11 per cent. It is not reasonable that one would reimpose this 11 per cent tax before seeking any general increase in taxation levels.
I may say that, having been associated with the forest industry, it is not surprising that
I	received a large number of telegrams and letters on this subject from firms in all parts of Canada, but primarily in British Columbia. I thought the best way to answer them was to go west and sit around a table with those who were complaining. I agree that one particular group, the manufacturers of prefabricated houses, did have a justifiable complaint, because in that case there seemed to be some duplication of taxation. I endeavoured to correct that situation, and it was corrected.
I would also ask the hon. member to bear in mind that 70 per cent of our forest products are exported. In relation to this percentage of our products which are sent abroad, the exporters enjoy the benefit of the devalued dollar. It seems to me that if there is any segment of the Canadian economy which cannot complain about the reimposition of the
II	per cent tax it is the manufacturers of forest products. I have told them so and I say, in all fairness that they seem to agree, at least so far as the west is concerned. Of course, the 70 per cent of the forest products which is exported includes pulp and paper products but also includes large exports of lumber, from British Columbia. A number of the people there finally, did acknowledge that they were not as badly off as they had thought they were and that it made more sense to reimpose this tax than it would have done to impose higher taxation generally. I do not wish to enter upon a detailed discussion of the budget or any aspects of the budget during the discussion of these estimates, but I have
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tried to answer hon. members' questions as frankly as I can. I do not think there is anything further I can usefully add to what I have said.


Mr. Cardiff:: I rise only to ask the minister a question to which he, or one of the officials of his department may have an answer. Disease has got into our soft elms in our part of the country. I do not know whether it has spread throughout other parts of Canada or not. It affects a large number of our elm trees, not only those growing in the swamps but those growing along the roadside and in the fields. However, these last named are not affected to the same extent as the trees in the swamps. It seems to be a worm working under the bark. I do not know whether anything can be done to control it or whether any attempt has been made to find a cure, but it seems that eventually this disease will ruin all the soft elms. This has been going on for the last few years and it is getting worse instead of better.


John Robert (Jack) Nicholson: I take it the problem to which the hon. member is referring is what is known as Dutch elm disease. This is a fungus which gets under the bark of the tree. We have had this problem in Canada for nearly 20 years. It came from the United States, beginning in Wisconsin and working its way east.
Shade trees are not normally a problem for the federal Department of Forestry. They are usually planted by municipalities and therefore are the responsibility of the provinces. However, the federal government research stafE has done a great deal of work on this problem. It is one of the particular responsibilities assigned to our forest research laboratory in Quebec. Unfortunately we have not yet discovered a cure for this disease. However-and I gave the house this information some weeks ago in answer to a question -the hon. member will be glad to hear that we feel we may have developed a species of elm which is resistant to the disease. Of course, only time will tell, but we are encouraged by the results which have come out of our research laboratory in Quebec.


Mr. Fleming (Okanagan-Revelsloke):: I
should like, first of all, to express my congratulations to the minister on his appointment, and to wish him at least a reasonably smooth passage in piloting his estimates through the committee on this first occasion.
As those of us who were members of the mines, forests and waters committee in 1959 will recall, the minister, as president of the British Columbia forests industries council, took an active part in preparing and making the presentation on behalf of the industry in British Columbia. Out of the statement

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made to that committee came the recommendation which led to the creation of the Department of Forestry. At that time we had the active co-operation of the hon. member for Qu'Appelle who was then minister of northern affairs and national resources, and we were encouraged in that committee, as I am sure the minister will recall, by the then minister to delve into every aspect of the forest industry in Canada in order that the committee might see if it could not bring back to the house recommendations that would be of value to the future growth and prosperity of Canada's greatest industry. It is encouraging that the government has selected as Minister of Forestry, one of its number who took an active part in making the presentation on behalf of the British Columbia industry at that time. However, I think it is only fair that I should couple my congratulations with a warning to the minister.
He made a speech in Williams Lake very recently in which he referred to the widespread enthusiastic and non-partisan support for the establishment of the Department of Forestry. I know he was not in the House of Commons at that time but I know that outside the house his support was enthusiastic.
However, if he will go back to Hansard for that period in 1960 when the department was created and consult the speeches of the member who is now Minister of Justice, and the speeches of the member who is now Prime Minister, he will find there something less than enthusiasm for the Department of Forestry. They did not oppose it; but then, again, they did not altogether support it. As a matter of fact, he will find that the present Minister of Justice said in one of his opening statements that he was neither opposing nor supporting it, but the one thing about which they were very firm was that there should not be a separate minister. Therefore it is somewhat reassuring to those of us who disagreed that we find the hon. gentleman in the position he now holds. I can only suggest that in his associations with his cabinet colleagues he should retain a certain vigilance for selfpreservation, because they opposed the appointment of a separate minister of forestry.
The minister has just made a very interesting defence of the 11 per cent sales tax on building materials. The defence did not extend, because the question was not asked, to the inclusion of production machinery, which was also covered by the imposition of the tax. If the minister will cast his mind back to the submissions of the forest industry in 1959, particularly the submission from the British Columbia industry, he will recall that a section of that submission contained an appeal for tax relief, for tax incentives for the industry.

The former administration responded to that appeal by exempting two thirds of the logging tax in the provinces of British Columbia and Ontario. There was a rebate given on the logging tax in two of the provinces. The 11 per cent sales tax on building materials did not exist; the exemption on production machinery existed and certain extensions for the logging industry were introduced in 1959, particularly with regard to fuel oil for the production of power and diesel oil used by the logging trucks.
When the industry came to Ottawa it was not looking for an equalization of taxation. They did not want an 11 per cent tax tacked on which would be balanced out by the 7J per cent discount on the Canadian dollar in the export market, or the advantage they had because of the discount. As I recall the submissions of the British Columbia forest industry at that time, they were not looking simply for the retention of the status quo. They did not want something given with one hand and taken away with the other. They said that the industry, in order to develop and expand its export markets must have an advantage and must not be left in the same position as it was before as the result of two government actions.
Therefore I do not believe that the minister's argument stands up. You cannot add on an 11 per cent tax and then say that is compensated for by the discount on the dollar because there is a 3 per cent advantage. I recall that the British Columbia forest industry was not interested at that time in a 3 per cent advantage. They felt they needed more in order to improve their competitive position in the export markets which are so vital to them.
With regard to production machinery, the minister is undoubtedly aware of the plans for the development of the interior of British Columbia and the projected pulp mill developments at Prince George and Kamloops. The 11 per cent sales tax on production machinery has added to the capital cost of these developments. It means that the people who are investing their money in this type of development are going to have to find more money. They will have to pass on their additional capitalization costs in the cost of their product, and they claim to be in a tough competitive world and to need every advantage they can get.
I know that the minister is not responsible for this action, but I do think that what it highlights is that it is absolutely essential that the Minister of Forestry must consult, as I am sure the present minister will, with the Minister of Finance very closely to consider the effect of taxation policy on our greatest

industry. I do not think that sufficient consideration has been given to this aspect. I read the release from the minister's department on the recent conference with the provincial ministers of forestry. In the minister's own statement tonight and in that release a very substantial emphasis was placed on the value of research in all fields, product research, entomological research, forest biological research and so on. Nobody is going to deny the essential importance of all this work. No one in the house would challenge for a moment the importance of this work. But in any such conference I think there should also be consideration of taxation policies at all levels of government as they relate to the forest industry. This is fundamental. I have no doubt that informal discussions have taken place, perhaps between the federal government and a single province in an informal manner over the years.
I recall that taxation policy did enter into the discussions of the mines, forests and waters committee in 1959. This is an important area. I do not think any government should impose taxes in the form in which they were imposed by the budget in June because they are bound to have a direct effect on the one industry in Canada which in all its various phases employs more Canadians than any other single industry.
It is essential that taxation policy must take into account the special requirements of an industry which not only is so essential to us in our domestic development, for example, in the field of construction, but is so important to us in the export field. Even now there does not appear to be sufficient awareness of this necessity.
There is one other field to which I feel sure the minister will be devoting a great deal of attention. I imagine that the department has already considered the matter in some detail and depth. The minister mentioned in one of the departmental releases the question of forest fire protection. In one of his speeches he also mentioned one officer who is apparently doing a gargantuan task in British Columbia, because he is one man trying to cover the whole province. I wonder how much thinking has gone on with regard to the establishment of a national force to supplement provincial forces in times of grave emergency.
Despite the fact that the ten year average of acreage burned in forest fires is approximately 2,700,000, we know from the publication of the dominion fire commissioner that in 1961 there were 9,300,000 acres burned, an increase of almost 400 per cent in that year. We are all very conscious of the dreadful problems that confronted the province of
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Newfoundland and also the problems of British Columbia in this regard two years or more ago. On such occasions the federal government, if requested, normally send in units of the army but these units of the army are not specially trained for this purpose. As the minister well knows, firefighting is not only a hazardous occupation but it is one in which the firefighter, if he is to be effective, must have skilled direction. He must have had training and the opportunity to have learned how to survive while fighting forest fires. Dead firefighters are not effective. The dangers are very great. The inexperienced can do little good. We know that at the time of the Newfoundland fire the forest officers in national parks had to be diverted from their work and sent to Newfoundland to provide their skilled services.
If it is not economically feasible at this time to develop a separate force, then I hope that within the armed services we can have units of the army trained in fighting fires, so that a corps of trained men can be available, ready to be sent to fight fires and play a more effective role, with their safety better guaranteed, and less risk of endangering lives needlessly.
I have been somewhat critical of the government's policy, but I hope the minister realizes this is not in any personal sense. I do feel that some decisions which have been taken, particularly in the field of taxation with respect to the forest industry, deserve reconsideration. I say this because if the problems that the industry advanced to a committee of this house in 1959 were as real and as urgent then as the industry claimed, I cannot believe all these problems suddenly disappeared in the course of four years. In fact it seems to me there is a necessity for a continued program of special tax legislation geared to meet the requirements of the forest industry.


[Stage Direction]
Item agreed to.
10. Grant to Canadian forestry association, $25,000.
Francis Alvin George Hamilton: There is one question I would like to ask the minister on the basis of the item we have before us. If one looks at these tables carefully he will find that in almost all these votes a number of personnel have received certain salary adjustments. Was this because of classification or because of salary increases?


John Robert (Jack) Nicholson: Salary increases. They were not substantial.


[Stage Direction]
Item agreed to.
Herman Maxwell Batten: This completes the
estimates of the Department of Forestry.

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John Robert (Jack) Nicholson: I had contemplated making some remarks in reply to constructive suggestions put forward by members in all parts of the house. I wish to say thanks to all the speakers. I appreciate their suggestions greatly, as well as their good wishes and congratulations.
I should have said earlier that the federal-provincial forestry conference which took place on October 21 and 22, to which reference was made by two or three speakers tonight, was in my humble opinion, and in the opinion of the 10 provincial ministers who attended, a highly successful affair.
It was the first one of its kind, and to answer a question put by the hon. member for Qu'Appelle, they suggested that meetings be held at least once a year. ARDA, among other matters, was discussed at some length, and has general support, particularly in the provinces of New Brunswick, Quebec and Ontario.
There was also general agreement that on the whole the federal-provincial forestry agreements which have been in effect for the past 12 years have been successful. The ministers did plead for greater flexibility because of the different topographic and geographic conditions that exist in the east, and which differ from those in the west. More planes may be needed in a province like British Columbia, and more access roads in Ontario and Quebec, where the terrain is entirely different. There was unanimity on the general merits of these agreements.
There was also unanimity on the submission that there should be greater research, and there was assurance of full co-operation among all 10 provinces. One could not have asked for a better atmosphere or for more co-operation. Of course there were a few disagreements, and that is why the meeting was held in camera. It was closed to the press. Some hon. members have commented that they did not see any publicity about it. A press release was issued on the second night of the conference, and there was a press conference; but as hon. members will recall, we had some competition that day. It was the day the S.I.U. visited parliament hill, and they, rather than the 11 ministers of forestry drew most of the members of the press.


Francis Alvin George Hamilton: Was there any discussion at this conference about the relative merits of putting federal money into the provincial agreements, as opposed to expanding the research services?


John Robert (Jack) Nicholson: No, they wanted more money for both, but I was not in a position to commit myself. I told them their views would be taken into consideration and placed before my colleagues in the government.
[The Deputy Chairman.]
One other matter to which perhaps I should have referred earlier was raised by the hon. member for Kootenay West, among others. He stressed the necessity of interesting the youth of Canada-of educating them in the importance of the forest industry. This is of the utmost importance. I cannot commend too highly the junior forest warden movements in certain provinces, particularly Ontario and British Columbia where they have had great success. There has also been work of a similar nature by 4-H clubs in Quebec, Manitoba and Saskatchewan, and I commend this work very highly.


Louis-Joseph Pigeon: Two years ago the provinces signed an agreement to build roads to forests, and I would like to know if the provinces, particularly Quebec, expressed their views about renewing this agreement?


John Robert (Jack) Nicholson: I can only refer to the press conference and the statement that was made on the subject. It was stated by the 10 ministers, including the minister from Quebec, that the federal-provincial agreements had on the whole been successful. The Quebec minister agreed that these agreements, which cover not only access roads but forest inventory and reforestation, had been more or less satisfactory. He said that the province of Quebec was willing to consider renewal of the agreement on the same general basis as the other provinces, but he said there had been certain reservations made by the premier of Quebec with regard to federal-provincial agreements generally, and these would have to be the subject of further discussion with the federal government.


Louis-Joseph Pigeon: I asked the question because Mr. Arsenault, the former minister of forestry, was opposed to these joint progams.


Herman Maxwell Batten: Order. The committee of supply will now proceed to the estimates of the Department of Public Works.



DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
1. General administration including a grant of $2,000 to the Canadian good roads association, $10,695,000.
Herman Maxwell Batten: Shall vote No. 1 carry?


J.-H.-Théogène Ricard: Mr. Chairman, as I rise to speak on the estimates of the Department of Public Works, I wish first of all to congratulate the minister (Mr. Deschatelets) for the honour his leader has conferred upon him, by asking him to take the lead of one of the key departments.
However, I am saddened by the thought that the Prime Minister had some misgivings about the qualifications of the nominee, and about the time he might be ready and willing

to spend on matters coming under his jurisdiction. It is also a pity that the Prime Minister has seen fit to remove from the scope of that jurisdiction the administration of Central Mortgage and Housing Corporation. I would have liked us to remain faithful to tradition on that point. Things being what they are, I can only extend my heartfelt sympathy to the minister, who probably also feels some regret at seeing his powers and responsibilities thus whittled away.
Mr. Chairman, I thank the minister for the courtesy with which he has always listened to my suggestions about changes to be brought to inscriptions and signs on parliament hill, inside parliament itself and within various federal buildings. When I suggested replacing signs in one language only by signs written both in English and in French, the minister followed in the footsteps of his predecessors, who never failed to comply with my requests.
Actually, Mr. Chairman, it is not without a certain pride that I remind the house that when I came to Ottawa in 1957, as a member for the St. Hyacinthe-Bagot riding, most notices on doors and elsewhere on parliament hill, were written in one language only, that is to say in English.
At that time, I tried hard to make some recommendations which resulted in those bilingual notices that can now be seen almost everywhere, instead of unilingual ones.
Mr. Chairman, I wanted to mention the fact incidentally, because I think it is better to keep in the background while working and then succeed, than to make a lot of noise, as has been heard for the past couple of years, with only indifferent results.
Mr. Chairman, I also want to take this opportunity to pay tribute to the officials who assist the minister in his work. They are most understanding and have always given me a maximum of co-operation when I approached them with requests. Indeed, I know from my own experience that when reasonable requests are made to the Minister of Public Works or his officials, they are always quite ready to help and have only one object, that is to give the best possible service to the people.
And how could it be otherwise, when we consider that, since I have come to the house I succeeded in convincing the officials of that department that certain projects should be carried out in my riding, at a cost of $1,200,000? Mr. Chairman, I point out those facts without boasting and without excessive humility, whether it pleases my good friend from Joliette-L'Assomption-Montcalm (Mr. Pigeon) or not.
I think that without the co-operation of the present minister's predecessors and of the
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officials, I certainly would not have achieved such results.
In his introductory remarks on his estimates, the minister made a brief review of the situation he found in his department when he took over. He indicated that the estimates were prepared by his predecessor and he did not see the need for a detailed analysis of them. But we would have liked him to take a little more time and give us the reasons for the statement he made on October 18 last, as can be seen on page 3760 of Hansard where the minister stated:
However, we have slightly changed those estimates and to enable the house to get a better understanding of the various projects and amounts you are called upon to approve, I intend to give you some essential explanations and I will do it alternatively in French and in English.
Mr. Chairman, may I point out that I have read this statement of the minister several times, and it may be that I cannot read between the lines, but I find no justification the minister might have given for the cancelling some items or affecting additional amounts to other projects. In fact, the minister told us he had cancelled some $2.5 million, while he asked us to pass additional projects for some $6.3 million.
We would have liked the minister to tell us-and we were entitled to know-which projects he thought it was his duty to cancel and what additional projects he added, as well as the reasons justifying those cancellations or additions to the budgetary estimates for the current year.
I find it a little difficult to understand why the officials, after thinking out the plans of the previous administration, were not somewhat aggrieved at the decision of the minister to make such large cuts in the estimates they had prepared for the year 1962-63. Those officials are known for their broadmindedness and their impartiality as well as for their desire to serve the people, and surely until the time the present minister took over the department, those officials did their best in the preparation of their work.
Unless the minister gives us the reasons why he decided to make the changes, we are entitled to wonder on certain obscure points.
Mr. Chairman, as it is the first time that I address myself to the Minister of Public Works since he assumed his post, I shall avail myself of the opportunity to utter a few requests in order to improve the postal services in my constituency. Those requests will also tend to reduce unemployment which prevails in my constituency, for, as you know, Mr. Chairman, my constituency is not different from the others.

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Among all the provinces in this country, the province of Quebec unfortunately holds the sad record of having the greatest number of unemployed.
I trust that the minister, who, also, comes from the province of Quebec and wishes sincerely the good of its inhabitants, will not hesitate to give me his help and his cooperation in order that, together we may secure employment for the heads of families who surely need work to meet their responsibilities.
In order to reduce unemployment in my constituency, I suggest to the Minister of Public Works to build post offices in the villages of St. Denis sur Richelieu and St. Rosalie, in Bagot county, St. Damase, in St. Hyacinthe county, and in Upton, in Bagot county. Those four places are big enough and important enough, it seems to me, to have their own post offices. In so doing, the minister would certainly enhance the pride of the citizens of those municipalities. In any village or rural community, people are always proud to say: we are important enough to have our federal building. That is why I am asking for the minister's support in this field.
I have another suggestion to make to the minister. It has to do with giving a slightly more bilingual appearance to the uniforms worn by messengers and persons who run elevators one comes across in the parliament buildings. As a matter of fact, I sent a letter to the minister to this effect.
At the present time, if you look at those uniforms, you only see three letters, "D.P.W.", which stand for "Department of Public Works".
I should like to see the practice which is applied to the uniforms worn by the parliament buildings' constables also adopted in the case of those employees of the Department of Public Works, that is to say, place on one side or on one shoulder, for instance, the letters D.P.W. and, on the other one, the letters M.T.P. to identify employees of the Department of Public Works. That is a suggestion I offer to the minister, and since we know he also wants to do his share in the field of bilingualism, he will surely not miss an opportunity to follow that suggestion.
And now, Mr. Chairman, I must, much to my regret but it is imperative, come to another matter which will probably not please so much the Minister of Public Works. It is about patronage that I want to talk to the minister for a few moments.


Mr. Caron:: That is a fine matter.


J.-H.-Théogène Ricard: According to the information in my possession, it has been decided lately to increase from $5,000 to $15,000 the amount

of contracts awarded on invitation only. I would be happy to learn from the minister whether this information is true and if it is, could he tell me who supplies the list of tenderers for such work.
Moreover,' I wonder if the minister could tell us who is responsible for supplying the names of persons who could become inspectors on the building site of sustaining walls. And before going further, may I remind the minister that I sent him two letters recommending some persons who could act as inspectors on these building sites.
The people I recommended are qualified and they have a vast experience in that field, having already held the position of inspectors for several years, in addition to their experience they have earned a reputation for impartiality. Unfortunately, and to my great surprise, I have learned that people other than those I recommended were chosen to supervise the construction of the retaining walls in St. Denis sur Richelieu and St. Charles sur Richelieu.


Mr. Drouin:: May I ask the hon. member
a question?


J.-H.-Théogène Ricard: Certainly, but when I have completed my remarks which will only take me a few minutes more.
I should like very much to know why the people I recommended were not hired and from whom did the Minister of Public Works get the names of the people concerned.
Maybe he could also tell me what is the part played by my opponent in the last general election, Mr. Jean Leduc of Ste. Pie. According to the information I have, the property purchased by the Department of Public Works as a possible site for the penitentiary that was to be built in Ste. Pie, was the scene of a dramatic sale of hay last summer. I am informed that Mr. Leduc was the person authorized to conduct the sale of hay. Since this individual was defeated in the last general election, it is very strange that he should carry out a duty which, in my opinion, should belong to the representative elected by the people. I should like to know very much who gave him this authority and who recommended him as such.
Could it be that there is a list of consultants as there is in the Post Office Department where I saw the name of Mr. Leduc?
Actually, I would not be surprised if his name should appear on another list, and it is for this reason that I would like the Minister of Public Works to confirm or deny my statements.


Louis-Joseph Pigeon: It is likely the same list.


J.-H.-Théogène Ricard: Mr. Chairman, the minister is aware that a penitentiary was to be erected

in my riding, more specifically in the parish of St. Pie de Bagot. I can only mention the matter this evening, since I will have an opportunity later on to discuss it when we examine the various estimates of the department.
As I have not as yet succeeded in securing a satisfactory reply from the Department of Justice, I would appreciate it if the Minister of Public Works, who is undoubtedly aware of the situation, since it is his department which acquired the land, would supply me with certain information.
For instance, what use will be made of that land which was purchased at the price of $83,000? What are the reasons which motivated the transfer of the proposed penitentiary to another riding?
I feel that the question concerns the minister since the construction of penitentiaries comes under his department.
In view of the fact that I have been unable to get a satisfactory reply from the Minister of Justice (Mr. Chevrier), I hope the Minister of Public Works will be more co-operative than his colleague and provide me with all the information I am entitled to since it would be interesting to know why, after last April 8, it was suddenly decided to give up the proposed construction of a penitentiary at St. Pie de Bagot.
Mr. Chairman, I have here some documents which prove without question and according to the plans of the Departments of Justice and Public Works, since there is a double jurisdiction in the matter, that the work should normally be under way. Why has it not started? I was unable to find out up to now, and I ask the minister to tell me.
With further reference to the selection of inspectors and to their duties, I would like the minister to tell me also whether the inspector who represents the federal government on the building site of a retaining wall must remain on the spot or whether he may stay away and, in that case, for how long during the day. I am asking the minister whether an inspector may leave his job and meet at the same time the requirements of the Department of Public Works.
If I seek that information, it is in the interest of the Department of Public Works and of the general public. In fact, I would say that in order to do his work properly, a supervisor should be on the site all day long and not only part of the time.
The answers to those few questions will put me straight and enable me, at the same time, to relay information to those who ask me for it, because I make it a point to keep the minister aware of the way the work is proceeding with regard to the erection of the 28902-5-277
Business of the House
retaining walls. Those are all questions that people are asking themselves.
I would not want to offend the minister but I must tell him that patronage is being practiced on a large scale and that probably he would not put up with it if he really wanted to stop it. However, I feel duty bound to tell him. A lot of patronage is going on now with regard to the work at St. Charles and at St. Denis sur Richelieu. I would not want to stir up memories, but-


Vincent Drouin: I understand why-


Jean-Paul Deschatelets: May I ask a question of my hon. friend?
He just mentioned the work under way concerning the sustaining walls. The hon. member asserted that some sort of patronage was taking place. I would like to have more details in order to be able to reply adequately. I do not suppose my hon. friend would make such assertions without knowing certain facts. I ask him then to give me a few facts.


J.-H.-Théogène Ricard: Mr. Chairman, I would have preferred not to mention that. I merely wanted to warn the minister in private. But since he raises the question, I have no alternative but to justify my allegations.
I will refer to letters which I wrote to him under date of June 24, concerning the appointment of inspectors. I recommended three persons for St. Denis and St. Charles, but none of them was hired. Those who were hired as inspectors had been recommended by Liberal organizers in both the above-mentioned villages. This is one example, Mr. Chairman. If you want more I could state others because, in my opinion, one can achieve the same purpose without bringing up the past.


Prosper Boulanger: Mr. Chairman, before
starting my remarks I should like to congratulate the Minister of Public Works on his appointment to this department.
Mr. Chairman, may I call it 10.30?

Item stands.
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: In the absence of the leader of the house I think I can get a short answer tonight. My question is simply this. Will the business for Monday and Tuesday stand as already announced?


John Watson MacNaught: Yes, Mr. Speaker.


[Stage Direction]
It being thirty minutes after ten o'clock the house adjourned, without question put.
[Stage Direction]
Supply-Items Passed
The following items were passed in committee of supply this day:

[Stage Direction]
1. Departmental administration including $24,000 for grants in aid of forestry research, $1,060,700.
5. Contributions to the provinces, pursuant to agreements entered into with the approval of the Governor in Council, in respect of forest inventories, reforestation, forest fire protection, forest access road construction and stand improvement, $7,910,000.
10. Grant to Canadian forestry association, $25,000.
11a. Contribution to the province of New Brunswick for assistance in a program designed to combat the spruce budworm infestation, in accordance
with an agreement between Canada and the province, $170,000.
Forest research branch-*
15. Operation and maintenance, $1,979,200.
20. Construction	or	acquisition	of	buildings,
works, land and equipment, $234,000.
Forest entomology and pathology branch-
25. Operation and maintenance, $3,433,200.
30. Construction	or	acquisition	of	buildings,
works, land and equipment, $813,300.
30a. Construction or acquisition of buildings, works, land and equipment, $941,200.
Forest products research branch-
35. Operation and maintenance, $1,147,400.
40. Construction	or	acquisition	of	buildings,
works, land and equipment, $80,400.
[Stage Direction]
Monday, November 4, 1963