1963-06-11

Mr. Grant Deachman (Vancouver Quadra):: Mr. Speaker, on a question of privilege, I received in my mail yesterday, too late to bring to the attention of this house, an envelope bearing the frank "W.D.H., M.P." In this envelope there was no letter from a member of the House of Commons, but a press release and communication from Mr. George North, who is the editor of The Fisherman, a weekly newspaper published in Vancouver for fishermen and known by everyone in Vancouver to be a communist slanted paper. In the accompanying note he says to me:
Dear Mr. Deachman:
Thought you might be interested in the accompanying statement issued June 7 in regard to Norpac treaty negotiations.
With that he enclosed his press release, which has some pretty disparaging things to say about the Minister of Fisheries (Mr. Robichaud) and those associated with him. I will quote from it briefly:
Only a man who is deaf-
He refers here to the Minister of Fisheries:
-dumb and blind could have failed to realize that this was no threat but a logical move on the part of the Japanese to take advantage of the weak kneed-
He spells that "need":
-unprincipled approach to these problems displayed by the Canadian government, its fisheries department and its hand picked puppets.
Then he goes on a little later to say:
He can either continue to evade and dodge the facts of life and mislead the people of Canada whom he professes to represent and supinely knuckle down to the U.S. state department or he can stand up for the fishermen-
My question of privilege is this. Can a member of the House of Commons give the stationery of the House of Commons and his frank to someone outside the house for the purpose of disseminating material of this kind, without any accompanying note, explanation or covering memorandum from that member?


Some hon. Members:: Shame.


Mr. Robichaud:: Red propaganda.


Mr. Speaker:: Hon. members will of course realize that this is a very interesting point of privilege, but if the hon. member wished to take action he would have to move a motion. There is no motion before the house; therefore, unless the hon. member wishes to take further action, the matter is in effect closed.


Grant Deachman: I move no action against the hon. member.


Mr. Speaker:: I beg the hon. member's pardon?


Grant Deachman: I move no action against the hon. member.


Mr. William Dean Howe (Hamilton South):: Mr. Speaker, I rise on a question of privilege. When the house convened at 2.30 this afternoon and before I was in my seat the hon. member for Vancouver Quadra raised a question of privilege. I understand the hon. member asserted that he received through the mail certain material to which he made reference and that the envelope had on it my frank which was apparently rubber stamped. If it is correct that my frank rubber stamp was used, I wish to stage categorically that this was done without the knowledge of my staff or myself, without my permission and apparently on a day when I was absent from Ottawa. The suggestion made by the hon. member that I had anything to do with the mailing of the material in question is completely without foundation. If he had not raised this matter I would not have known that it had happened.



MR. OLSON    REFERENCE TO ANSWER TO QUESTION ON ORDER PAPER

Mr. H. A. Olson (Medicine Hal):: Mr. Speaker, I rise on a question of privilege, which arises out of an answer that I received from the parliamentary secretary to the Minister of Labour on June 3. On that date the parliamentary secretary answered a question I had on the order paper, and I should like to read both the question and the reply so that you, sir, together with other hon. members, will be able to understand the question of privilege I am raising. They are as follows:
Has representation been received from any of the provinces to extend the 75 per cent rate of

Question of Privilege
reimbursement to the provinces with respect to approved capital costs for building and equipment purchased within the agreement of federal-provincial technical and vocational training schools?
The answer given was "Yes".
The third part of the same question is as follows:
Is the government considering increasing the federal share of cost of operation in the vocational training section of these schools?
The answer given to me, Mr. Speaker, was "No". Yesterday the Minister of Labour in his statement to the house had this to say:
In order to step up the training of unemployed workers of all ages the government will introduce an amendment to the Technical and Vocational Training Assistance Act to increase the contribution to the provinces of the cost of provincial training allowances to unemployed persons from 75 per cent to 90 per cent.
A second point in the statement the minister made yesterday was to the effect that the government intended to increase from 50 per cent to 75 per cent the federal contribution to the cost of retraining employed workers.
I do not question the right of a minister or a parliamentary secretary to say, for example, that a question is under review, or that it is under active review, or that the government will announce its policy in due course. I would suggest, however, that an unqualified "no" in these circumstances is not reliable, and that either the parliamentary secretary did not communicate with the Minister of Labour or else he gave me a false answer. As I have said, I do not contend that any minister has to give an immediate reply to a question, but I do not believe he should give a wrong answer. So I am suggesting that the Minister of Labour should get together with his parliamentary secretary before answers are given to these questions.
I am not interested in whether or not the parliamentary secretary wishes to apologize for having given me this wrong answer, but I do think we should have an assurance from him that the answers he does give to these questions are to be relied on.


Hon. A. J. MacEachen (Minister of Labour):: The answers which were given by the parliamentary secretary were seen by myself and approved. Therefore, I certainly want to take upon myself any responsibility attaching to the answer given to the hon. member. Unfortunately, as he developed his question of privilege the hon. gentleman did not refer to the particular question he had in mind, so I was not able to follow him. I shall be glad to compare the answers given to his question with the statement which was made yesterday, and it may be that the apparent contradiction which the hon. member feels

exists will disappear on further examination. However, I shall be glad to look at this and deal with it tomorrow.


Horace Andrew (Bud) Olson: For the minister's information, it is question 120 appearing on page 564 of Hansard for June 3. I am prepared to accept his undertaking to give us an explanation.



THE BUDGET


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, today I have tabled copies in English and in French of the annual budget papers. For the convenience of our members as well as of subscribers to the reports of the house I move that the budget papers be published as an appendix to the day's Votes and Proceedings and also as an appendix to the Hansard report of Thursday, June 13.


Mr. Speaker:: Is it agreed that the Minister of Finance may have leave to table these papers?


Some hon. Members:: Agreed.



DOMINION-PROVINCIAL RELATIONS INQUIRY AS TO CONFERENCE RESPECTING FORTHCOMING LEGISLATION

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, in connection with the municipal loan fund bill and like legislation in which there is an invasion of provincial jurisdiction in any way, may I ask when it is the intention of the government to hold a conference as between the federal and provincial governments in order to ascertain the views of the provinces with regard to this legislation and other legislation of a similar kind?
Right' Hon. L. B. Pearson (Prime Minister):
Mr. Speaker, the right hon. gentleman began his question by assuming that the legislation to which he made reference was an invasion of provincial jurisdiction. Mr. Speaker, there is no such invasion in this legislation or any other legislation we have brought forward; therefore the rest of his question does not apply.


John George Diefenbaker: Mr. Speaker, in so far as this legislation is concerned the consent of the provinces is required before any assistance is given to any of the municipalities, as I read the resolution and as the Prime Minister himself said when he gave the first view of this legislation to the association of mayors and municipalities. I ask him, in view of the fact that the consent of the

provinces will be required, is it the intention of the government to have a conference on this question?


Mr. Pearson:: Mr. Speaker, the first view of this legislation was not given to any association outside the house, and I suggest that the right hon. gentleman wait until the bill is brought down, when he will see that the terms of the legislation justify what I have just said.


John George Diefenbaker: Mr. Speaker, I am not asking subsidiary questions. What I am asking is, is it the intention of the government to convene a conference with the provinces with regard to this question?


Lester Bowles Pearson: I have already informed the house that it is the intention of the government to convene a conference with the provinces at an early date.


John George Diefenbaker: Then why so long for an answer?


Mr. Erik Nielsen (Yukon):: Mr. Speaker, my question is for the Prime Minister and concerns the federal-provincial conference which he informed the right hon. Leader of the Opposition would be called in respect to municipal loan fund legislation. Has the Prime Minister ensured that the governments of the Yukon and Northwest Territories have been invited to participate in such a conference; and if not, will he do so?


Lester Bowles Pearson: Mr. Speaker, the hon. gentleman's premises are wrong. I told the right hon. Leader of the Opposition that there would be a dominion-provincial conference before long. I did not say that it would be specifically called for this municipal purpose at all. Naturally the territories would be consulted in all appropriate questions before a conference of this kind.
(Translation):



REPORTED CHANGE IN SYSTEM OF EQUALIZATION PAYMENTS

[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolietle-l'Assompiion-Montcalm):: Mr. Speaker, I should like to direct a question to the Prime Minister. Does the Prime Minister intend to change the present equalization system as promised by the Minister of Justice (Mr. Chevrier) in Three Rivers on June 15, 1962?
(Text):


Lester Bowles Pearson: Mr. Speaker, I cannot accept the premises of the question, which are over a year old. The Minister of Justice did not make the statement, so certainly no answer is required from me.
Inquiries of the Ministry LABOUR CONDITIONS



PARLIAMENT HILL


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I want to address a question to the Minister of Labour. My question is based on incredible happenings on parliament hill at this time. I never thought, Mr. Speaker, I would see the day when I was required to ask a question like this. In view of federal labour legislation, and in view of the vociferous profession of their interest in the rights and welfare of all working people by Liberal party spokesmen, can the minister inform the house why employees of contractors renovating buildings on parliament hill are required to work ten hours a day without overtime? Is this exploitation of labour possible because of government policy?


Allan Joseph MacEachen: Mr. Speaker, I wish to thank my hon. friend for acknowledging the fact that the Liberal party is the true champion of the working people.


Some hon. Members:: Oh, oh.


Allan Joseph MacEachen: The present law under the fair wages and hours of labour legislation administered by the Department of Labour provides that overtime is paid after eight hours except in emergency circumstances. That is the general regulation. I have not had an opportunity to investigate this particular matter, because I received notice of this question about 20 minutes before the house opened, but I will be glad to investigate and to assure my hon. friend that the championship of the Liberal party for the working people will be applied in this case.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. P. V. Noble (Grey North):: Mr. Speaker, I should like to address a question to the Postmaster General. Is it the policy of this government to notify defeated Liberal candidates of changes or additions to rural mail service, rather than the member of parliament?


Hon. Azellus Denis (Postmaster General):: Mr. Speaker, in answer to the hon. member's question may I say that we are looking for the best advice in order to get good employees, and the way this is being done now is much better than the way it used to be done by the previous government.

Inquiries of the Ministry (Translation):

On the orders of the day:


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, I should like to ask a supplementary question along the same line. Is the new government also in the habit of consulting defeated Liberal candidates before renting post offices?


Azellus Denis: If defeated candidates are no longer worth anything, there are many more Social Credit candidates who have lost all value.
(Text):


Mr. G. H. Aiken (Parry Sound-Muskoka):: I have a supplementary question for the Postmaster General. Is it to be inferred from his reply that the defeated Liberal candidates who were not the selection of the people of the districts are superior to those who were elected to represent the districts?


An hon. Member:: That is what he said.


Mr. Speaker:: I must say that is not a supplementary question.


Gordon Harvey Aiken: Mr. Speaker, I rise on a point of privilege. I asked the question because of the direct answer the Postmaster General gave to the hon. member for Grey North. He stated he was giving information to the better person, and I merely asked him if it is his opinion and the opinion of this government that the person who was not elected is to be considered the better person to represent the riding.


Azellus Denis: Mr. Speaker, I humbly submit that the hon. member's question is not a question of privilege.


Mr. Speaker:: I do not know whether or not I am in order myself, but two wrongs do not make a right.
(Translation):


Mr. Gerard Chapdelaine (Sherbrooke):: Mr. Speaker, I wish to direct a question to the Minister of Finance. In view of his earlier statement, should I advise my electors not to come to me when they want to claim their legitimate rights from his department, but to the defeated Liberal candidate in Sherbrooke?


Gérard Chapdelaine: Mr. Speaker, after a slip of the tongue earlier, I directed to the Minister of Finance a question I should have put to the Postmaster General. I put it again, this time to the latter, if he is prepared to answer it.


Azellus Denis: Mr. Speaker, to answer the question of the hon. member, I must tell him that every suggestion is considered by the present government, even if it originates with the hon. member for Sherbrooke.
(Text):



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: I have a question for the Minister of Agriculture. Is it true that exporters had to raise the price of cheese 1 cent per pound to counteract the reduction in the export subsidy imposed by this government? I should like to ask the minister, is there any danger of this change pricing Canada out of the United Kingdom market? Has it been necessary in the past year for the stabilization board to buy cheese for the government? If not, have the government any idea of getting back into the export cheese business as they were 10 or 12 years ago before they completely lost the United Kingdom market and had to give back the control.


Some hon. Members:: Order.


Mr. Speaker:: What is the hon. member's question, please?


Lewis Elston Cardiff: When you announced that you would maintain the former support level of 32J cents per pound on Cheddar cheese-


Some hon. Members:: Order.


Lewis Elston Cardiff: -and the increase from 25 cents to 35 cents per hundredweight on milk for the production of cheese-


Mr. Speaker:: Order. I am sorry I must interrupt the hon. member, but would he come to the essential point of his question?


Lewis Elston Cardiff: I am just asking the minister if he failed to announce that the export subsidy on cheddar cheese to the United Kingdom would be reduced by 1 cent per pound. This is a reduction of 9 to 10 cents per hundredweight of milk in the government support price for cheese.


Mr. Pickersgill:: I rise on a point of order, Mr. Speaker. I believe it is a well understood rule of the house that there should not be debates or long speeches during the question period.


Lewis Elston Cardiff: Perhaps the hon. member would take notice of that himself when he gets on his feet.


Lewis Elston Cardiff: Due to the fact that I did not get answers to any of the questions I put to the Minister of Agriculture, I wonder if the hon. gentleman would allow me to ask the first question again. Incidentally, I gave him notice of this question before I came into the house.
Is it true that exporters had to raise the price of cheese by 1 cent a pound to cover up the reduction in the export subsidy imposed by this government?


Hon. Harry W. Hays (Minister of Agriculture):: The answer to the hon. member is no, the market took care of this.



SOUTHWESTERN ONTARIO


[Stage Direction]
On the orders of the day:
Mr. H. W. Danforlh (Kent, Onl.):: Mr. Speaker, I would like to direct a question to the Minister of Agriculture. Is the minister aware of the present alarming destruction in some areas of southwestern Ontario, especially Kent county, of valuable cash crops such as sugar beets, attributed to the residual effects of a chemical weed killer under the trade name of atrarine, used extensively as a spray on corn last year? Can he assure the house that his department will launch an immediate investigation while the effects are still visible and, should the findings be in the affirmative, will it take the necessary steps to ensure that all damaging properties of chemicals of this nature be made well known to farmers in order to avoid such crop losses in the future?


Harry William Hays: Mr. Speaker, yes, we will.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Has the minister noticed recent Canadian Press reports indicating a continuing and expanding increase in the use of consumer credit since 1954? Can the minister say whether this credit expansion is a cause for concern; and is the government considering measures for keeping the situation under control?


Walter Lockhart Gordon: I thank the hon. member for sending me notice of his question. I can assure him that this matter is under continuous study and review by the government.
Inquiries oj the Ministry TAXABILITY OF $500 GRANT FOR WINTER HOUSE CONSTRUCTION
On the orders of the day:


Walter Lockhart Gordon: May I reply to a question that was asked yesterday by the hon. member for Digby-Annapolis-Kings respecting the $500 bonus to be paid to the first purchaser of a new house constructed mainly during the winter period.
A person who purchases the house as a personal residence for himself, where certain situations are not applicable that I will mention in a moment, will receive the $500 payment without income tax consequences. Where the first purchaser or owner rents out the whole or part of the house or otherwise uses it for revenue purposes, the payment of $500 which he is to receive from the government will reduce the capital cost of the house which is the basis for the capital cost allowance which he may claim for income tax purposes. Where the first purchaser or owner of the house is subject to tax as a trader in real estate, he will have to take the payment of $500 into his calculation of the profit or loss on the business.
I am glad I did not answer that question off the cuff yesterday.


Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue in relation to the statement made by the Minister of Finance with regard to the $500 bonus for house construction in the winter. Could the minister say whether this bonus will apply to all parts of Canada whether or not the houses are constructed under the N.H.A.?


Hon. J. R. Garland (Minister of National Revenue):: Mr. Speaker, I think this is a question that might more properly be directed to the Minister of Labour, because it concerns part of the winter works program on an experimental basis as outlined by the minister yesterday. However, the answer, generally would be yes.


Robert Simpson: Mr. Speaker, a supplementary question addressed to the Minister of Labour. Would the Minister of Labour then tell me whether this bonus would apply from igloo to igloo?


Percy Verner Noble: Mr. Speaker, I should like to ask the Minister of Labour what would be the minimum value of a home that would qualify for the $500 payment.

Inquiries of the Ministry


Allan Joseph MacEachen: This particular matter will be dealt with by regulation and will be made known as soon as possible.



REPORTED INTENTION TO INCREASE GOLD PRODUCTION SUBSIDY

[Stage Direction]
On the orders of the day:
Hon. Paul Marlineau (Ponliac-Temis-camingue):: Mr. Speaker, I would like to direct a question to the congenial Minister of Mines and Technical Surveys, but in his absence perhaps my question should be directed to the Minister of Finance. In view of the broad hint which the minister of mines is reported to have given to the Quebec metal mining association meeting at the Seignory club that the government may take steps to increase the production subsidy available to gold producers, would the minister tell the house whether in fact a decision has been taken in this regard?


Walter Lockhart Gordon: I know of no such broad hints, Mr. Speaker.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Megantic):: Mr. Speaker, I would like to direct a question to the Minister of Finance regarding an article in this morning's Toronto Globe and Mail. It is headed "Just what was said", and deals with a statement made by the minister:
If we make taxes too burdensome on the very wealthy in an attempt to get more out of them, they may go away and take their wealth with them.
Does that mean that the minister intends to increase the taxes on small wage earners so as to compensate for those he will not tax proportionately to their revenue, in order to maintain a balanced budget?


Walter Lockhart Gordon: Mr. Speaker, I think if the hon. member waits until Thursday he will be reassured.



REDUCTION IN TOBACCO TAXES TO STIMULATE SALES

[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, I would like to address a question to the Minister of Agriculture and I will ask it in French. (Translation):
In view of the cigar and cigarette tobacco surplus in this country, does the Minister of Agriculture intend to recommend to the Minister of Finance a tax reduction on such tobacco in order to increase sales?

(Text):
Reduced taxes on tobacco; are you going to recommend that to the government?



INQUIRY AS TO REPORTED BANK MERGER

[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: I should like to ask the Minister of Finance if he is able to answer a question which I put to him previously. I was wondering whether, since I last asked this question, the minister or his department have received any representations concerning a possible merger between the Bank of Nova Scotia and the Toronto Dominion Bank.


Walter Lockhart Gordon: No, Mr. Speaker.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. Remi Paul (Berlhier-Maskinonge-De-lanaudiere):: Mr. Speaker, may I direct a question to the Minister of Transport. (Translation):
Mr. Speaker, my question is directed to the Minister of Transport. Can the minister confirm that he has advised the board of broadcast governors of his refusal to recommend the granting of a licence to RadioPrestige for a private French speaking radio station in Ottawa, such a refusal being contrary to the B.B.G.'s decision?
(Text):


Hon. G. J. Mcllrailh (Minister of Transport):: Mr. Speaker, if the form of the question is as it was translated, it is out of order. I am not sure of the language used in the translation, and for that reason I would prefer to take the question as notice. I could answer it otherwise, but I would prefer that it be taken as notice.
(Translation):


Rémi Paul: A supplementary question, Mr. Speaker. Does the Minister of Transport know that this application for a permit has been warmly supported by one of the most representative organizations of the French minority of Ontario, that is the French Canadian Association of Education of Ontario?
(Text):


George James McIlraith: Mr. Speaker, that was an assertion of fact, not a question.



CONTROL OF COMMUNITY ANTENNA SYSTEMS

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

of State a question. In view of the decision of the board of broadcast governors not to make recommendations to the government on the regulation and control of community antenna systems, can the minister tell us whether the government itself is at the present time considering bringing these systems under the control of the board of broadcast governors?


John Whitney Pickersgill: Mr. Speaker, the short answer to that question would be no, but I do think the question is a very important one and I have myself been giving some consideration to it with a view to deciding whether or not the appropriate time has yet come for governmental action.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister, notice of which I sent him earlier this afternoon. In view of the hope, cautious but none the less real, that has been engendered by the announcement of test ban talks among the big three, and by President Kennedy's welcome declaration that in the meantime the United States will make no nuclear tests in the atmosphere, will the Prime Minister on behalf of the people of Canada add to mankind's hope for peace on earth by declaring that Canada will refrain from acquiring nuclear weapons while these discussions are in progress, in the hope that the government may yet find it unnecessary to acquire them at all?


Lester Bowles Pearson: Mr. Speaker, I received notice of the hon. gentleman's very important question just a few minutes before I came into the house. In reply I would say, as the Secretary of State for External Affairs said yesterday, that I am sure we all welcome the resumption of talks among the three great powers on a high level for a ban on nuclear testing, talks which have been brought about by the wise and positive initiative of the United Kingdom and United States governments.
Experience has taught us not to expect too much too soon from discussions on this subject, but I know all hon. gentlemen will agree we must hope for good results and do everything we can to achieve them; first the abolition of nuclear testing which is the immediate objective of the talks, and then abolition of nuclear weapons as part of a general disarmament agreement.
It is not inconsistent with this position for us in Canada to put ourselves in a position
Inquiries of the Ministry to discharge the defence pledges we have made for collective security and for our own defence, pending re-examination of defence policy by NATO and by this government, which re-examination could in due course result in changes in Canadian defence policy.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. In view of the hope that has been engendered these last two days in this connection, does the Prime Minister not feel that some additional declaration by Canada at this time would be a real help?


Lester Bowles Pearson: Mr. Speaker, the Canadian government will do nothing to frustrate those hopes.



LIVESTOCK


[Stage Direction]
On the orders of the day:
Horace Andrew (Bud) Olson: Mr. Speaker, I would like to address a question to the Prime Minister because the subject matter involves more than one department. I wish to ask whether the government will give favourable consideration to some emergency measures if the drought condition in southern Alberta continues to deteriorate, such as making more acres available for grazing within the Sufifield experimental station, and things of that nature?


Mr. Speaker:: Order. I must interrupt to say the question is hypothetical and, as such, should not be admitted.


Horace Andrew (Bud) Olson: Mr. Speaker, I should like to rephrase my question and address it to the right hon. Prime Minister. May I assure Your Honour that the drought in southern Alberta and southwestern Saskatchewan is not hypothetical but is very real and is there now. I address my question to the Prime Minister-and I wrote to him about it yesterday-because it involves more than one department and we are told this is the proper way to do it.
Is the government giving consideration to taking some emergency measures to deal with this situation so there will not be a panic sell-off of cattle, breeding stock, and so on, that would crack the market structure and the prices realized by the cattle industry in western Canada.


Lester Bowles Pearson: Mr. Speaker, I can assure the hon. member that the government will be glad to give consideration to the situation he mentions.

Inquiries of the Ministry When I have had an opportunity to read his letter, which I have not yet had, I will be glad to reply to it,



HIGHWAYS


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: Mr. Speaker, I would like to ask the Minister of Public Works what progress he is making in his conversations with provincial highway authorities and, while he is telling us about the progress, he might tell us why he is having these talks?


Hon. J. P. Deschatelets (Minister of Public Works):: Mr. Speaker, some time ago I had a meeting with both the minister of roads and the minister of public works of the province of Quebec, and although this was an informal meeting I was asked to consider a change under the Trans-Canada Highway Act so as to give approval to the construction of an expressway along the river, as well as a tunnel and a bridge across the St. Lawrence river. In a very short time some officials of my department will meet with officials of the Quebec government, and thereafter we will be in a position to reach a decision.


Douglas Mason Fisher: As a supplementary question, could the minister make it very clear that he is not planning to hold talks with all the provincial highway authorities, as has been the gist of some of the reports of this meeting?


Jean-Paul Deschatelets: Well, Mr. Speaker, this is a decision that will be reached in due time.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Malcolm MacInnis: Mr. Speaker, I would like to direct a question to the Minister of Finance. In the matter of pay increases for civil servants, group D, does the minister intend to follow the recommendations of the civil service commission?


Walter Lockhart Gordon: Mr. Speaker, I do not think I have anything more to add to this question than what I said the other day about the whole subject of pay increases for the civil service.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. Does the minister still intend to meet with representatives of civil service organizations to discuss this matter on Friday of this week?


Walter Lockhart Gordon: As soon as the budget is disposed of, which will be on Thursday the 13th, I propose to meet with them, and I am planning to do so on Friday.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I wish to direct a question to the Minister of Labour, of which I have given notice. Would the minister inform the house whether the Canadian grain ship, the Howard L. Shaw, recently boycotted at Chicago, has been loaded and released to its Canadian owners?


Allan Joseph MacEachen: Mr. Speaker, I thank the hon. member for giving me notice of this question. The final argument in the court case introduced by the national labour relations board against the I.L.A. and the S.I.U., involving a secondary boycott of the Howard L. Shaw, is being heard today in Chicago. During a preliminary hearing last week the court imposed a fine of $1,000 on the local union for its failure to respect the temporary restraining order that had previously been put into effect. The final disposition of the court case is expected very soon, possibly today. In the meantime this particular ship has not been loaded, but it is still in the hands of its Canadian owners.


Alfred Dryden Hales: As a supplementary question, would the minister use his office to do everything within his power to see this ship is released?


Allan Joseph MacEachen: Mr. Speaker, we have been in very close touch with the officials of the United States government, especially the secretary of labour, and both the Department of Labour and the Department of Justice have been very active in the courts in Chicago in support of the interests of this particular ship. They have exercised their offices in a helpful way through the courts, and we certainly intend to proceed along these lines.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Heath Macquarrie (Queens):: Mr. Speaker, I have a question for the Minister of Public Works prompted by an item in the Summerside Journal of June 7 from its

Ottawa correspondent, concerning the Prince Edward Island causeway. Is the minister's department now considering a combined tunnel-causeway project and, if so, could he estimate how much delay this is likely to cause in the actual construction of the project?


Jean-Paul Deschatelets: Mr. Speaker, I certainly cannot answer the last part of the question, but I can say to the hon. member that this project is still under consideration.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Erik Nielsen: Mr. Speaker, my question is prompted by the answer the Minister of Northern Affairs and National Resources gave to a question asked by the hon. member for Burnaby-Richmond last Friday. I know the minister would not want to be misleading or inaccurate in the information he gives to the house, and that is why I ask the question now.
Will the minister please direct his officials to supply him with details of the hundreds of thousands of dollars in tourist and other revenues earned by the federal and territorial governments as a direct and indirect result of the Dawson city festival, and furnish this information to the house so that all the facts are made known to parliament, so disclosing the fact that, far from being a liability, the festival was a positive success?


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: Mr. Speaker, I have no intention of making a speech on this subject. The matter I was dealing with at that time concerned the financial position of the federal government in regard to the festival, and was not related to the income that might or might not have been derived from the tourist trade. We are deriving a great deal of income from the tourist trade, from a variety of sources, but that had no relation to the matter I was discussing then.


Erik Nielsen: I have a supplementary question, Mr. Speaker. Does the minister not believe that the revenue earned by the Dawson city festival has some relation to the investment made by the federal and territorial governments in this venture?


Mr. Speaker:: Order. I am sorry to interrupt the hon. member, but his supplementary question is in the nature of argument.
Inquiries of the Ministry NATIONAL PARKS



WOOD BUFFALO


[Stage Direction]
On the orders of the day:
Arthur Laing: Mr. Speaker, I should like to reply to the question asked by the hon. member for Peace River last Thursday, in which he asked whether there would be referred to parliament any decision regarding an intention to reduce the size of Wood Buffalo park. I am able to tell him now that this would involve an amendment to part 1, section 5 of the schedule of the National Parks Act and would therefore, of course, come before the house.



LEAD AND ZINC


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Minister of Trade and Commerce. I apologize for not sending him notice, but my office staff has been overworked owing to the fan mail I am receiving on the Columbia river issue. Can the minister inform the house whether he has received representations from any agency of the United States government urging the necessity from the United States point of view of a reduction in the production of lead and zinc in Canada.


Hon. Mitchell Sharp (Minister of Trade and Commerce):: No, Mr. Speaker, I have not received such representations since I took office.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Royal: Mr. Speaker, I have a question for the Prime Minister. I wonder whether the Prime Minister's attention has been drawn to an item in today's Montreal Gazette to the effect that the Quebec government intends to present legislation on portable pension funds, that the central government must know of this intention and that the field is virtually occupied. Will this change the federal government's intentions in regard to portable pension legislation?


Lester Bowles Pearson: Mr. Speaker, my attention has not been drawn to that article.


Mr. Fairweather:: A supplementary question, Mr. Speaker. I wonder whether the Prime Minister would answer the second part of the question. Proceeding on the assumption

Municipal Development and Loan Board that the information is correct, would this change the federal government's intentions in the portable pension field?


Lester Bowles Pearson: Mr. Speaker, in view of the fact that my hon. friend has based his question on an article in the press, I think he should give me the opportunity to read the article before I reply to his question.



MUNICIPAL DEVELOPMENT AND LOAN BOARD


Walter Lockhart Gordon: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to promote increased employment in Canada by the provision of financial assistance by way of loans to municipalities, the object of such loans being to enable municipalities to augment or accelerate their capital works program subject to the approval of the provinces concerned; and for this purpose to provide a special fund in the consolidated revenue fund not exceeding four hundred million dollars to be available for the making of loans to municipalities and certain other municipal authorities for specific municipal capital works projects; to establish a municipal development and loan board to administer the fund so provided; to authorize the acceptance of municipal debentures for any loans so made; to authorize a measure of forgiveness in respect of any loans so made, depending upon the date of completion of the projects for which such loans are made; and to provide further for other related and incidental matters.
Motion agreed to and the house went into committee, Mr. Lamoureux in the chair.


Walter Lockhart Gordon: It is with considerable pleasure that I rise to move the resolution concerning the municipal development and loan act. I should like to make a brief statement at this time and give a broad outline of the provisions of the proposed legislation. Members of this committee are aware of this government's determination to do everything possible to combat serious unemployment in this country. One of the constructive ways in which this can be done is by assisting municipalities to proceed with needed capital works, many of which have been long deferred, and to help them expand and accelerate current programs.
Over the past five years, as has already been stated, an annual average of 6.6 per cent of our working force has been unemployed. This meant that on the average 425 thousand Canadians were without work during each of those years. At the same time countless essential municipal works were crying out to be undertaken. These are works which could offer employment to thousands of our citizens while benefiting hundreds of
[Mr. Fairweather.l
thousands with permanent community facilities. It is this situation that the municipal development and loan act is designed to meet.
In essence, the proposed act seeks to increase employment by the creation of new jobs in the construction industry engaged in municipal capital projects. The construction industry in Canada is particularly suited to employing large numbers of persons who currently make up the ranks of our unemployed. Many without work today have relatively few skills. Some of these are Canadians born from farms who have moved into urban communities. Many are newcomers to Canada facing difficulty in establishing their families here. Others, again, need work for short periods of time, particularly during the winter months when the construction industry could operate at higher capacity if the demand for buildings and capital facilities were expanded and maintained throughout the year.
As I have indicated, one of the primary purposes of the proposed bill is to help expand the construction of basic community facilities in order to increase employment. The effectiveness of this program should be increased materially by virtue of the fact that most municipalities from one end of the country to the other have developmental projects which they could bring forward provided financial assistance is made available. Thus the employment effects should be as widespread as it is possible to ensure. Moreover, it should be possible, and it is the government's hope that it does prove possible, to get on with many projects during the coming winter months.
As indicated in the resolution, the bill will provide loans to municipalities by the federal government up to an authorized limit of $400 million. Loans under this program will be available for a period of nearly three years ending March 31, 1966. The bill will provide further that one quarter of the amount of each loan may be forgiven on work on eligible projects completed on or before March 31, 1966.
Forgiveness of a significant portion of each loan is, of course, not only an incentive to municipalities to proceed quickly with eligible projects. It is equally important in helping to hold down the size and burden of long term debt and to lower the carrying charges on the net balance of the loan.
Loans under the bill will be extended only with the express approval of the provincial authorities. Speaking in Toronto on May 29 to the federation of mayors and municipalities, the Prime Minister emphasized that financial assistance will be given in ways which fully

observe both the spirit and letter of the constitution. The bill we propose to introduce fulfils that undertaking. It provides that loans may be made only after a municipality has secured explicit provincial approval for eligible projects and for related borrowing by way of debentures. The operating procedures proposed are equally consistent, we believe, with full respect for the constitution which places the municipalities under the sole and exclusive jurisdiction of the provinces.
The intent of the proposed legislation is that loans will be available to assist financing of important and useful projects when they represent additions to, or acceleration of, capital programs which municipalities would otherwise have carried out. It is not the purpose of the federal government to act as a lender of last resort to the municipalities. The primary intention of this bill is to provide the maximum number of new jobs in this area over a relatively short time.
Municipal projects eligible for financing through these loans will be limited to the kinds of capital works listed in the bill. These capital works cover the main facilities and services of a municipality. The list is limited to avoid overlapping with other programs, such as assistance to sewer construction already provided through Central Mortgage and Housing Corporation, or existing federal grants for hospital construction. It is limited also to avoid infringing the exclusive provincial jurisdiction over education. However, the eligible list will enable approximately one half of the capital expenditures for which municipalities normally borrow to qualify under the bill.
Loans will cover two thirds of the approved cost of eligible projects. The rate of interest will be based on the government's own long term borrowing rate, and it will thus be considerably lower than the rate at which most municipalities themselves could borrow. At the same time the real cost to municipalities of funds advanced under the bill will be reduced to a very low level by the forgiveness feature it contains.
It is expected that the proposed authorization of $400 million will meet the potential demand for loans for additional projects of an eligible kind. When it is considered that loans are applied to two thirds of project cost, it is evident that if full use is made of the program $400 million in loans will provide the base for a minimum of $600 million of additional projects over the period of the program. This would represent an increase of nearly 50 per cent in the capital expenditures by municipalities on projects eligible for loans. It would represent an increase of nearly 25 per cent in over-all capital spending by municipalities during the loan period.
11.	1963	889
Municipal Development and Loan Board
The achievement of a program of this magnitude, based on loans totalling $400 million by the federal government, will make a major contribution to new employment, and at the same time will result in a marked increase in community facilities. The administration of the new program will be carried out by a loan board working in the closest collaboration with Central Mortgage and Housing Corporation, whose activities place it in close touch with municipalities and their problems.
The bill provides that a service agreement may be arranged between the new loan board and Central Mortgage and Housing Corporation whereby the latter will use its facilities, field offices and personnel to assist the board with the loan program. This will enable the board to start its operations quickly and at the same time avoid building up a new organization which would duplicate many of the services already available through C.M.H.C. While it is contemplated that C.M.H.C. will provide many of the administrative services under the act, the prime initiative for developing the loan program will remain with the loan board. The responsibility for decisions with respect to loans and for the administration of the act will rest with the board. The board itself will report to my colleague the Minister of National Revenue, who is the minister responsible for the operations of Central Mortgage and Housing Corporation.
The new program will be in addition to the various ways in which the government is already assisting, or planning to assist, the municipalities. As the hon. member for Winnipeg North Centre mentioned yesterday, I think it was, when talking about the winter works program, this program, to use his phrase, will be dovetailed with the other programs designed to create work throughout the country through the winter months and throughout the year. This program will not displace existing programs. In fact it will serve to reinforce them by increasing the financial resources for municipal capital investment.
Mr. Chairman, I am looking forward to giving a fuller explanation of the provisions of the bill at the appropriate stage of its consideration by the house. I trust this consideration will make clear to hon. members of the committee and to the country the material contribution which the proposed loan program can make to the solution of our unemployment problem. This is a matter of great concern to all hon. members, and I ask for their co-operation in expediting the passage of the proposed legislation so that it may begin to be effective during the coming winter.
890	HOUSE OF COMMONS
Municipal Development and Loan Board


Paul Raymond Martineau: Mr. Chairman, might I ask the minister whether he is in a position to tell the committee what is meant by the expression "other municipal authorities" as expressed in the resolution?


Walter Lockhart Gordon: That phrase is, I think, defined in the bill. It was included so that no authority would be left out in areas where municipalities as such are not established.


Gordon Harvey Aiken: Mr. Chairman, might I ask a further question of the minister. What is the basis for the selection of the type of works that will be authorized? Is there any particular basis on which the selection has been made?


Walter Lockhart Gordon: They are intended to include the main works which a municipality normally carries out and borrows for, with the exception of the items I mentioned in my explanation; hospitals, for one thing, sewers for another, and also schools. They are the main ones.


John George Diefenbaker: Mr. Chairman-


Mr. Barnett:: Mr. Chairman, I wonder whether the Leader of the Opposition would mind allowing me one question. I understood the minister to make some reference to the fact that the proposals in this bill would dovetail with the winter works incentive program. I am not clear, and I wonder if the minister could make it clear, whether projects which are undertaken and financed by loans under this program will qualify under the winter works program.


Walter Lockhart Gordon: I did not mean that by saying they would dovetail. I really meant that the winter works program and this program will be administered in such a way that they will not be overlapping.


Mr. Smith:: Do the grants qualify for both programs? That is the point.


John George Diefenbaker: Mr. Chairman, at this time I intend to refer generally to some of the matters to which reference has been made by the Minister of Finance. He has chosen to refer in some detail to the provisions of the bill which will be introduced. That, of course, should not be done in discussion of a resolution, because the bill is not before the committee and no reference regarding its particulars should be made.
However, I would say immediately that this plan will be examined with care and attention on the part of the opposition. It is going to bring about the expenditure, in a period of three years, of some $400 million. We have had no indication where that money is coming from or how it is going to be procured. Many of these things, of course, will be made clear when the budget is introduced on Thursday night.

However, I should have thought the minister would have been able to give us some of his views on the question of finance in connection with this matter, views which were, to say the least, considered unorthodox by most members of the house but which received the support of the 16 other hon. gentlemen opposite who today occupy the treasury benches. You will recall, sir, that on November 6, 1962, all Liberal members in the house voted in favour of the amendment introduced by the hon. member for Red Deer, which provided that there should be adopted-I am summarizing-a policy of debt free money. This motion received the support of the present Minister of Finance and, as I said a moment ago, of a host of others who today occupy the seats of government.
What has taken place in the interim? Do they still believe in this principle which they supported then? Did they become converts to the ideas of Social Credit for only two days? These are things I should like the Minister of Finance to explain in order that I may find out when his troubled mind became clear following the writing of "Troubled Canada". Is this, then the means of financing this proposal? We ought to know something about that. I am sure the minister, with his accustomed frankness, will either say that he approved of this unorthodox amendment moved by the leader of the Social Credit party on the basis of political expedience at the time or that, in truth, he had accepted holus-bolus the financial implications of it which are far removed from the background and associations of the hon. gentleman.
I was interested in the speech delivered in Toronto by the Prime Minister when he addressed the Canadian association of mayors and municipalities. At that time he led those representatives to believe, although I am sure it was unintentional, that all kinds and varieties of public institutions could be built by them with these loans, that the sluice gates of credit were being opened to them. These people were led to believe that the policies of the Minister of Finance would make ample credit facilities available, would make interest rates as low as possible, to use words which he used just prior to the election, and that these policies would be carried into effect. Well, the association of mayors certainly approved of what they heard, because they thought vast sums of money were going to be made available to them in the manner requested over a period of years.
I think I could do no better than refer to the brief that was presented by the

municipal governments of Canada, the Canadian Federation of Mayors and Municipalities, to the government of which I had the honour to be the head on November 9, 1962. The item to which I shall refer in the brief is under the heading "National monetary loan fund". The federation has recommended the establishment of a municipal loan fund or a municipal development bank. Then I note that the brief refers to the fact that this would help each urban area undertake planned development programs which would not only provide work but would direct such work to the satisfaction of basic community needs.
The principle of the municipal loan fund is already recognized by the federal government in the legislation which authorizes long term financing of trunk sewers and sewage treatment plants. In effect, the federation is urging that federal loans should also be made available for other basic community facilities, for example for urban roads, bridges and mass transit facilities, for the acquisition of property for redevelopment, for water supply and for the purchase of recreation space.
I can only infer, after having listened to the minister, that what the municipalities asked for they are not going to get. The brief called attention to the basic need for long term federal loans on favourable rates of interest in order to finance projects which are primarily self-liquidating and essential to community development, such as urban roads, bridges, transit facilities, sewers, water supply, recreation, land for development, grants on a more adequate scale toward the cost of hospitals, schools, and other community services which are essential but are non-self liquidating.
During the course of the campaign the minister himself made many promises in this connection. He enunciated an eight point program which it is very interesting to read again. First he refers to the need for easy money, ample credit facilities, low interest rates, low interest loans to municipalities for needed public works and services to stimulate the construction industry; low cost loans for municipal public works; low interest loans to create jobs by enabling municipalities to build schools and hospitals, rebuild streets and sidewalks, clear slums, improve transit systems and undertake urban renewal projects. Over and over again he set out this national program. Until we see the bill we will not be able to ascertain the extent to which the promises of a few months ago have been translated into the performance of today.
The general plan of the municipalities was suggested by Mayor Mongrain of Three Rivers. He set out in detail their demands and their requirements. Now, to begin with, we recognized when we were in office that
11.	1963	891
Municipal Development and Loan Board there were certain fields of national development that would welcome the assistance of the federal government, such as housing, a national problem, and the problem of pollution which is becoming increasingly serious. Indeed, unless we take more and more effective action it will not be long before our vast water resources are poisoned by reason of the pouring in of sewage and industrial wastes resulting in a loss to this and future generations.
There can be no question that many of the matters covered by the hon. gentleman come within the jurisdiction of the provinces. I hear much about what this government intends to do in connection with the constitution. I read that Mr. Lesage, the premier of Quebec, has presented the government of Canada with an ultimatum, an ultimatum so-called by one of his ministers, which is apparently designed to assure that the rights of the provinces shall be respected and maintained. Mr. Gerin-Lajoie, speaking in the latter part of the month of May, predicted an early end to certain joint programs through federal government withdrawal. I want to know what those fields are. Is one of them the winter works program which was laughed at when first introduced but which has provided many jobs for Canadians in every part of Canada?
Why introduce this measure at this time, before the budget? Why the introduction in haphazard form of these various suggestions? Let us see the whole picture rather than having matters presented in a haphazard, piecemeal manner. The Prime Minister today, in purple faced annoyance and rage at a question I asked him regarding the convening of a conference with the provinces, finally answered, after being pressed to do so, that a conference was going to take place. I can understand his annoyance because he is having plenty of trouble with his major supporter, the premier of the province of Quebec. That premier has decided what shall be done by this government and this government has to be very careful that it does not transgress in any way the ultimata that emerge from the legislative buildings in Quebec.
The maintenance of the constitution has always been of the essence of Conservative policy. We have followed that throughout the years. Why has this legislation not been submitted to the provinces? Why has such legislation in general not been placed before the provinces to get their views? Certainly I think that is a very proper question. The provinces are not going to be denied the right to say which projects shall in fact be acceptable. Every project that a municipality

Municipal Development and Loan Board desires to place before the government will have to have the approval of the province within which that project is located.
I say that in view of the changes inherent in this legislation there should be a federal-provincial meeting to review all aspects of municipal finance. In addition there should be an opportunity for the municipalities to have representation thereat. Here we are rushing to give legislative effect to a measure that, to say the least, has not been very carefully considered. We had an example of that yesterday when, with fife and drum, an announcement was made of new legislation by the Minister of Labour. A $500 bonus was held out. Talk about the carrot. What an attractive thing that was.
When the Minister of Finance was asked yesterday whether the $500 would be taxable he gave every appearance of never having heard anything about this matter until it was announced by the Minister of Labour. But today he was able to give the answer that the government has decided it will not be subject to income tax except within certain limitations. When was that decision made? Was it made since the question was asked yesterday? Was it part of the regulations which were referred to today by the Minister of Labour as yet to be prepared? Was the answer of the Minister of Finance yesterday indicative of the fact that what the government is doing in these shifty days of decision is bringing in legislation without knowing the consequences and without at the same time having received the co-operative support of the provinces who deserve every consideration in this regard, for the municipalities are the creations of the provinces?


Mr. Graffiey:: Arrogant centralizers.


Some hon. Members:: Oh, oh.


John George Diefenbaker: families. These are but a few of the matters that would represent a properly planned urban development program, one not arrived at as a result of a few persons sitting down together and determining the course but as a result of consultation with the provinces and, if necessary, with the municipalities themselves
Sir, we intend during the course of the discussion on the resolution to place our views before the committee. Various hon. members will be asking questions to elucidate the degree to which the constitutional rights of this country are being followed or departed from. I said when I began my remarks that we do not want to see so important a policy as this put forth in a piecemeal fashion. We want to see the overall approach. Before we determine our course in this connection we want to see the budget. Where is the money coming from? What are the plans? What of the hopes expressed of an early balanced budget in the face of a multiplicity of potential expenditures already promised, and in embryo form in other cases? Certainly we are flattered by the fact that after all the arguments that were put forward as to the terrible financial condition of our country and its economy, the very first thing the Minister of Finance does is bring before parliament a bill to set aside $400 million for loans to municipalities. That is a very good answer to the gloom and doom which we heard for so long from those opposite.
These general representations are put forward on two grounds. First, why have the provinces not been consulted? Is it the intention of the government to get this legislation through and then say to the provinces, "This is a cut and dried plan"? I do not think Premier Lesage will like an ultimatum of that kind from the federal government.
Next, what means will the government employ to raise the money? Was this conversion in November to debt free money an actual conversion? If so, do hon. gentlemen opposite intend to join with their allies in the Social Credit party in giving to Canada an example of the kind of thing for which they voted on November 6 last?
(Translation):


Gilles Grégoire: Mr. Chairman, I am willing to admit that the Liberals are not the only ones to take into consideration some of the Social Credit ideas. The Conservatives do so too because we just heard the Leader of the Opposition (Mr. Diefenbaker) read almost word for word the speech made by the member for Fraser Valley (Mr. Patterson) in this house on May 24, 1963, as evidenced by page 257 of Hansard; while speaking precisely about the Municipal Improvements

Assistance Act, of 1938, the hon. member mentioned that that legislation had been in force for two years but had become inoperative in 1940, when loans had ceased to be granted.
So, as you can see, the Leader of the Opposition himself is interested in the speeches and ideas of the Social Crediters since he saw fit to mention a part of them in his recent speech.
If there is one thing that the Leader of the Opposition should not forget, it is that if he had started before today to put into practice some of the sound, sensible and reasonable ideas that the Social Crediters have been putting forward for many years, he might not sit today where he is but he might still sit on the other side in the house. But it took him such a long time to understand or rather to misunderstand that he had scarcely been five years in power when the opposition parties succeeded in persuading the people that the government had neither fulfilled their promises nor accomplished what was expected of them while they were in power. And the people took it upon themselves to remind him of it, precisely because he had refused to accept as his own some of the sensible and logical ideas of Social Credit. Thus he was sent back into opposition by the people and there he will remain for many years to come if not forever.
For my part, Mr. Chairman, I must say that we are ready to accept this resolution we are discussing now, in the broad outline that has been given and although we were not given the details that we would like to have.
As a matter of fact, Social Crediters have been asking since 1935 that loans be granted to municipalities by the Bank of Canada.
More than ten years ago, the province of Alberta started granting loans to municipalities of that province at interest rates of 2i, 2J and 3 per cent.
Municipal Development and Loan Board accept: the running into debt of a government in order to make loans available to municipalities.
Today, at last, the Liberals are ready to accept that idea. It was just as good 25 years ago, Mr. Chairman. It was just as good 15 and 10 years ago, but today after having heard it stated and explained from every angle, we note that the Minister of Finance in the present government (Mr. Gordon) has deemed it advisable to put it into practice. We do not know much about the details, but just the same, we have a few suggestions to make and we hope that when the bill is introduced in this house, some of those particulars will be included in the bill.
The first point and the most important is this. The Leader of the Opposition said a moment ago: Where will the money come from to lend those $400 million to the municipalities? Where will those $400 million come from? We Social Crediters say: From the Bank of Canada. Why the Bank of Canada? Precisely because the Bank of Canada was set up to meet not only an ever growing development but also the needs of municipal and provincial governments as well as those of the Canadian people as a whole. The Bank of Canada could finance those $400 million at administrative cost. Being an excellent accountant, the Minister of Finance will realize that this is no inflationary policy for this country. Any accountant who does a company's bookkeeping uses the double entry system, with all the assets in one column and the liabilities in the other.
When the Bank of Canada creates the required credit, it will be added to the accruing assets of this country.
Supposing, for instance, that the Bank of Canada loans an amount to the city of Montreal to finance the building of a subway about which there has been so much talk for
At our national convention in July 1961, when Social Crediters laid down their policies and their program, an item of that program suggested precisely that the Bank of Canada should grant loans without interest to municipalities.
During the last session, in 1962, the leader of the New Democratic party, the first to be won over to such an idea, advocated the granting of loans to municipalities by the federal government. He did not mention the Bank of Canada, however, but he felt that those loans could be made available through the constant running into debt of the federal government. This is something we could not 28902-5-57J
so many years; whenever a new section is built, it will mean a new asset on the credit side of this country, if the Bank of Canada grants new credit to balance the added assets, we will only have some sound accounting, as any good accountant will appreciate. Then, the Minister of Finance will not be able to' criticize what we are claiming today.
Whenever new assets are added to a country s credit, whether it be a subway, bridges, schools, municipal filtration plants^ etc., the Bank of Canada should create new credit as those assets are developed. It is a normal thing, because the municipalities are in return asked to repay the loans as the
896	HOUSE OF
Municipal Development and Loan Board municipal buildings depreciate. For instance if a subway is supposed to last 100 years and costs $200 million, $2 million a year should be asked, and, in a hundred years, when it is completely depreciated, and it is time to rebuild it, the subway will be completely paid for.
Such a system means that, as new riches are added to the country's assets, by erecting new buildings, or building new municipal roads, the Bank of Canada should put out new credit, and as everything depreciates, the bank will ask for reimbursement, which means that, at any time, circulating credit is about the same, neither larger nor smaller, but equal to the country's wealth, that is to the social capital of the country, to be written on the credit side of the municipalities and provinces.
That, Mr. Chairman, is the first suggestion. That, Mr. Chairman, was the first suggestion we made to the Minister of Finance. He should finance those $400 million through the Bank of Canada and then we would not have any misgivings about the centralizing or autonomist ideas of this government, because then the Bank of Canada would become the organization charged with community development financing, not the federal government. It would be the Bank of Canada which in fact would be also the federal government bank as much as the provincial government bank, but above all the bank of the Canadian people, since it would not be only the creature of the federal government but above all of the public bodies and all the government organizations both federal and provincial.
Then nobody would be able to blame the federal government for interfering because it would not be the federal government who would enter the field of municipal development, but it would be the Bank of Canada which would grant assistance to the provinces in order that they be in a position to pass that assistance on to the municipalities.
Mr. Chairman, it would certainly help remedy unemployment if the Bank of Canada created new credit. A moment ago I heard the minister when he said that one of the purposes of this bill was to fight unemployment. Now, this new fund will assist the municipalities to carry out capital projects which would create new jobs. This is how we could check unemployment, because this would not be a creation of new jobs to increase production of goods but it would rather be new jobs in the field of public works which would contribute to increase the wealth of this country and the wealth 

that would not be saleable in an immediate or far-off future, but public wealth.
Every time we increase our public works, we increase the people's wealth, and in return we give jobs to men in this field, men who automatically with the salary they receive and the money they spend help to create purchasing power which in turn is capable of helping private industry which has a responsibility to produce for the people.
In my opinion, Mr. Chairman, that is the best way to deal with unemployment. Each time those men are put to work on public projects, in a given sector, they get purchasing power which helps create more purchasing power-that is for workers in industry or the services-power to consume what industry can produce with a small percentage of workers.
Mr. Chairman, there is another thing we must ask ourselves about that measure. What interest will the municipalities have to pay?
If they are asked to pay a rather high rate of interest, say from 5 to 5| per cent, their yearly budget will again be burdened with another increase in debt charges. Now we find that today there are, in this country, a large number of municipalities, if not the majority of them, which have to spend 25, 30, 35 or even 45 per cent of their budgets on debt charges alone.
When that money is placed at their disposal through the Bank of Canada, the Bank of Canada will be able to lend it at administration cost, that is to say that the Bank of Canada will be able to lend money at one half per cent. At the same time, the municipalities will not have their budgets burdened with so much interest increasing their debts, for let us not forget that the more we give now to the municipalities, the more we help them service their debt which represents such a large portion of their budgets.
Then, what should the interest be? If the Minister of Finance is willing to seriously consider the motion for which he voted last year and to which the Leader of the Opposition (Mr. Diefenbaker) referred earlier, that is the motion on debt free money and implement it, he will see to it that the Bank of Canada grant interest free loans to municipalities, that is loans without interest with the debt-free money from the Bank of Canada. Repayment then will be made much easier since the principal only and not principal plus interest will have to be repaid. We know that when a municipality has to

borrow an amount of $1,000 and to repay it with interest over 20 years it must pay twice the original amount of $1,000, thus paying twice for roads and buildings.
If the interest is low or if the loans are free from interest, the municipalities will pay the cost of construction only once.
So, Mr. Chairman, that is another important feature which should be included in this municipal development and loans legislation, namely interest free loans.
To illustrate how important interest can be to the municipalities, let us consider once again the matter of the Montreal subway. If the city of Montreal gets a loan of $200 million at an interest rate of 5 per cent to build the subway, every year, in interest alone, the municipality will have to pay $12 million to service its debt on the subway alone. If the amount is to be repaid over a period of 100 years, that is the life of the subway and the amount of depreciation alone-that is $200 million divided by 100 years-then, the municipality would be paying only $2 million a year and after a hundred years, the subway would be completely paid for, instead of paying $12 million a year on interest and after a hundred years not having even started payments on the capital borrowed and still owing the whole value of the subway which will be worn out by that time. That subway would then be completely useless and the municipality would have paid $12 million a year for it.
But in proceeding the way I suggested a while ago, the city of Montreal would be paying only $2 million a year and after a hundred years, the subway would be completely paid for.
Mr. Chairman, that is, in our opinion, a most important matter that the Minister of Finance will have to consider when he proposes the bill: an interest free loan and, most of all, a loan from the Bank of Canada. It is important to know where that money will come from. If it comes from the Bank of Canada, it will be new credit that will, more or less, increase the credit already in circulation and will make itself felt in the country as a whole as purchasing power that will enable Canadians to buy the equivalent of the increase in production.
A short while ago, I listened to the Leader of the Opposition talking about what he called "easy money". Mr. Chairman, we in this party call that adequate money to meet the needs of the country. It is not necessarily
11, 1963	897
Municipal Development and Loan Board easy money, it is not what is called easy money. It should be called adequate money, to achieve what is possible in our country.
It is possible to do that, since today, municipalities borrow largely on foreign markets; as a result foreign money is brought into our country and it is added to our own money supply. We would rather have our own Bank of Canada add money to the Canadian market.
The fact that money comes from one place or another-and I want the Minister of Finance to listen carefully

will not create inflation. Suppose I have two jugs of water and that one is filled with water brought in from New York and the other is filled with water taken from the taps of the Bank of Canada. If I pour some of the water in a glass, this will not mean that the quantity of water has been increased. The fact that money comes from Canada or from abroad will not mean more money in circulation in Canada, since the amount of money that will be added through building of works will be about equal. The difference will be that instead of the country's progress being reflected in borrowings abroad, it will be reflected directly in credit created by the Bank of Canada, an agency which belongs to the Canadian people.
Mr. Chairman, I suggest that this makes all the difference in the world, because our progress, the progress of the country, will not be financed any longer by foreign countries or foreign lenders, but by an agency that belongs to Canadians, to the whole of Canada. That is the difference, and I hope that the Minister of Finance, when he introduces the bill, will take those two factors into consideration.
Money must come from credit issued by the Bank of Canada interest free, except for administrative costs, with a view to facilitating the development of the country, so that Canada's development, Canada's progress will not always be dependant upon an ever increasing and continuing debt; it is imperative that our progress, the progress of the country be free of the indebtedness we have known for so long.
Mr. Chairman, if the Minister of Finance wants to adopt those two suggestions-and I think it can be done because, after all, the Bank of Canada does exist for some purpose and the minister can make use of it-he will have full support of our group and we could say that it would be the first measure ever

Municipal Development and Loan Board introduced in this house which would allow Canadians to develop their country themselves, without resorting, for the financing of those loans, to foreign companies, foreign banks or even Canadian banks. That would be progress, that would be the financing of the development of our country by ourselves and not by foreign countries or through foreign loans, and we are convinced that it can be done. At that time, such a measure would allow investors to invest not in municipal loans or in national loans but in the development of the country.
Too often in the past we saw people with capital to invest put it in the debt of the country, through their buying of federal or municipal bonds, instead of taking their money and investing it in the industrial development, in the development of trade and so on. If this government, through this legislation, goes to the Bank of Canada for funds instead of going to the usual lenders, then it will have the opportunity to invest that money in industry, in trade, in the assets of the country.
These were, Mr. Chairman, the two main suggestions which our party wished to make to the Minister of Finance, and we hope that they will be taken into consideration when the bill is introduced.
(Text):


Mr. Martin (Timmins):: Mr. Chairman, a careful reading of the resolution that is now before us leads me to believe that the main purpose of this resolution is contained in the first line of it where it states that it is expedient to introduce a measure to promote increased employment in Canada. Now, far be it from me to criticize this government for any move it may make in this direction. However, it does seem odd to us that they would do so in this particular type of legislation.
What about the needs of the municipalities themselves? Should they not be the paramount consideration in any legislation dealing with municipalities? It would appear that the real needs of the municipalities are, in the main, ignored in this particular piece of legislation. Instead of this government going to the municipalities and saying, "You have some problems, can we help you with these problems?" the government seems to have said, "We have a problem that is of paramount importance and that problem is unemployment. We wonder if we can find some way in which we can get the municipalities to help with our problem?" There does not
[Mr. Gregoire.l
appear, Mr. Chairman, to be any recognition of the federal responsibility to our urban communities. There seems to be no acceptance of the changes that have taken place in our society.
At one time the most of the wealth in our society was in land and real estate, but that is no longer the case. Now, less and less of the wealth of the country is in these fields but they are still the main source of tax revenues for our municipalities across the country. In other words, our municipalities are like our farmers and many other groups in our society, they are caught in this sort of cost-price squeeze. The costs of the responsibilities of municipalities are going up inexorably year after year, but still the wealth which is the main source of tax revenues is to a lesser and lesser extent contained in real estate.
However, Mr. Chairman, before I give the wrong impression to the house I want to say that we in this party welcome this move, whatever the motive may have been. It appears to be a timid little step towards solving a most important need today, that is the need for adequate social capital. The members of this party have, for many years, expressed this need in this house. I do not intend to go into the details of that today. I should like, however, to try to draw attention to just how inadequate I believe this step is. When this resolution was first mentioned, there was a reference to a figure of $400 million. I distinctly got the impression that this would be the sum for a one year period. We were disappointed today to hear the minister say that this sum was to cover a three year rather than a one year period. This means that the amount to be made available in this field is about $125 million per year.
Just how adequate is this sum to meet the need? When we are going to test something like this, we should go to the best source available. I would suggest that one of the best sources available would be the present minister when he was acting in a different capacity. If we look at the final report of the commission on Canada's economic prospects, page 308, the section dealing with social requirements by municipalities 1956 to 1980, we find no less an authority than the minister saying that the need for social capital by municipalities over that period of time would amount to about $31,500 million. If calculated on a yearly basis, this sum would yield about $1,250 million per year. However, when the minister, acting in his present capacity, is finally in a position to do something about solving this problem we find he has cut this total sum to just about 10 per cent of what he felt the requirements

were at the time he made that assessment. It may be slightly over $125 million per year, but I am sure the comparison is a valid one.
Now, reverting once more to what appears to be the main purpose of this resolution, that is to provide additional employment, I may say we have to realize something else. We have to realize that this purpose can only be reached if this money is in excess of what is available through normal channels or is in excess of what is being done at the present time. If this money merely replaces capital that is being used in this field now, then we have solved nothing. It is true that the provision of this capital may be of some assistance to municipalities because it will give them necessary capital at a smaller rate of interest than they are paying at the present time. This will be true, certainly, if this provision for a 25 per cent forgiveness, or whatever term they have for it, goes into effect.
I noticed that during the minister's remarks he referred to the fact that this proposal would increase the capital available by about 50 per cent. I hope that as this debate progresses the minister will explain in more detail just how he arrived at this figure.
There is another matter too that we must take into consideration and I believe that some recognition of this has been given in the resolution by the use of the words "subject to the approval of the provinces concerned".
I think that is a very important matter to consider, especially when we find as we look across the country that many municipalities today are in the position of having borrowed right up to the maximum permitted by their provincial governments. Before the debate is finished I hope the minister will explain to the house and to the country just how municipalities in this position, and there are many of them, are going to derive any benefit from this legislation. However, as I say, there will be ample time and opportunity as debate on the resolution and the bill to follow proceeds to go into these details, so we shall await both the bill and the explanations of the minister with considerable interest.


Robert Gordon Lee Fairweather: Mr. Chairman, there are one or two features of this resolution that I should like to discuss at this stage. The first one, which arises out of the minister's explanation, concerns my own province of New Brunswick. I recognize, of course, that some of the difficulties must be worked out, but the fact is that the legislature of New Brunswick and not any municipal board has the responsibility of approving municipal debenture issues. To apply that problem, and it is a problem, to what the bill, I suppose, will disclose will mean that New Brunswick must wait until the 1964 session of the legislature
11- 1963	ggg
Municipal Development and Loan Board in order that the various funding provisions can have approval. In the minister's timetable, of course, this will mean that an entire year will be lost before New Brunswick municipalities can take advantage of this legislation. It might be argued that the legislature could call a special session for the necessary approvals, but the very fact that it would be a special session would be cumbersome.
The other problem which comes to my mind immediately as one who represents a riding without any large municipalities arises from the fact that the minister has said-I can quite see the reason; it is to dovetail with existing statutes-that sewage disposal and waterworks projects will not be within the ambit of this legislation, neither will hospital construction nor, as I interpreted the minister's remarks-if I am not correct I hope he will correct me-school construction. As I understand the situation, such projects will not be considered under this new $400 million scheme, which will leave the small municipalities hard put to find projects that will fall within the area to which this legislation has application.
Second, and I think this is very important, the great problem of unemployment in Canada today is of a regional nature. As I see the legislation the large municipalities, if I may so describe the great metropolitan areas of Toronto, Montreal, Ottawa, Hamilton, Winnipeg, Vancouver and so on, will be the ones that will have the greatest need for this facility from the point of view of borrowing; and yet, as I interpret the figures and statistics, unemployment is gravest in those parts of Canada that are far removed from these great metropolitan centres. I am thinking in particular, of course, of the Atlantic provinces of Canada.
Another aspect of this legislation which I think is pertinent and should be of interest is that in 1938 the parliament of Canada considered legislation on a more moderate scale somewhat along the lines that I presume are proposed here. I think a review of the debates of 1938, when the then minister of finance, Hon. Mr. Dunning, introduced legislation to authorize loans to assist municipalities in making self-liquidating improvements, will show the very grave concern that some of the great parliamentarians of that day had.
I am thinking now, for instance, of Mr. Cahan and the reservations that he and others had when they were considering the constitutional aspect of that legislation.
In his remarks on the resolution stage of that debate Mr. Cahan said that he wanted to wait until the Rowell-Sirois commission had made its report. I think it is interesting that

Private Bills
in Canada royal commissions, with the greatest respect to the minister, have almost been stepping stones to frustration and in this country we have tended to consider the results of royal commissions almost in isolation. Perhaps it is true to say-
The Depuiy Chairman: Order. I apologize for interrupting the hon. member for Royal, but it being five o'clock it is my duty to leave the chair in order that the house may proceed to the consideration of private members' business pursuant to section 3 of standing order 15.


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



PRIVATE BILLS


Mr. D. R. Mitchell (Sudbury) moved: the second reading of Bill No. S-7, to incorporate the pharmacy examining board of Canada.
He said: Mr. Speaker, the title of the bill, as has already been indicated, is an act to incorporate the pharmacy examining board of Canada. In explanation I might say the purpose of this bill is to establish qualifications for pharmacists, to provide for fair and equitable examinations and to promote, with the consent of the appropriate licensing bodies, the enactment of such provincial legislation as may be necessary or desirable in order to supplement the provisions of the bill.
The powers of the board shall be to issue certificates of qualification in pharmacy; to establish, maintain and revise from time to time a register of all persons who have been granted certificates of qualification by the board; to establish the terms and conditions under which such persons may obtain certificates of qualification, and to establish and maintain a panel or panels of examiners to conduct such examinations.
Nothing in this bill authorizes the board to interfere with, or otherwise affect the rights and privileges of any licensing body under provincial law, and I would suggest to all hon. members that any questions concerning this bill might be raised in the committee on miscellaneous private bills where the legal adviser and the secretary manager of the Canadian pharmaceutical association will be in attendance. I assure the house the bill has nothing to do with the cost of drugs, and is merely to establish uniform educational qualifications across Canada.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on miscellaneous private bills.
[Mr. Fairweather.l


Mr. Jack Mclniosh (Swiff Currenl-Maple Creek) moved: the second reading of Bill No. C-7, to amend the Pension Act (judicial appeals).
He said: Mr. Speaker, since coming into the house this afternoon I have been given reason to believe that the government may refer this bill to the standing committee on veterans affairs. If that be the case may I at this time thank the government for taking such action in regard to a private member's bill. I would also ask all hon. members who intend to speak to be careful that we do not talk it out, because even if the requests which are made through this bill are not implemented, I am sure if it reaches the veterans affairs committee the wrongs we are trying to correct will be fairly heard and action will be taken on them.
Because of the contemplated action by the government I shall cut my introductory remarks as short as possible. I first brought this bill before the house on March 13, 1962. I may have been very harsh in my words at that time and perhaps, because of the proposed action of the government today, I should temper them somewhat.
The purpose of the bill is set out in the explanatory notes where they say:
The purpose of this bill is to give an applicant for a pension under the Pension Act the right, where the pension commission or an appeal board has ruled against his or her entitlement, to have the decision reviewed by the courts-
-first on questions of law and second, on controversial issues of fact.
I understand there is a principle of Canadian law which states all members of the public have a right of access to the courts to determine their rights under the law. In this particular case the Pension Act is the law, but a veteran does not have that right under it. He cannot appeal to the courts. The present Pension Act denies that basic principle to a veteran, and denies him that right which all other citizens have.
When I first introduced this bill last year I stated:
The bill applies to the Pension Act that principle of the rule of law that, to the degree most possible, the decisions of an administrative tribunal or commission which touch the person, property or rights of an individual should be subject to review by the courts.
The United Kingdom has applied this rule of law to as many of its boards, tribunals and commissions as possible in the tribunals and inquiries act, 1958. The British parliament found it was necessary to protect the rights of the individual by guaranteeing an appeal to the courts from arbitrary tribunal decisions.

It is obvious that the intent of the Pension Act was to protect service personnel against the risks to which, by reason of their service, they were and are exposed. I do not believe the act should give the pension commission the right to substitute its views for the intent of parliament, but it has done that. I would like to read two sections of the Pension Act which, to me, take away the intent of parliament. First I refer to section 5(5) and this is what it says:
The commission shall determine any question of interpretation of this act and the decision of the commission on any such question is final.
In other words, it does not matter what parliament put into the act, it is how the commission interprets what we put into it that counts. I suggest here and now that if under section 70, the benefit of the doubt section, one of the controversial sections in the act, a veteran could appeal, not necessarily to the courts but to some commissioner or ombudsman, as he is called, I am quite sure he would have a just decision.
I also refer to section 65(3) which reads as follows:
Except as hereinafter otherwise provided, every decision of an appeal board of the commission is final.
That is quite definite and I say those two sections are contrary to one of the basic principles of Canadian law, namely that each subject should have the right of access to our courts to determine his rights. The right to appeal to our courts, by the veteran applicant, is taken away from him by section 5 and section 65(3).
Parliament in its wisdom, and at the request of the courts, enacted legislation known as the Interpretation Act, which should have been a guide to the pension commission and which is supposed to apply to all our laws with the exception of criminal laws. Section 15 of the Interpretation Act was inserted on the basis that the law as it existed perhaps did not do justice to some person or group of persons. Therefore parliament gives the person or persons affected a right, and a remedy, before the courts of the land.
By the inclusion of section 5 and section 65 in the Pension Act, veterans and veterans' dependants do not have the protection of anyone. They have not even got the protection of parliament at the present time. I believe the average individual citizen feels that he or she ought to be able to challenge, before some independent and impartial third party, any adverse decision made against him or her by a government official or a body of government officials, but this right is denied to our citizens donning any uniform of our armed services in the event that they 28902-5-58
Pension Act
have a pension claim. They are not guaranteed their rights against an arbitrary decision of the pension commission.
We must admit the Pension Act as it is now on our statute books is law, but many of us do not believe it is just law. Law and justice are not the same thing. I would suggest the Pension Act, as it now reads, is not good legislation and I do not believe it intended to give so much power to a tribunal as it apparently has given to it. A review of parliament's intention can be determined by reading the debates in Hansard when the Pension Act was passed and subsequently amended from time to time. However the real test of any legislation is in its administration, and this to me is where this act particularly appears to be discriminatory. I am informed by the pension commission that when it makes its decisions it is governed by precedent. Some of us may think it should be governed by common sense. A review of some of the decisions handed down by the board will bring to light the ridiculous use of the word "precedent" by the pension commission. There is no consistency in the reasons for the decisions handed down by the board, and what they call precedent has no rhyme or reason. To illustrate my contention that there is no precedent governing the decisions of the board and that their findings are discriminatory, I would ask the house to compare a few reasons or decisions handed down by the board in order to see how narrow and small are some of them. I would refer hon. members to a case to which I referred in March of last year, when I said this:
I would refer hon. members to the evidence of the vice chairman of the Canadian pension commission, as recorded on May 18, 1961 in the minutes of proceedings on veterans affairs. Referring to one case, the reason for the decision was as follows:
"He went across the street and delivered the message, stepped out of the door and was hit by a truck. If he had been hit going in the door, before he had delivered the message, he would have been pensionable; however, he was hit when he went out the door, and he was not pensionable."
More liberal decisions have been made, I admit, by the pension board when the service personnel concerned were not even on duty. I would refer the house to one other case as an example. This was in regard to an R.C.A.F. man killed while flying for a civilian flying club. I will not reveal the name but I would just refer to this case. This is the decision handed down and the reason for granting a pension:
This board, after a comprehensive study of all the circumstances attendant upon this case, concluded that the applicant, although not on duty at the time of the fatal accident was by his efforts making a contribution in the best interests of the Royal Canadian Air Force. Service compulsion does not appear to be involved in this case, but the interests of the service would appear to be so.

Pension Act
Invoking to the full the provisions of section 70, it is therefore concluded that the accident causing death was directly connected with regular force service in peacetime.
I would point out that another contentious passage in the Pension Act, as many veterans know, is section 13(2). The last line of that section reads-
-arose out of or was directly connected with such military service.
It does not seem to be very difficult for most of us to connect an accident with either of those provisions, but I would ask hon. members to try putting a case before the pension commission and see how far they get with this section or section 5(5), because the interpretation of the act is entirely a matter for the board. We have cases where a pension has been given to a serviceman on leave, and I have one such case here:
The man was on leave just prior to discharge. He was ordered to report to Ottawa for discharge. Returning from leave to report, he crashed into a standing bus, suffering chest injuries which resulted in permanent disability.
He was given a pension. I would also suggest that when an applicant engages the services of a prominent lawyer his chances of a favourable decision are greatly increased. The appearance of a prominent, qualified lawyer seems to influence what I maintain is an unqualified board, in the realm of interpreting the law. I have another case here which I imagine deals with a sailor who was on leave at the time. I am not going to read all the facts, but he had a gunshot wound in the back as a result of being in the path of a robbery. This is the decision handed down by the board:
The facts of the case are not in dispute, the only issue being, did the incident arise out of or was it directly connected with peacetime service. The undersigned were impressed-
I would ask the house to listen to this passage. The "undersigned" were the board:
The undersigned were impressed with the learned counsel's argument and conclude that whereas the sequence of events leading up to the injurious accident cannot be classified as entirely peculiar to military service-
And so on.
However, they did grant him a pension under section 70. I do not deny the fact that in the last three cases to which I made reference these people were entitled to a pension, but the decisions and results are very difficult to relate to the first case that I mentioned, where the chap went in the door and delivered the message, came out of the door and was hit, and the pension board decided that if he had been hit going in, he would have been pensionable, but as he was hit coming out, he was not pensionable. How does one explain that to an applicant?

To me and to the dependants in this case it would seem there is strong evidence for the charge of discrimination. I am reminded of a recent editorial which appeared in one of our local newspapers commenting on the Gordon Knott case, which was debated in this house not too long ago. I am not going to read the whole editorial, but shall read part of it. The article is headed "There should be a right of appeal" and states:
It is when action is taken in secret, and without the chance of appeal for the redress of grievances, that the possibility of mistake, injustice and arbitrariness may become serious.
Later on the article says:
It would seem desirable that some method of appeal against arbitrary action should be found-
That is what I am suggesting in connection with the Pension Act. If the house will not pass this bill or the government will not take steps-although I hope that they will take steps-to amend the present act, I hope they will give consideration at this time to appointing what is commonly known as a special parliamentary commissioner, or, as I said previously, an ombudsman, a person who could investigate these complaints and bring them to the attention of those on the treasury benches or some supreme authority which would act on them.
I intended, Mr. Speaker, to say something about section 13(2). I also wanted to tell the house about the support I have received for this bill from many Legion branches across Canada. I would also say that if this bill were accepted, the pension commission could itself appeal to the courts regarding the interpretation of the law. However, as I have asked hon. members to desist from talking too long perhaps I had better sit down myself. I wish to thank the government for the consideration I hope they will give to this bill by referring it to the veterans affairs committee, at which time I will have more to say.


Mr. L. T. Pennell (Branl-Haldimand):: Mr. Speaker, I welcome the introduction of this small but not unimportant bill. At the same time I can assure the hon. member for Swift Current-Maple Creek (Mr. McIntosh) that I shall compress my remarks into a narrow compass. As I understand the bill-if I may make a few general observations-its underlying principle is to maintain public confidence in our tribunals and commissions by making sure that under proper circumstances there is a right of appeal to our courts of law. There is a growing concern among the public that as our life has become more complicated, we are subjected more and more to the restrictions of commissions and tribunals; that there is an encroachment upon private right and private interest. This danger

was exposed as long ago as 1929 by Lord Hewart in his book "The New Despotism". I do not suggest for one moment that the introduction of tribunals and commissions ipso facto leads to a restriction of private rights; on the contrary, many commissions have extended private rights. However, the danger of the collision between the private right and the public interest is always there and in this somewhat uneven fight I respectfully suggest that it is essential that in proper circumstances there should be a right of appeal to our courts of law.
This bill contains, in my respectful opinion, the seeds of three good principles. In the first place, it would mean that an unsuccessful applicant would at least be assured that he has had a full and careful consideration of his appeal. If this recourse is denied to him, as it is now, it means he has been judged by a commission consisting of appointees of the minister. The danger of this situation is that an applicant may feel he has come up against a blank wall of unfettered ministerial discretion. If he were granted the right of appeal and, again, this would only be by leave, he would have the feeling that careful and unbiased consideration had been given to his petition.
The next point I wish to raise is this: without casting any reflection whatsoever on the present commission which has, I believe, done outstanding work and provided a speedy way of exercising the rights of individuals, I believe it is fundamentally true that whatever tribunal or court is rendering a decision, if it is aware that there is another court above it to pass on what it is doing, it automatically gives more careful and anxious consideration to the matters before it.
The third point I wish to make is this: I feel it is imperative that the work of all commissions and tribunals should from time to time be reviewed by our courts. I realize that when an application is successfully made for leave to appeal, the court of appeal would be dealing only with one individual case. But such a situation often leads to the entire mechanism of the tribunal or commission concerned being brought before the scrutiny of the appeal court. These things are fundamental to the proper working of a democracy.
I am somewhat concerned about the proposed section 68A which grants both to the individual and to the commission the right to apply for leave to appeal. Looking at section 68A(1) (c) it appears that this would cover a case where the commission would be appealing an award to an individual on the ground that it had been obtained by fraud or misrepresentation. As I understand the proposed amendment it would appear that 28902-5-58i
Pension Act
application for leave to appeal in these circumstances would be an ex parte motion. In other words, the individual concerned would not be present at the application. I respectfully suggest that when the commission is taking steps to withdraw a pension from an individual that person should be entitled to be heard and to make representations at the moment when application is made for leave to appeal. This is a matter which concerns me seriously and I suggest that the procedure in connection with leave to appeal should be spelled out in detail in the bill.
With these words, I shall conclude. As I say, I welcome the bill and I trust it will be dealt with expeditiously.


Horace Andrew (Bud) Olson: On behalf of the Social Credit group in this house I should like to inform you, Mr. Speaker, and the hon. member for Swift Current-Maple Creek (Mr. McIntosh) that we shall give qualified support to this motion, the qualification being that we should like to give the measure detailed examination in the standing committee on veterans affairs, a proposal which I am sure will be completely agreeable to the hon. member.
It would be impossible to deal with all the amendments proposed to the Pension Act as set out in Bill C-7 during the short period we have available this afternoon. I do not wish to go into a lot of detail at this stage, but as I say we would hope this measure could be referred to the standing committee where there would be an opportunity to scrutinize closely the present act for any weaknesses it may contain, and see whether the proposals which are made in this bill would correct them.
We agree with the hon. member who sponsored this bill, that there are instances where it appears that veterans have been treated unfairly by the board. I am sure almost every member of this house has received representations from time to time complaining that applicants have been treated unfairly. As has been pointed out, in most of these cases one is really up against a stone wall in trying to have justice given if the board feels it has not made a mistake.
So, without taking much time, I just want to say we would support a motion to have this bill referred to the veterans' affairs committee in order that a more detailed investigation by way of the cross-examination of witnesses and so on might be made. Some further amendments additional to those suggested in the bill might be necessary after we have had the opportunity to conduct this cross-examination but, again, we are agreeable to supporting a motion to send this

Pension Act
measure to a committee in order that this complete examination might be carried out.


Mr. John R. Maiheson (Leeds):: Mr. Speaker, in rising to contribute a few comments on this bill I wish to say I admire its sponsor, the hon. member for Swift Current-Maple Creek (Mr. McIntosh) and the way the bill was presented so forcefully in the last parliament. I refer to the hon. member's address delivered on March 13, 1962. He has indicated his belief that the bill now before us is the solution to this problem, just as he did when the government of which he was a supporter was in power. He put the measure forward forcefully and well. A number of us have had an opportunity to examine the reactions to the bold presentation he made at that time.
I do not think there is much dispute about the fact that there have been decisions which we find hard to accept and hard to understand. The hon. member indicated how ridiculous it was that a decision could give one result when a man went across the street to deliver a message, and another should he be hit while he was leaving the door. This is not the only case of this sort. There have been a number of cases where the pension commission has reached conclusions which we find hard to accept. But there is another problem here, one which I think we must consider without doing violence to any of the sentiments uttered by the hon. member. I think he is presenting the case from the viewpoint of the lawyer. This is almost the kind of presentation one might expect to receive from the Canadian Bar Association. Characteristically lawyers tend to think that the best solution lies by the process of appeal. It is easy for me to understand that point of view.
As parliamentarians, however, we have sometimes to divorce our thoughts from our vocations and recognize that as government has developed and as legislation has become more complex over the years, a large number of administrative tribunals and bodies having judicial or quasi-judicial powers have come into being. I think it could fairly be maintained by a student of political economy that the bill now before us, an attempt to amend the Pension Act by providing for judicial appeal, is in principle retrograde. It represents an attack on the whole modern concept of administrative law, which indicates that there are certain problems sufficiently specialized as to call for detailed technical evidence. In this case, the case of pensions, we are largely concerned with medical cases. Often times there is need of speedy decision. We are faced with the likelihood of claimants frequently being without 
resources and unable to support the lengthy and costly process of appeal. Also, these pension decisions deal with questions of fact as well as with law, and in a manner sometimes very difficult to distinguish. It is this combination of facts and law which sometimes renders an administrative tribunal precisely the right kind of place to hear this peculiar type of claim.
I am sure that many of us in this house have had cases where we have taken issue with the workmen's compensation board. In my own case I have in mind the board in Ontario. Yet if we look at the literature on the subject throughout the world we find that our workmen's compensation act has been cited as a model. It would appear to students of this legislation who have studied it in depth that the act provides solutions and quick justice for people, a situation which, I say regrettably, cannot always be obtained through our normal processes of litigation. It is suggested that an appeal to the courts or some of these tribunals would be retrograde in the sense of being time-consuming, and one can suggest to this house how timeconsuming it might be if we had to appeal to the court of appeal of a province or to the Supreme Court of Canada. It becomes, of necessity, a process which is costly, and in all likelihood cumbersome. We all know that courts often tend to be overloaded, which might very easily lead to further delays. The way in which our courts dispose of their business illustrates a great inequity in work loads in different courts in different parts of Canada.
Then, judges do not always have that intimate knowledge and understanding of the type of case which presumably would come before the pension commission. We might have a situation where the court of appeal of a province makes a wise and sensible decision, and yet another court of appeal in another province which might have had virtually no experience in this type of legislation on the same facts might come to a very poor decision. I do not know what the answer to this is. As I say, the approach of lawyers, individually and collectively and certainly of the Canadian Bar Association would be that we should always have appeals. I think there would be large support for the submission of the hon. member that decisions should be reviewed, and that there should be a tribunal or some other body which can re-examine the case. Yet in the matter of pensions I think experience has tended to prove that certain classes of pensioners have been very fairly treated indeed. I think it is the consensus among veterans that servicemen of world war I and world war II are getting a good hearing

before the pension commission. That is because of the insurance principle. It has been said that all a man has to establish to become pensionable is that he was there.
It seems to me, from what I can judge and inquiries I have been able to make, that the complaints lie largely with the type of case referred to by the hon. member, that of the permanent force soldier, sailor or airman who is not accorded this same protection, and who must establish that his injury arose out of, or was directly connected with, military service. The hon. member has referred the house to section 13(2) of the Pension Act. At the moment the pension board consists of 13 members three of whom are lawyers. In my opinion there are not enough lawyers. Perhaps we have too many lawyers in some places, but I believe there are not enough on the pension commission. It is precisely the kind of case referred to by the hon. member which, I think, has thrown confusion into the decisions of the pension board.
I was particularly concerned about the case of a nursing sister, a sublieutenant in the Royal Canadian Navy, who came before the appeal board in December 1959 with regard to the accidental fracture of her right tibia and fibula, and who received an adverse decision. She was serving at H.M.C.S. Cornwallis, as a hospital operation room nurse and was the only nurse detailed. She was required to stay in the north block and eat in the wardroom, and had to be on the station. This nursing sister was subject to emergency calls at any time. She drove her car, which she had tacit authority to use, from the barracks to the wardroom before reporting to the hospital for normal duty. She parked her car, went towards the wardroom and slipped on a very icy, unsanded surface. This attractive young lady with a fine career before her suffered very serious injury. One of the most powerful and influential members of this house at that time, the hon. member who represented Dufferin-Simcoe in the last house, and who certainly, it would be supposed, would have had the ear of the government, exercised himself on her behalf to see that her case was fairly and well put before the commission. I know this was done, because of the interest of this hon. gentleman of unusual parliamentary experience and ability. Yet the pension commission came to the decision that the incident did not arise from military service. The fact that she had to have her breakfast before reporting to the hospital and had slipped on a very icy surface at H.M.C.S. Cornwallis apparently did not commend itself to the members of this commission, who I think were laymen. They decided that the injury did not arise out of her military service.
Pension Act
Mr. Speaker, what is the solution? I think the solution has been suggested by the hon. member who presented his case so well today. He spoke of the possibility of a parliamentary commissioner, or ombudsman; or, if I may refer to a bill I have on the order paper, a people's tribune. But surely there should be, not only for this kind of case but for a whole variety of cases resulting from decisions arrived at by administrative tribunals, some recourse in extraordinary cases where a claimant could put his particular set of facts before such an officer and as a result perhaps have a new opportunity to present his case.
In my opinion, just as in the sad case to which my hon. friend from Swift Current-Maple Creek (Mr. McIntosh) referred, I think the Chambers case should be named where a young serviceman died on November 18, 1957, and the appeal board hearing took place on May 12, 1959. It does not seem right that that tragic result should occur without some kind of solution or remedy being provided for the dependants. Surely we are not satisfied with this kind of conclusion. Yet, Mr. Speaker, over the past few years we have had as the best advocate, I submit, for servicemen both of world war I and world war II, and also for members of the permanent force, the Royal Canadian Legion. Certainly we must pay close attention to the Legion when they address themselves to problems relating to pensions. This is something they know a great deal about.
I should like to refer the house to The Legionary of July 1960, which contains a report of the resolutions committee of that year. On page 15 of the report there is a heading entitled "Explanation of Appeal Provisions", and the text reads as follows:
At the Edmonton convention it was resolved that the dominion executive council bring in a report for the next dominion convention on the desirability of establishing an appeal from the pension commission to an independent authority. This resolution was referred to the members of the veterans welfare advisory committee, who made an extensive study of the problem and considered the opinions of a large number of people with first-hand knowledge of the circumstances and background of the whole matter. This committee reported to council through its chairman, comrade Mervyn Woods, to the following effect:
1.	The present legislation and procedure is basically sound and the establishment of an appeal board would not serve to advance the interests of the veteran.
2.	There are a number of ways in which the commission may improve its operations and bring them in line with the intent and purpose of the statute under which it is established. These include:
(a) Use of section 8 to make regulations in respect of procedure to be followed instead of allowing unwritten policies to have the effect of regulations without the knowledge of those to whom they apply.

Pension Act
Then, paragraph (b) refers to the proper use of the benefit of doubt clause. I shall not read any further, but hon. members who are interested in this submission could refer to The Legionary and consider the report of this resolutions committee of the Royal Canadian Legion.
I am not satisfied that any committee is always wise. I am sure that the hon. member has brought forward a very important point. There are cases in which the decisions are clearly unjust, unreasonable and not sensible at all. In so far as the two cases to which reference has been made are concerned, I do not believe these were fair conclusions, having in mind the kind of conclusion that lawyers would have expected to arrive at before a civil court under similar circumstances. I believe that if either of these cases had come before a civil court and had been heard on appeal, there would have been a different kind of decision.
From what little I have been able to determine in connection with some of these cases- and as outsiders we cannot discover too many details-I believe there have been cases in which the commission has been confused between its duty on the one hand to the applicant and, on the other hand, the need to protect the public purse.
There is another problem, and it seems to me that this is inherent in the report that was handed down by this resolutions committee as reported in The Legionary of July, 1960. I am told that years ago there was an appeal process. I am told that soldiers and some experienced veterans who have been doing work for veterans groups over the years came to distrust the appeal procedure. Their experience has indicated that, on balance, the appeal procedure did not work too well for the veteran. After all, if the applicant for a pension can appeal, it seems only proper that the crown likewise can appeal. I believe that most of us feel that, in many cases, the pension commission have winked their eyes a little at factors that might not have been too helpful to the applicant in order that the commission might render an equitable and generous verdict. The fact that we are private members of parliament places us in a position where we are addressing ourselves frequently to this kind of problem. We understand the problems of our constituents, and applicants who have a very reasonable case to put before the government. On the other hand, we know that the public purse has to be protected against unfair claims.
I feel, therefore, that the solution is not to be found in this particular bill. We respect the hon. member who introduced the measure. We know that he has been a champion
[Mr. Matheson.l
of the veteran. He has this reputation not only in his own province but across the country. He has done the veterans a service in throwing light on the inequity of some decisions handed out to some applicants. It seems to me the solution to the problem lies in some other remedy than the one provided in the hon. member's bill.
If one looks over the private members' bills presented to this house, he finds that basically there are two things about which members are thinking. There seems to have been a great deal of concern about consumer credit, and the second most important thing, if I read these bills correctly, is the need for some kind of adequate protection against the inequities if not injustices that result from decisions of administrative tribunals. Sometimes the members of these tribunals are trying to follow the legislation as fairly as they can. They cannot help it if the result appears to be unfair.
It is clear that, in so far as the cases referred to are concerned, the commission tried to follow the precise wording of the legislation. I hope the answer to this problem may be found during the twenty sixth parliament in which no party is in a position of dominance. Perhaps by working together we can come up with a solution by providing for a people's tribune, ombudsman or something of the sort, and thus allow some kind of reconsideration of these decisions.


Mr. Speaker:: Order; I am sorry to interrupt the hon. member but his time has expired.


Herbert Wilfred Herridge: Mr. Speaker, I wish to speak briefly on behalf of this party. I intend to be brief because I understand there is another member who would like to say a few words.
First of all, I want to congratulate the hon. member for Swift Current-Maple Creek (Mr. McIntosh) for his sincere and continued interest in the welfare of veterans and their dependants. He has brought these matters to the attention of the veterans affairs committee. He has discussed them with members of other parties. The results of his industry are indicated by the introduction of this bill last year and its reintroduction this year. We know that the hon. gentleman is introducing his bill with the idea of doing something to correct a certain situation he considers exists under the present law.
However, let me say this: While we are sympathetic to his purpose I think we should tread cautiously in respect of this type of legislation. The previous speaker mentioned the workmen's compensation act. I am sure he will be interested to know that British Columbia was the first province in Canada to have



II. 1963

[Stage Direction]
a workmen's compensation act because the labour organizations in that province pressed for that very strongly from the early days of this century. However, those who have been interested in the administration of the workmen's compensation act in British Columbia, and in other provinces, have also been interested in proposals made from time to time for the right of appeal to the courts against decisions of compensation boards. Invariably, after consideration by various labour organizations and other persons interested in the best procedure to provide the best results, they have come to the conclusion that they were safer to leave their cases in the hands of the workmen's compensation boards. In many instances, the companies have much more money than the workers or the trade unions. This has been the experience of those interested in this type of legislation under compensation boards which have to do with civilian casualties, just as this legislation has to do with the casualties of war.
Now, this matter has been discussed by the various branches of the Royal Canadian Legion and other veterans' organizations. I understand that the matter was discussed at the last convention, but to date the Legion has not taken any position on this question. I think it is fair to say that they are interested in all proposals. I do not think it is necessary to take the time to go into the arguments for and against this bill, particularly since I heard the hon. member who introduced the bill mention the fact that the government was quite willing to have it referred to the standing committee on veterans affairs. I think the subject matter of the bill should be referred to the standing committee on veterans affairs where we can have witnesses called before the committee, where we can get the opinions of the representatives of the veterans through the Royal Canadian Legion and through other veterans organizations, and hear the pros and cons as the result of weighing the evidence and as the result of experience. I suggest that would be the best way to deal with this quite important question at this time. After hearing evidence the committee could then come to conclusions and make a report to the house on this very interesting bill. With these few remarks, Mr. Speaker, I conclude.
Mr. Bernard Pilon (Chambly-Rouville):: Mr. Speaker, in so far as the bill is concerned my observations will be brief. In principle it is highly acceptable. I should like to underline the very true observation made by the hon. member for Swift Current-Maple Creek (Mr. McIntosh) when he stated that law and justice are not similar. Permit me to continue in French.
Pension Act
(Translation):
The principle in itself is quite acceptable, however, we should not question the decisions of the commissioners who are incidentally fully qualified veterans with a deep knowledge of the act; however, they are not infallible. Many cases have been brought to their attention but perhaps they have not always rendered wise decisions. The veterans' associations, the Canadian Legion in particular, of which I am a member, as well as other people who take interest in the welfare of the veterans and their dependants, still study the principle and the object of the bill now before the house, supported already for quite a long time by the officialdom.
Talking of officialdom, as the commissioners of the Pension Act are directly concerned only with that particular legislation they may be inclined to act as a mere machine.
In the first place, we should consider the possibility of amending the act;
Second, we should get legal opinions from the Department of Justice;
Third, we should refer to legal precedents;
In the fourth place, we should know the views of veterans' organizations.
As for the privilege of appealing to a higher court, which is legitimate in itself, but should be permitted only as a last resort, when all other means available for the individual concerned have been tried, it is obvious that it would be an additional means of furthering the welfare of our veterans. As the hon. member for Kootenay West suggested, I am of the opinion that this bill should be referred to the committee on veterans' affairs.
(Text):


Hon. J. Waison MacNaughi (Solicitor General):: Mr. Speaker, I move, seconded by the hon. member for St. Denis (Mr. Denis):
That this bill be not now read a second time but that the subject matter thereof be referred to the standing committee on veterans affairs.


[Stage Direction]
Amendment agreed to.
Motion as amended agreed to.
John Watson MacNaught: Mr. Speaker, I think it would be unfair to call any more public bills now so I suggest that you call it six o'clock.


Mr. Speaker:: The hour appointed for the consideration of private members' business having expired, the house will resume the business which was interrupted at five o'clock.

Municipal Development and Loan Board MUNICIPAL DEVELOPMENT AND LOAN BOARD



PROVISION FOR FINANCIAL ASSISTANCE TO MUNICIPALITIES

[Stage Direction]
The house resumed consideration in committee of the following resolution-Mr. Gordon-Mr. Batten in the chair.
That it is expedient to introduce a measure to promote increased employment in Canada by the provision of financial assistance by way of loans to municipalities, the object of such loans being to enable municipalities to augment or accelerate their capital works programs subject to the approval of the provinces concerned; and for this purpose to provide a special fund in the consolidated revenue fund not exceeding four hundred million dollars to be available for the making of loans to municipalities and certain other municipal authorities for specific municipal capital works projects; to establish a municipal development and loan board to administer the fund so provided; to authorize the acceptance of municipal debentures for any loans so made; to authorize a measure of forgiveness in respect of any loans so made, depending upon the date of completion of the projects for which such loans are made; and to provide further for other related and incidental matters.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at 8 p.m.
Robert Gordon Lee Fairweather: Mr. Chairman, that burst of applause from a packed house gives one a great deal of confidence and desire to continue this debate. At five o'clock, when I was saved by the bell, I was expressing concern about the fact that the large metropolitan areas would gain most from the proposed legislation that we are considering by way of this preliminary resolution. Yet, I think it is correct to say unemployment is highest in the less settled areas.
I think it is right to say the minister this afternoon suggested the priority which the government has given to the introduction of this resolution showed it to be one of the most important decisions of the much heralded program for action; but is it not interesting that this veritable keystone in the attack on unemployment should take the form of new borrowings by the municipalities? This is a fact, no matter what the forgiveness provisions, write-offs or other lures may be. I suppose we have to admit that almost every new program devised by government has the effect of increasing taxes, but I suggest the scheme proposed by this resolution is more cleverly indirect and obscure than most. Perhaps this is symbolic of our age, that the public can be so easily seduced by high-sounding policy statements.

Obviously all responsible members of parliament have a duty to consider carefully any measure that has as its objective increased employment, and a fair debate on any measure to increase employment would have to cover those helpful plans of the former government. I am not going to fall victim to my own advice by listing the achievements of another government, but there is one I want to mention as an example of what I call the creative use of money.
The shipbuilding subsidy program has meant a great deal to my constituency, and I might mention my constituency is what the textbooks of the twentieth century call the bedroom of the urban areas. It is where the workers who labour in the cities live. When I mention that program I am thinking of the Saint John Shipbuilding & Drydock Company which, within a period of a few years, has advanced from a couple of hundred employees-just a skeleton staff-with old worn-down equipment, to a firm employing about 2,800 people. This is largely, but not entirely, due to the shipbuilding subsidy program, and is also due to the initiative and drive of the present chairman of the board.
This program appeals to me because it uses federal moneys creatively. I only hope that on Thursday the Minister of Finance will catalogue other programs of this creative type, and this leads me to the hope and expectation that the capital projects approved by the board contemplated in this resolution will fall largely into what might be called creative social capital schemes. The only trouble is that when we start talking about social capital my hon. friends to my left, in a literal but not in any other sense, place upon the expression other meanings. They include wonderful testimonials with coloured water, which enlightened Canadians via television during the last election campaign.
As I mentioned at five oclock, Mr. Chairman, this is not new legislation. In 1938 parliament passed an act to assist municipalities in making self-liquidating loans. I am not going to go over that ground; but parliament was then, as it must be now, concerned about the constitutional aspect of the legislation, and the interesting thing in 1938 was that the device used provided that the provinces should guarantee all loans approved. This was an interesting device to avoid a constitutional problem, because surely it was redundant to have the provinces guarantee loans already granted by the federal government?	.
I am also interested in the formula which the proposed board will use in approving loans. Will it be the same as in 1938 on a per capita basis to the amount of the loan? That is, will the aggregate amount of loans

to a municipality be proportionate to the $400 million which the population of that municipality might bear to the population of Canada? There will be some interesting juggling and pressuring, if pressuring is a word we are entitled to use in parliament. If there is not some fair and equitable system of sharing, then the fund will be quickly gobbled up by the large metropolitan areas.
Recently I was reading the catalogue of projects the municipalities have already proposed. I think they are up to $180 million. We are only at the resolution stage of the bill and we have not yet heard from Her Worship, the Mayor of Ottawa. May I again remind the house-and this is the danger I find myself in as a representative of one of the extremes of Canada, not a political extreme but an extreme of unemployment- that this legislation is designed to help the larger cities of Canada, and it will not really touch the grave problem of regional unemployment. Smaller cities and towns will not benefit because of the restrictions placed on the projects. Sewerage, hospitals, and slum clearance projects are all excluded because they are covered by other legislation, and presumably expressways, roads, streets and sidewalks will be the basic items of interest to all but the larger municipal areas.
Just because the house is slowly filling up I wish to give it the benefit of my own white paper. I have issued a white paper and have been assisted in this by the Canadian Federation of Mayors and Municipalities. I have done this because I do not think any consideration of a resolution such as this would be complete without a white paper. I have two tables; I am not going to file them but I shall read them.


Mr. Macdonald:: File them.


Robert Gordon Lee Fairweather: No, I am not going to file them.


An hon. Member:: Dispense.


Robert Gordon Lee Fairweather: We could easily dispense with the Secretary of State, Mr. Chairman, but not with my tables. If he will resume his seat and pay attention I will give him the benefit of this statistical analysis. Table A is the outstanding net debt, direct and guaranteed, of municipal governments. This is in millions of dollars. Nineteen sixty one, estimated $4,570.2 million. That is a net increase of $360.8 million. I am going to skip some of these figures because the Secretary of State has asked me to dispense with reading them and I would like to co-operate with him. I am going to pick out various years. For instance, 1958, $3,380.7 million, a net increase of $397.5 million. This is interesting because it is within a very few thou-
11. 1963	909
Municipal Development and Loan Board sand dollars of the total amount this government is going to add to the funds that are to be used to face the grave crisis of unemployment. I think this statistic proves the point that other speakers will surely make, that this amount is most inadequate to face this problem.
Even in 1955 the outstanding net debt of the municipalities was $2,328.4 million and that year there was an increase of $259.9 million, well over half the amount that this generous government is adding to the funding of municipalities. Just so there will be no doubt as to the authenticity of my figures, I would point out that they are taken from the Bank of Canada statistical summary supplement of 1961.
Then, because the Secretary of State has expressed interest in having both tables, I am going to give him table B, which is the municipal direct and guaranteed bonds. This is interesting because it covers a series of new issues by municipal governments over the past few years. Perhaps I will save the time of the house by giving the net new issues. This is interesting because you have the gross new issues delivered in each year, and then you take the retirements from that and get the net new issues, in case anybody doubts me. In every instance they are well over half the amount that is projected in this legislation; in many cases they are almost three quarters of the amount of new capital projected in this legislation. This summary is taken from the February, 1963 supplement to the Bank of Canada statistical summary. I am trying to indicate, of course, that the $400 million is going to be used up before the Secretary of State has had time to blow his nose; or is it sneezing that is the new device the present government uses to explain our problems?
In its submission to the royal commission on banking and finance last October the Canadian Federation of Mayors and Municipalities referred to forecasts made. I am sure they are accurate because they were made in 1957 by the Gordon commission. Emphasizing that no provision was made for mass transit and commuter railway facilities, nor was there any apparent inclusion for the municipal costs of urban redevelopment, the federation brief continued with these words:
Despite these omissions-
And they are basic:
-the commission estimated that by 1980 social capital expenditures will be required in Canada to the amount of $19.5 billion for roads and streets; $4.2 billion for school and universities; $2.7 billion for hospitals; $2.7 billion for sewerage systems; and $2.4 billion for waterworks.
910	HOUSE OF
Municipal Development and Loan Board
The total estimate of capital expenditures on these items alone amounts to $31.5 billion. The greater part of these expenditures will devolve upon municipal governments.
If there is validity in these estimated figures-and, with great respect, I suggest there is because they were made by so distinguished a person-then by 1980 the aggregate municipal debt of Canada for these purposes will have soared from its present approximate $4 billion to a figure somewhere in the range of $20 billion to $25 billion. Even if it is only half this figure it will be a staggering amount; in fact, so staggering that any further consideration of it on my humble part would be superfluous.
May I say that I hope the minister will assure us that emphasis and priority will be placed on loans to areas with high unemployment. This to my mind is the only formula that would be proper, the only formula that would fulfil the much heralded Liberal promise and the only formula which would in any way do what the resolution says it will do, that is try to meet the unemployment problem. If this is the yardstick the minister proposes-that is, the yardstick of area and regional help to try to solve unemployment- and if the capital funds are not swallowed up entirely by the great metropolises of Canada, then I suggest the legislation will be beneficial to Canadians. But without that assurance I will have to reserve judgment as to how I will vote on the resolution and the bill.
(Translation):


Paul Raymond Martineau: Mr. Chairman, first of all, as this is the first time I have the opportunity of addressing you since you have occupied the position of chairman, I hope you will bear me no grudge if, as a former colleague at the University of Ottawa, I express all the satisfaction your appointment gave me, as well as your many friends.
I wish you great success in the discharge of your responsibilities, which you are already doing with so much distinction and competence.
I would also like to take this opportunity to ask the Minister of Finance (Mr. Gordon), who introduced the resolution, a few questions. He tried to justify its usefulness by stating that this was a remedy, and one of the main remedies, which the government had to offer to reduce unemployment, i.e. a palliative against unemployment, but I wonder if the end actually justifies the means.
Does not the project basically encroach upon provincial jurisdiction, even if the provinces give their nominal agreement? With regard to this matter, what guarantees does the minister give us? None, so to speak, and the Prime Minister (Mr. Pearson) does not
[Mr. Fairweather.J

give any either, if we consider the very weak answer he gave the Leader of the Opposition (Mr. Diefenbaker), this afternoon, when he suggested that he would convene a federal-provincial conference on the matter. Now, Mr. Chairman, we do not even know if there has been any consultation with the provinces in this respect.
Have there been any discussions on this matter? Has there been any exchange of correspondence between the central government, that is the Minister of Finance, or some of his colleagues, or even the Prime Minister, and the heads of provincial governments?
Does the minister really intend to table in the house the correspondence putting forward views on the project which is now before the committee? And if there has been consultation, did it have any bearing on amendments to be made to the municipal code, in other words, the cities and towns act of the province of Quebec, to enable the municipalities, which I trust everybody in this house will agree, are subservient to the provinces, owe their existence to the provincial government which created them in such a way that, in any respect, they come under provincial jurisdiction.
For instance, was any consideration given to the borrowing capacity of municipalities, because unless I am mistaken, there are in the municipal code provisions on the borrowing power of municipalities and if we changed those today, we would adopt an act which would unilaterally modify the borrowing capacity of municipal governments.
This, in my opinion, is an important aspect of this legislation.
Was the additional burden for the municipalities considered, a burden the municipalities will have to face as they will have to repay both principal and interests on municipal loans, and this will also affect the taxpayers?
Perhaps the minister is prepared to go along with debt free money, which he recommended here not so long ago, I would even say with some vigour, in this house, but this afternoon he observed a cautious silence on that point.
However, we are entitled to a frank and clear statement from the hon. minister on this matter, so that we may know whether or not he is actually in favour of debt free money. Well, that is his business, the government's business, but he should at least have the courage to tell the house or the committee, in order that hon. members may be fully informed on this resolution and cast their votes accordingly.

I wonder, Mr. Chairman, if Mr. Lesage, the premier of the province of Quebec, has been consulted in this matter, and if so, what was his answer? Did he, for instance, give the Prime Minister of Canada the same answer as he gave on April 4 to the leader of the opposition, in the Quebec legislature?
That is what Mr. Lesage said on that occasion, as reported in Le Devoir of April 5 last. I shall quote his words to the committee, in order to clear up this argument which I am referring to. Mr. Johnson asked Mr. Lesage what he thought of the speech made the day before, in Montreal, by the present head of the government, the Prime Minister, Mr. Pearson, who was trying at that time, to get votes as leader of the opposition, and to carry favour with the Quebec voters. Mr. Pearson had mentioned federal aid, with regard to sewers and water mains for the municipalities. And Mr. Lesage answered-I want to call the attention of hon. gentlemen opposite to this answer, because I consider it very revealing-as follows:
I do not know in the slightest-
So he stated-
-what Mr. Pearson may have said about sewers and water mains, and I do not care-
Those are strong words.
-and I do not care whatever he may have said. The important thing is not what he may have said on this matter or another, but that we, here, are forming a strictly autonomist government-
That is what my hon. fellow members opposite should keep in mind.
Whatever the result of the elections on April 8 will be, we shall continue to support and uphold the rights of the province of Quebec, as the minister of municipal affairs did so well.
That is what Mr. Lesage said.
He was speaking, at that time, of Mr. Laporte, provincial minister of municipal affairs.
Mr. Laporte had, indeed, been most categorical in pointing out the danger of federal encroachment on municipal affairs when addressing the Montreal chamber of commerce. He was not the only one to do so. Most of our hon. friends opposite, who are now sitting on the government benches, have done so on various occasions.
Indeed, I defy any one of them, whoever he be, to tell this committee that their attitude had been different. I remember, for instance, some words spoken by the present Minister of Justice (Mr. Chevrier), when he was sitting on this side of the house, on October 29, 1962, and I quote:
Municipal Development and Loan Board During the whole election campaign, we tried to show the Canadian people how the municipal loan fund, if applied in the province of Quebec, would encroach upon its autonomy, as in all other provinces.
But the minister sticks to generalities and goes no further. He offers no explanation on how a Liberal government would proceed to comply with the autonomy of the provinces in that matter.
The Minister without Portfolio and the hon. member for Outremont-St. Jean (Mr. La-montagne), author of an intriguing book on Canadian federalism, seemed at one time to have a well-timed repentance for his centralizing tendencies.
I remember in particular reading a report on a convention held in Quebec where he was chosen candidate for the Quebec East riding. At that time, exactly like his leader who had come to support his nomination, he frankly and clearly stated he was in favour of a withdrawal from joint programs.
Mr. Chairman, not only is there no question of withdrawing from those programs, but we are going further in that direction. I therefore ask the Minister of Finance (Mr. Gordon), the Minister without Portfolio (Mr. La-montagne), the Minister of Justice and others to explain to members of this committee how you can withdraw from an over-all plan and, at the same time, go further in the same direction. After all, I think one must be consistent.
What is exactly the constitutional position? It is a well-known fact that in the past, the Liberal party, when in power, during that famous period of 22 years, interfered in various ways and with much impertinence in the provincial field, including the one concerning municipal activities and functions. Indeed, a recital of those facts would be tedious, Mr. Chairman.
However, section 92 of the constitution is quite clear and does provide for the rights of provincial states; it provides particularly that municipal institutions come under the exclusive jurisdiction of the provincial legislature. How could it be otherwise, when municipalities exist only through the provincial state which created them? That is an elementary principle which no one will oppose. Well, the government, in this legislation and in some other which was put on the order paper, now interferes in that field by proposing expenses to settle municipal problems. I am not even sure that this is a solution to municipal problems, but the interference is not less clear nor less flagrant. Last April, a few days before the election, the Minister without Portfolio was delivering an address to the students of the University of
912	HOUSE OF
Municipal Development and Loan Board Montreal, protesting that he was not a centralizer. He even denied the tendencies expressed in his book on federalism published in 1954.
Unfortunately, like many others, he is learning at his own expense that one must always weigh one's words. He should probably have become a notary. However, inadvertently or through lack of logic and while asserting his deep conviction as an autonomist, eager to respect provincial jurisdiction in all fields, and particularly in the municipal field, the Minister without Portfolio who was then candidate for the riding of Outremont-St. Jean, stated that he was in favour of granting loans to municipalities. Moreover, as everyone knows, that proposal was included in the platform of the Liberal party as published and disseminated in the recent electoral campaign.
But what do they mean when they say: "We will secure the agreement of the provinces"? To me, it means that the government realizes that it impinges through joint programs upon a field which lies outside its jurisdiction. As a matter of fact, it might be appropriate to mention what Mr. Laporte, the Quebec municipal affairs minister, stated on this matter. I quote:
If the federal government, whichever party is in power, has money to spend for examination and solution of municipal problems, that money should rightly belong to the provincial authorities because they are the only ones to have any authority to deal with those problems.
Before he was elected a member, the hon. Minister without Portfolio said that his government would endeavour to implement legislative and fiscal decentralization, but now the government he belongs to goes back on those fine words and, which is worse, violates and even mocks a basic principle, under the cover of economic necessity, thus infringing upon provincial autonomy.
Mr. Laporte previously stated that his government would resist such an infringement and would insist on giving directly to the municipalities the amounts it wants them to have. This is undoubtedly the meaning of the ultimatum served by the premier of Quebec to the federal government.
Mr. Chairman, I do not understand too well why this government, by interfering further in a matter of purely provincial jurisdiction, chooses to ignore that ultimatum, and I wish that the Minister of Finance, who moved this resolution, would give us some


positive reasons for that because we must know the facts if we want to pass judgment knowingly. Up to now, neither the Prime Minister nor the Minister of Finance, nor any other member of the cabinet has even attempted to explain what means would be used to maintain provincial autonomy in the field of municipal affairs.
Mr. Chairman, maybe I have dwelt a bit too long on this problem but I consider it a basic issue and I believe that at the very beginning of this new regime, the new administration must prove that they have principles, not only to make a show of them during the election campaign, but to implement them in the legislation they will submit to this house.
Mr. Chairman, in the light of the constitution, the laws of the province of Quebec, the civil and the municipal codes, in a word, all the provincial statutes, I submit that we are witnessing a glaring violation of provincial jurisdiction. That is why I say that this government will have to supply much more information than the vague assurance it has given us up to now to justify its draft measure. And such information must be given not only to the house, but primarily-and that is most important-to the people of this country and more particularly to the people of the province of Quebec which I am sure from the statements I just quoted do not intend to give away the minutest part of their rights in this field or in any other, which belongs to them.
Therefore, until the Minister of Finance or another government spokesman gives us that information and until we receive satisfactory answers, that proposal will only be, in my opinion, a Trojan horse, in short, a proposal that will have to be studied with care and mistrust.
I am sure that the motive that inspired this measure is commendable in so far as it brings a solution to unemployment. But why not give the provinces the money needed so that they can carry out those projects themselves? In so doing, we would respect not only the letter but also the spirit of the constitution.
So far, the Minister of Finance has told us that he intends to stay within the constitution, to respect the letter and spirit of it, but he has failed to convince us in that respect.
(Text):


Horace Andrew (Bud) Olson: Mr. Chairman, I have no hesitation in saying that when we saw this resolution on the order paper and listened to some of its aims and objectives we in this party thought we had at least some proposed

legislation which was going to do something about the tremendous rise in capital costs to the municipalities, about which my hon. friend from Royal spoke a few moments ago. As a matter of fact, I have some press clippings before me following the Prime Minister's speech to the federation of mayors and municipalities. I have a headline in the Toronto Daily Star which says: "$400 million is ready in loans to make jobs-Prime Minister". I have another in the Ottawa Journal lor May 30 which says: "Come and get it, P.M. urges the mayors". The Globe and Mail has this headline: "Municipal lending terms will be generous-Mr. Pearson".
So, Mr. Chairman, we thought that this was going to be designed to help the municipal governments all over Canada with their problems of capital costs and so on. I have a press clipping from the Toronto Daily Star which says, in effect, that the Prime Minister's proposal to introduce a bill to set up a municipal development and loan fund was greeted by applause from the delegates to the annual meeting of the Canadian Federation of Mayors and Municipalities. Well, Mr. Chairman, I suggest that if those same delegates had been here this afternoon when the Minister of Finance outlined some of the conditions that were to be attached to the granting of these loans, they may not have applauded quite so loudly.
The minister began the introduction of this resolution by pointing out some of the aims and objectives of the legislation being introduced. Certainly, no hon. member from any corner of this house would disagree with some of those aims. He mentioned that the government was aware of the unemployment problem, and suggested that the municipalities could, in fact, stimulate employment more rapidly than any other level of government. I have no disagreement with this statement. I think it is true. He also claimed that this legislation would initiate action on deferred projects. He said that there was a problem in Canada in connection with deferred municipal projects that could be of beneficial use to the general public. At the same time, he pointed out that there were large groups of unemployed in the country, and this legislation would bring these two things together and help both of the problems. No one could disagree with that, Mr, Chairman; that is a very desirable end result.
The minister also suggested that this measure would provide funds immediately and activate those deferred projects. Well, up to this point, Mr. Chairman, we have no disagreement. We agree with the aims and objectives. Then, the minister dealt with the conditions that were going to be attached, and to the techniques to be used, in getting
11, 1983	913
Municipal Development and Loan Board this money out to the municipalities so that they could make use of it. He said, of course, there would be forgiveness of a significant portion of the loan if certain conditions were met. One condition was that certain projects would be undertaken and completed by a certain date. He said that funds would be available only for additions to projects that were now under way. In other words, there would almost have to be an undertaking that the municipality had not previously considered, or at least had not initiated any action on it up to this point.
One other condition was that there was to be no interference with the ordinary financing of the municipalities, as they are doing it today. I suggest one of the major problems facing municipalities today is the tremendous capital costs and interest charges connected with the so-called ordinary financing. A number of references have been made during this debate to the fact that 30 per cent or 40 per cent of municipal budgets are being appropriated in order to pay interest on the debt the municipalities already have. We in this group had hoped that, finally, there was to be some action taken to relieve the municipalities of these tremendous charges for capital.
However, apparently the Minister of Finance is using this legislation as another means, if they want to call it that, of dealing with the unemployment problem. We do not disagree with that idea, that there is need for some action in respect of unemployment. But we also believe that this was an opportunity, and is an opportunity for that matter, to deal with the unemployment problem in the nation and at the same time relieve the municipalities of these tremendous debt charges which are becoming almost unbearable.
One of the other conditions to which the minister referred was that the rate of interest to be charged would be based on the federal government borrowing rate. The Minister of Finance is on record as being in favour of debt free money. I suggest to him that if he will apply this idea, that the charge to the municipalities will be equal to, or based upon, the federal government borrowing rate and then sell the bonds that are necessary to raise this $400 million to the Bank of Canada we would, in fact, achieve a lowering of the interest rate and pass on some very beneficial savings to the municipalities. The minister is in favour of this process, so I urge that he implement this idea, carry on with this technique, for obtaining the funds that are so badly needed to stimulate employment and help the municipalities with their deferred projects.
914	HOUSE OF
Municipal Development and Loan Board
Then, Mr. Chairman, the minister moved on to the administrative aspects of this legislation. He suggested that the board be set up in conjunction with Central Mortgage and Housing Corporation. I have no disagreement with this suggestion, except perhaps to concur in some of the objections that have been raised by the hon. member for Pontiac-Temisca-mingue. He said that if this is done there is a very grave danger of these people trying to deal directly with the municipalities. I agree with that. The relationship between the municipalities and the provinces is not the same as the relationship between the provinces and the federal government. Furthermore, the federal government really has no constitutional right to deal directly with the municipalities.


Mr. Woolliams:: The municipalities in
Alberta are pretty heavily in debt.


Horace Andrew (Bud) Olson: Yes, I am coming to that. I am glad you brought that up. I should like to outline for a few minutes the set-up in the province of Alberta which has proven so beneficial to the municipalities. As a matter of fact, I suggest that if all the provinces in Canada had a similar arrangement between the provincial government and municipalities as the one that exists in Alberta, many of the objections that have been raised by the hon. member for Pontiac-Temiscamingue simply would not apply.


Eldon Mattison Woolliams: You do not really believe that do you?


Horace Andrew (Bud) Olson: For example, back in the early 50's the province of Alberta set up a municipal revolving fund to encourage municipalities to put in sewerage and water systems, and so on. Loans were made to municipalities at 2 per cent interest under what was called revolving self-liquidating loans. For a number of years the surpluses of the treasury of Alberta were sufficient to supply all the funds that were required under this measure to meet the demands of the municipalities for putting in sewerage systems, water systems and many other projects. I might say that this measure was so successful that almost all the towns and villages, somewhere around 98 per cent, with a population of over 100 have water and sewerage systems. As a matter of fact, in many cases after these projects were carried out unconditional grants were made by the province to the municipalities sufficient to cover the cost of repaying both the principal and the interest. But the other important feature of this kind of assistance to the municipalities is that the payments of both principal and interest go back into the fund so that the money can be used over and over again.


However, by about 1958 the demands from the municipalities were in excess of the amount of money that the province itself could put into the fund, and so a municipal finance corporation was set up. Under this arrangement the province borrows in lump sums all of the money that is required by all of the municipalities in the province of Alberta, and by doing so the province obtains this money at a substantially better rate of interest than if the municipalities had to go into the money market individually.
I should like to suggest to the Minister of Finance that here you have a tailor made scheme already in operation. The administrative requirements for what is probably anticipated in this resolution are already set up, so far as the province of Alberta is concerned. There will be no interference with provincial rights if the government will deal with the municipal finance corporation. On the other hand, if you set up another board, whether or not it is in conjunction with C.M.H.C., and try to deal directly with the municipalities I think you will run into some constitutional problems and perhaps bring about some disagreement with the province that really is not necessary.
Another point in the resolution now before us is that all of this money will be granted only if it is for programs in addition to those that are already taken care of by means of the usual and ordinary financing of programs that municipalities have been doing in the past. In dealing with the exemptions, the minister ruled out such things as hospitals, sewerage systems, capital needs for education, which I suppose means school buildings and all of the other facilities that are required for education. By these exemptions I think he took away at least half of the capital responsibilities of the municipalities.
What do we have left? We have streets and maybe some other local improvements. But what do you do in a case where a municipality thinks that expanding, improving and modernizing its educational facilities happens to be the most important project needed for that area? What if they are not willing to borrow money outside of the exemptions, with the strings that will be attached to it? I think there is a very real possibility that we will find situations where the municipal boards themselves feel that the modernizing of hospitals or educational facilities is paramount in their requirements. But if they are going to benefit from this legislation and stimulate employment, they will have to become involved in projects that are not as important. So, Mr. Chairman, I urge the minister to reconsider

some of these exemptions because I think there is a valid need to be a little less stringent in this regard.
I am more familiar, of course, with the province of Alberta than any other province, but I know that in all the other provinces as well there are bodies under the provincial governments that have a certain amount of control over municipalities within those provinces. I think most of them have regulations respecting the maximum amount of debt that a municipality can incur. Therefore I think that with respect to those provinces which do not already have a central borrowing agency, such as the municipal finance corporation of Alberta, it would be well for the Minister of Finance to encourage those provinces to set up some such body so that the most effective use can be made of whatever money is available and so that this can be done without getting into controversy with the provincial authorities.
Finally, I wish to repeat that we believe this resolution and the legislation to follow could provide an opportunity for the federal government to do something in a very positive way to relieve the municipalities of the tremendous debt charges that are becoming almost unbearable. I know we all realize that currency and credit are under the exclusive jurisdiction of the federal government, and it is here that the government has authority to make changes in the monetary and fiscal system of the country. If we look into the future and take into consideration some of the figures that the minister himself projected before he was in the office he now holds, it is almost alarming when one realizes the tremendous debt service charges that are going to be piled upon municipal governments in the years to come. Certainly it seems to me that we should take full advantage of this opportunity to work out some kind of arrangement so that the capital requirements of the municipalities can be provided at a lower rate of interest.


Eldon Mattison Woolliams: I wonder whether the hon. member would answer a question. Would he agree that the municipal debt per capita in Alberta is one of the greatest debts per capita in any of the prairie provinces, in spite of Alberta's boast that it is a debt free province?


Horace Andrew (Bud) Olson: Mr. Chairman, I would be very happy to answer that question. One reason, of course, for the large municipal debt figure in the province of Alberta stems from the fact that water services, sewage treatment systems, sidewalks and so on have been proceeded with to a far greater extent than in any other place in Canada. I would also point out to the hon. member that something over $400 million of the municipal debt is owed directly to the
H* 1963	91S
Municipal Development and Loan Board provincial treasury, and really I do not think it is a very bad situation when you owe money to yourself.


An hon. Member:: Do you have to pay?


Horace Andrew (Bud) Olson: You pay it into the revolving fund so that the money is there to be paid out time and time again. It can be used over and over again for the extension of municipal services. The great advantage of it is that all of the capital repayments plus all of the interest charges go back into the fund so that the money can be used over and over again. As I said, it is really not a very bad situation when you owe the money to yourself.


John Richard Garland: Mr. Chairman, it is with some genuine satisfaction I rise to take part briefly in this debate and to commend the proposed legislation to the committee. The principle of the proposed legislation and its significance to our cities and towns have been described so ably by my colleague, the Minister of Finance, that my words may perhaps seem unnecessary. Nevertheless, I have more than an academic interest in the municipal development and loan act. It has already been made clear that, if and when the bill is passed, its various provisions will be implemented through established facilities of the Central Mortgage and Housing Corporation. As the minister responsible for the operations of the corporation I too will have a task to perform.
I am very happy with this turn of events. It seems to me the proposals being introduced today, together with certain amendments to the National Housing Act, I hope also to be given your early consideration, constitute a vigorous, two-pronged attack on some of the growth problems of our municipalities. Together they will answer an urgent need to boost the economy and to provide substantially increased employment.
I need hardly remind the committee that many Canadian cities are in a period of increased expansion. For better or for worse, therefore, important planning decisions are constantly being made by governments, institutions, firms and individuals. The nature and character of our living environment now and in the future, will reflect the wisdom of these decisions, in both small and large urban areas. Surely it is obvious that no area of public policy has a more lasting and pervasive effect on our well-being than the orderly, comprehensive development of our urban environment.
Our course of action then is clear. We must take positive, dynamic steps to improve our whole habitat, steps that will afford-at the same time and in one stroke-new impetus to the economy and more jobs for our people.
916	HOUSE OF COMMONS
Municipal Development and Loan Board
I submit the municipal development and loan act and the amended National Housing Act to be introduced, taken together and operating in concert, can and will achieve these ends. For some years from the opposition benches I have sought and asked that the fullest consideration be given by the federal government to measures of this kind.
I am now happy to be associated with such presentations to parliament for action.
In certain conditions, and these conditions certainly are with us today, the addition by the federal government of capital funds to the stream of resources available for proper urban growth, is a practical, desirable, forward-looking act. It is my opinion that the action is even more desirable when the funds are used for the highest and best social and economic purposes.
By this I do not wish for a moment to decry government investments for other purposes. They too are invariably imperative. They too give a fillip to the national economy and to the level of employment. But, are there not important advantages to be gained by earmarking more national investments for vital municipal projects that would not otherwise go forward. It is my feeling that, as a supplement to local capital expenditures already committed, and to provincial assistance to municipalities, such funds so invested will have a much more solid impact on growth and development and on expanded work opportunities. At the same time we will be helping our urban communities, large and small, to provide the services they so urgently require, encouraging them also to plan for the future with greater effect, and thereby creating a new and improved environment for our own and future generations.
That is what I mean by the highest and best purposes. I suggest that, viewed in this light, we can bring forward, with enthusiasm, this among the other legislative instruments proposed in the speech from the throne.
There will be those who ask bluntly; how many new jobs? I am not going to try my hand as a forecaster. I believe any such guess would be difficult because of the varied and almost incalculable effects that follow improvements in social capital, but I do draw the attention of committee members to one or two significant statistics.
Private and public expenditures on new construction are estimated for 1963 at $6,060 million. Forecast capital expenditures by all municipalities at $865 million represent more than 14 per cent of the total. I suggest it follows that the added incentives to municipalities proposed by my colleague, particularly if taken in conjunction with the N.H.A. amendments to which I have already referred, may call for a re-assessment of these figures.

There are those who are concerned about the constitutional aspects. Indeed the question has already quite properly been asked in the house. I need hardly repeat the assurance given by the Prime Minister recently during his address to the annual conference of the Canadian Federation of Mayors and Municipalities. He said, you will recall, that only those projects approved by the province concerned will qualify for loans, and in turn, for a partial rebate of the debt they incur. He also made it clear the proposed federal assistance "will not take away one shred of local autonomy."
May I conclude by saying that when the proposed legislation becomes law, I and the personnel, facilities and services of the Central Mortgage and Housing Corporation are ready to implement a program of undeniable benefit, not only to Canada's municipalities now being cast in new moulds, but to the whole design and fabric of the nation itself.


Paul Raymond Martineau: Would the minister permit a question? He has referred to the constitutional aspects involved, and I was wondering if there has been any exchange of views between the government and the provinces.


John Richard Garland: Mr. Chairman, perhaps I should point out that this is legislation introduced by the Minister of Finance, and perhaps a question of that kind would be more properly directed to him.


Mr. Webster:: Mr. Chairman, many hon. members, including a number of my colleagues in the New Democratic party, have had long experience in local government and are well aware of the problems to be faced. With the rapid increase in the growth of towns and cities since world war II there have been increasing demands on local authorities for more and better services. One has only to think of roads, sewers, water and lighting, as well as housing, health, education, recreation and planning. The demands are almost overwhelming.
One of the greatest difficulties is the confusion and indefiniteness that prevails regarding areas of responsibility. Local men are close at hand, and it is not surprising therefore that buck passing has become an accomplished art when capital cities are thousands of miles away from local areas. The provincial capitals and Ottawa have become the scapegoats of administrators on the local scene.
Clarification is needed among these three levels of government, and municipal authorities need broader bases of taxation. Land is no longer the sound criterion of ability to pay. Mr. Chairman, I would like to quote

from an editorial in the Toronto Globe and Mail of June 8 entitled "Whose hand in which pocket":
In Detroit representatives of Canadian municipalities discovered that many United States local governments have other sources of direct revenue than property or direct business taxes, such as personal income and sales taxes. Property owners in U.S. urban communities contribute only 46 per cent of the total tax revenue of cities, while in Canada they contribute more than 80 per cent.
There is a central theme to these various statements which has been sung in Canada of late. It is that in the ideal democratic community, each government, whether local, provincial or federal, has defined duties, defined sources of revenue, and accepts responsibility before the public for raising and spending its own taxes. If it errs the taxpayer knows precisely whom to blame.
In Canada this clear responsibility has become confused in a tremendously complicated jungle of grants, subsidies and hidden forms of taxation. The taxpayer does not know how much he pays in taxes or, in some cases, to which level of government he pays them. The politician, relieved of much direct responsibility for raising taxes, can, and often does, become correspondingly careless about the ways in which he spends them.
In the same issue, sir, there was an article entitled "B.C. professor backs new deal for Quebec". The article reads:
Donald V. Smiley, associate professor of political science at the University of British Columbia, said yesterday-
That is, he said this in a paper presented to the Canadian Political Science Association:
-the confederation agreement of 1867 should be revised to adapt it to the new needs and wants of all levels of government in 1963.
"From about the end of the first world war onward, Anglo-Canadians have come increasingly to look to Ottawa for leadership and money in respect to what are considered as worthy national purposes-
More recently, influential currents of thought and policy in Quebec have come to assert that an increasing range of autonomy in fiscal and economic matters is essential to the survival and expansion of French Canadian culture", he said.
Holding that Canadians must recognize that Quebec is not a province like the others, Dr. Smiley said that a reconciliation on constitutional problems is possible within the present federal framework.
"Its essential element would be a different sharing of legislative powers, revenue sources and functional responsibilities between Quebec and Ottawa than that which prevails between the federal government and those of the other provinces", he said.
Many areas will welcome the opportunity to borrow from this fund that we are now discussing if regulations regarding rates and requirements are attractive and clean-cut. If the means test is too demanding or too obscure, the most needy councils will bypass the federal offer. They will claim, and rightly so, that the uncontrolled sections of their budgets, resulting from previous borrowings, are already embarrassing and frustrating and leave them little room for manoeuvring or planning desirable improvements in their
11, 1963	917
Municipal Development and Loan Board districts. To be of advantage to local governments the write-offs or payments to be forgiven must not be vague or uncertain. Municipalities must know where they stand in regard to all these matters.
The winter works program will be needed to supplement projects financed under the loan fund, but I do suggest to the Minister of Labour that he should examine very carefully the regulations having to do with the winter works program and that he should consider including not only labour costs as a legitimate charge in this connection but also charges for engineering, planning, equipment and machinery. I saw many constituencies and municipalities which had difficulty in the past year or two qualifying under the regulations of the winter works program because of the heavy cost of engineering and equipment. I urge that those costs be included as legitimate charges in this program.
All employing agencies, both public and private, have a social obligation to maintain employment at a high level. We are concerned at the moment with the responsibility of the public sector of our economy. It is a major factor in the employment picture. Every modem government that has a heart views chronic unemployment as a social disease that will be removed only by bold and far reaching decisions. Measures announced so far fall far short of meeting this need. However, hon. members of this house will hope that all three levels of government in this country will combine to assure a substantial improvement in the employment situation during 1963.


Sydney John Smith: plan which comes under the winter works program will qualify for a write-off under this scheme, in addition to grants under the municipal winter works program, or will it be excluded? If the work is carried out in the winter time, does that mean it will not be eligible under this latest measure? The minister also suggested that projects which were assisted at the present time by federal or provincial schemes would be excluded. Well, to take the situation in the province of Ontario, it seems to me that many of the main projects which are badly needed and which have a substantial labour content will be excluded. I am thinking of schools, sewers and sewage works, hospitals and homes for the aged. Are these all to be excluded? If they are, what is left? We are left with sidewalks, and I can assure hon. members that in the city of Barrie they would have a hard time building a sidewalk between the months of November and March.


An hon. Member:: You roll them up.


Sydney John Smith: We don't roll them up; we put snow on them. Of course, we could build town halls, but most of these were built between 60 and 100 years ago and have been renovated in the past year or so under the Conservative government's winter works scheme; so the market for town halls is going to be limited. Then there are jails. I do not know how many of these would be needed. In the small city of Barrie there is one project which I hope will qualify under this program if the rates are right. We need a substantial addition to our library, and I trust that when the bill is introduced it will not be found that libraries are excluded from its benefits.
One of the earlier speakers talked about expressways through cities and suggested that cities would benefit through being able to build expressways. In Ontario, the provincial government makes a substantial grant toward the building of connecting highway links through municipalities. When a highway runs through a town or a city, the province assumes a substantial portion of the cost of construction. Will these projects be excluded from assistance under the program now proposed because the province participates financially?
The avowed purpose of this scheme is to provide employment, and everyone hopes it will do so. We hope it will provide employment in substantial quantities, particularly in winter. However, it seems to me that in introducing the resolution the minister put so many qualifications and hedges about it that it will not bring about these very laudable purposes. As a matter of fact, the resolution as introduced could perhaps best be described as niggardly in relation to providing against unemployment. Of course, it does not meet

the larger problem at all. I have in mind the question of the tax relationship between municipal, provincial and federal levels of government. Surely, if there is one problem which is disturbing confederation today, it is the one which has as its basis the financial relationship between the various levels of government. It would seem to me that if the intentions of the government were sincere this would have been a good place at which to begin tackling this question. It is no answer at all to provide another conditional grant- and that is all we are doing; we are providing another conditional grant which is hedged about with restrictions to an even greater degree than are most such grants. A few years ago, Ontario at least attempted to meet this problem head on by providing a per capita grant unconditionally to all the municipalities in the province. That was a direct attack on the system of government grants destroying municipal autonomy. But nothing at all has been said or done in this direction in the resolution now before us.
Nevertheless, while this is only a small crumb from the table, one can support the resolution, or one hopes one can support it, though with a substantial degree of misgiving.


Mr. Priitie:: Some of the previous speakers from the Conservative party and the Social Credit party have made a great deal of the constitutional question involved when the federal government enters into any kind of relationship with the municipalities. I think they are over-emphasizing this point. There is no great problem here. This matter has already arisen with regard to the winter works program, and in the section of the National Housing Act which provides for sewer lines, so I do not think there should be any particular problem in this direction. Moreover, the resolution states clearly that, in order to qualify, projects must meet with the approval of the province concerned.
I recall that during the election campaign the Liberal party stated that in order to bring about full employment and prosperity in Canada, both long term and short term measures were needed. The long term measures presumably include the setting up of bodies such as the economic council and the proposed department of industry. Spokesmen for the Conservative party stated, I think rightly, that it might be some time before the effects of such measures were felt. They also said that certain short term measures were necessary in order to provide work for the large numbers of people who were unemployed. The Minister of Finance recognized this need and mentioned it this afternoon, stating that the level of unemployment had been running at an average of 6.6 per cent in the last few years. He also recognized the
Municipal Developmeni and Loan Board needs of the municipalities, saying there was a backlog of capital works to be carried out.
I should like to submit that the proposed loan board and the amount of money suggested will not achieve satisfactorily the purposes the minister has in mind. Four hundred million dollars spread over three years will do some good; any aid to the municipalities will be appreciated, I am sure of that. Even the winter works program of the last few years, small as it was, did help. But if the government wishes to tackle the outstanding needs of the urban areas and if the minister really wishes to come to grips with the serious level of unemployment, the amount of money proposed here will not do the job. By way of illustration, the money provided in connection with the sewer loans amounts to $200 million over three years. Most of this is allocated at the present time. So I suggest that $400 million for all the municipalities of Canada over three years will not be very successful in coping with the situation.
I was sorry to hear the minister say that various types of public works are to be excluded from the benefits of this legislation. Hospitals are to be excluded, he says, because there is already some legislation which covers them. Schools are not to be included; sewers are not to be included, because provision is made for them under the terms of N.H.A. at the present time. I would add that only certain types of sewage works are included among the present N.H.A. legislation, which tends to concentrate on trunk lines. There is not much help for the general lateral lines serving the residential areas. So that if you take into account these exclusions, I think we have left the question of the roads, which is quite a big problem, and I think the city of Ottawa can probably use $50 million of that itself. There are also the sidewalks and possibly public buildings such as city halls and libraries. I think it would be of much more value if the lines could be widened, particularly the installation of sewer services, which is most expensive.
However, Mr. Chairman, the main point I am trying to make tonight, and it will not take very long to make it, is this. If the government intends to give the economy a shot in the arm to try to relieve unemployment quickly, they are thinking in terms of amounts too small for that purpose. I am sure that among government advisers both in parliament and outside there must be people who hold the same general economic views which are held by Dr. Samuelson of the Massachusetts Institute of Technology and economic adviser to President Kennedy, views held by many Canadian economists. I am sure the Minister of Finance is aware of those views. The amount of money necessary, even
920	HOUSE OF
Municipal Development and Loan Board though large deficits would be incurred, is much greater than that proposed through the new loan board. As the legislation stands at the present time it will fail in the two purposes it has in mind. It will not do very much to get at the long deferred projects of our cities and municipalities, and it will not make that much difference to unemployment. I should like to think that the government will take another look at this and decide that the $400 million should be applied within a 12 or 18 month period instead of over a period of three years. To conclude, Mr. Chairman, any help which is given to the municipalities is welcome, but I submit that this measure will fail in its main purpose, which is to try to improve employment in Canada.
(Translation):


Rémi Paul: Mr. Chairman, we in this
chamber have all heard about the famous 60 days of decision of the present government.


Some hon. Members:: Hear, hear.


Rémi Paul: What appals me the most is to see the hon. members opposite applauding. What are they cheering about? What has the Liberal party done since it came to power?
On the evening of the fifty fourth day, we have witnessed a shameful attempt by the present government to violate the Canadian constitution.
This afternoon, the Minister of Finance (Mr. Gordon) has explained the resolution now under study. According to him, that measure should be more than effective in dealing with unemployment. We all want to see the Canadian economy move forward and one can wonder if that measure, outside its constitutional aspect, really offers an effective remedy to the worsening unemployment situation in our country.
Up to now, it has been impossible to know whether the provinces have been consulted in regard to the act proposed in the resolution under study.
On May 20, 1963, the hon. member for Brome-Missisquoi (Mr. Grafftey) asked the Minister of Justice whether he had consulted the provinces about this measure. As can be seen on page 38 of the official report, the Minister of Justice replied in these words:
Mr. Speaker, I am aware of no communication such as the one mentioned by the hon. member.
Mr. Chairman, will a member of the cabinet inform the committee of preliminary consultations which might have been entered upon between the provincial and federal authorities.
Someone may reply: We do not have to consult the provinces. We would then witness


an attempt to transgress the Canadian constitution as glaring as the one made by Messrs. St. Laurent and King when they were prime ministers.
Mr. Chairman, we must stop and ask ourselves under what power the present government intends to legislate in a field under the exclusive jurisdiction of the provinces, since paragraph 8 of section 92 of the British North America Act says clearly that the provinces have exclusive jurisdiction over the field of municipal legislation.
The present government asks us to pass a resolution that could unbalance existing legislation, especially in the province of Quebec.
1	do not know the municipal legislation systems of the other provinces, but in the province of Quebec, municipalities are governed by two special acts. First there is the cities and towns act, and then the municipal code which governs rural municipalities, township or parish municipalities. Those acts provide means of borrowing that are available to municipalities in order to carry out work under their jurisdiction. On the other hand, the proposal under study ignores legislative provisions, administrative rights that belong exclusively to the provinces.
Mr. Chairman, if we consider the resolution we read this:
That It is expedient to introduce a measure to promote increased employment in Canada by the provision of financial assistance by way of loans to municipalities-
Now if the primary purpose of the measure is to assist municipalities, and if the central government really wants to help the provinces, the Minister of Finance should allow the provinces to make a further deduction of
2	or 3 per cent on personal and corporate income taxes, which would result in an increase in the revenues of the provinces that would enable them to assist municipalities in the carrying out of their projects. By doing that, we would respect the Canadian constitution and we would not interfere with the rights of the provinces, as suggested by this resolution.
Under existing provincial legislation, municipalities wishing to borrow money must go on the market and ask for the required loan through the official gazette of Quebec. The organizations interested must tender in regard to the loans to municipalities and send their tenders to the municipalities within the period allowed previously in the regulations and stipulated in the notice.
Therefore, in order to comply with the provisions of existing municipal bylaws in the province of Quebec, the federal govern-



IX. 1963

[Stage Direction]
xnent should normally have to tender for loans to the municipalities of the province.
This is altogether inconsistent and illegal at the same time, because the federal government can in no way interfere with municipal administration.
The Minister of Finance said this afternoon that this legislation provides for a fund of $400 million to be made available to the C.M.H.C. and which will be administered by a board.
The board may well adopt administrative regulations or measures that would contradict the provisions of existing legislation in all provinces.
If such a thing happened, which legislation would have priority, the provincial laws concerning municipalities or the adminstrative regulations of the board?
Mr. Speaker, I respectfully submit that this resolution is dangerous and, as long as members of this house are not clearly informed as to any previous consultation with the provinces, we have no right to approve such an obvious interference of the federal government in a field of exclusive provincial jurisdiction.
If Ottawa truly wishes to help solve the unemployment problem, it can do so without violating the constitution and section 92 of the B.N.A. Act.
Furthermore, even if this legislation were constitutional, there is a strong possibility that it will benefit only the large metropolitan areas, because I do not feel that small municipalities will benefit from it. In my opinion, taxpayers will have to share in repaying the loans raised to carry out the work. Municipal councils will be forced to increase property taxes or to collect a special tax in order to meet their obligations when the loans fall due.
Where will the government borrow those $400 million it is ready to contribute? Let us hope that the Minister of Finance (Mr. Gordon) in his budget speech next Thursday night will throw some light on this subject. The government will have to levy direct or indirect taxes in order to repay those loans obtained on the money market. However, it is again the Canadian taxpayer who will have to bear the burden resulting from the implementation of this act.
Mr. Chairman, the members from Quebec in this house would be interested to know
Municipal Development and Loan Board whether Premier Lesage has been consulted. The Minister of National Revenue (Mr. Garland) stated earlier that only the projects approved by the proper authorities would be granted the loans requested, and only after municipalities applied to the board.
It is essential to know, in addition, whether the province-in this case the province of Quebec-has been consulted on the passage of this legislation.
If the province has not been consulted, I wonder by what right we could approve this resolution. And if the province has been consulted, can we be sure that the existing legislation will be amended so that it would be in line with the wording of the act that will follow the adoption of this resolution?
Would it not be a good thing to ask the present government, which seems quite willing to help the provinces, to yield to the provinces the right to levy taxes strongly claimed by the premier of the province of Quebec, Mr. Jean Lesage? If the government has money it intends to hand back to municipalities, it is because it realizes that money belongs to the provinces. And the attitude taken by Quebec's premier is perfectly logical under the circumstances. I wonder how our hon. friends opposite, the members from the province of Quebec, will manage to support that resolution, when the premier of the province of Quebec, who backed them up in the last election campaign, has presented the federal government-whichever it was to be-with an ultimatum for the granting to the province of Quebec of 25 per cent of the personal income tax to be levied and 100 per cent of the succession duties.
Well, my Liberal friends from the province of Quebec, will you be following the policy of centralization implied in that resolution or be in favour of the autonomy advocated and claimed by the premier of Quebec? It will be interesting to watch the stunts performed by the hon. members to justify themselves as well as the stand they will take toward the resolution now before us.
I respectfully submit that we have to analyse this country's economic situation. We must give assistance to municipalities, but here again we must abide by the constitution.
There must be no infringement upon the autonomy of municipalities, no take-over. On the contrary, a way must be found to help municipalities, with all due respect for the constitution, thus furthering economic pros-
922	HOUSE OF
Municipal Development and Loan Board perity and at last finding a solution to the unemployment problem. But what is much more important, Mr. Chairman, is to respect the Canadian constitution. And we shall see to it that the provinces do not lose an inch of their autonomy in the field of taxation, as we took it upon ourselves to do while studying the resolution now before us.
I suggest that we must, before final passage of this bill, obtain from the minister all the required information. We would like to know whether the provinces have been consulted. This is the cornerstone upon which the present legislation must be built because otherwise we are not entitled to go further in our study of this resolution as it would interfere with provincial autonomy.
We must consider this legislation seriously in the light of the information which could be provided by the Minister of Finance or the Minister of Justice, the hon. member for Laurier (Mr. Chevrier) who, everyone knows is the spokesman for the province of Quebec. He will probably be able to enlighten his colleagues who sit on your right, Mr. Chairman, and at the same time the members sitting on your left. It will be necessary to put partisanship aside so that the Canadian constitution be respected.
I am quite sure that the hon. member for Quebec South (Mr. Cantin) will bring enough pressure to bear on members of the cabinet for us to get the information we need before we are called upon to decide on the advisability of this legislation.
Thus, we will be in a position to decide how we should vote on this bill.
Mr. Gauthier:: Mr. Chairman, since this is the first time you have been in the chair when I am on my feet, I take this opportunity to congratulate you on your appointment.
We are now wondering a lot about their proposed financial assistance to municipalities in the form of loans to reduce unemployment.
We are very happy that this resolution was submitted, but it remains to be seen whether we will be as pleased with the administration of the act.
First of all, we find there some of the ideas advocated for several years by our group about a municipal development bank. Even though that name is not given to the new organization, we hope that this was the minister's idea in moving this resolution.


Otherwise, we should be forced to agree with those who have doubts as to infringement of provincial jurisdiction.
If the minister wants to feed his $400 million fund which he needs to carry out this plan in the same way as the other parties do, there is no doubt that he will encroach upon provincial autonomy. As a matter of fact, he will have to delve deeply in the taxpayer's pocket and get three times as much as he will be able to pay out to the unemployed. Mind you, on the basis of what the Liberals said during the last election campaign, when speaking about the Social Credit, whenever the government gives you a dollar, it has levied three from the taxpayer.
Under the circumstances, Mr. Chairman, the provinces should have the right to levy their own taxes; they are now old enough to set up their own taxes; they hardly need to be shown the trick by the federal government.
Let us start by leaving the provinces their revenues. And you will be surprised to find that there are among those provincial legislators, men who are quite as qualified as the federal ones to spend their revenue in a judicious way.
The great principle to the effect that a right is attached to every duty is still true. If the municipalities have the obligation and the power, much more so than the federal government, to carry out such duty, if it is their duty to create a climate favourable to the development of their area, then the central government cannot take away from them the rights that are necessary to the fulfilment of their duty.
There is no end to recriminations about everything going wrong in Canada! Why? Because no one, beginning with the central government, is playing his own part. Because the strong still seek to displace the weak.
Do you not think we are going back to the law of the jungle? Everybody wants to interfere with other people's business and at the same time neglects his own business. While the provinces urge the central government to give them back the sources of income they had lent it when danger threatened, that same government, grateful as a lion, does not want to give back anything to those who came to his help. Far from giving them back their old taxation powers, the government does the utmost every day to find new devices to restrict a little more their freedom of action before choking them for good.

On the other hand, the provinces play the same game with the municipalities and school boards which they will control within a few years.
School boards are in urgent need of money; municipalities also need money. The provinces are hard put to find new sources of revenue. And, in the meantime, the central government takes over all the fields of taxation. The federal government grabs almost all the revenue in the country and then the funds are administered by a bureaucracy over which that same government has no control. And, in order to hide that inability, new boards, commissions and departments are set up. I feel that, under present conditions, we might as well grant the provinces what they want and give them back their whole taxation rights. Then they would solve themselves their own unemployment problem. But if the minister must set up a $400 million fund through the Bank of Canada, then there is nothing more to fear for provincial autonomy. Because this government will then simply authorize the Bank of Canada to place the said amount at the disposal of municipalities. Each municipality will be absolutely free in its operations, since each one of them knows best the projects to be carried out in the area and is in the best position to determine who needs work.
Thus, this government agency, the Bank of Canada, for once will play its real part, which is to create the necessary credit to promote the development of municipalities and, by doing that, to give jobs to the unemployed.
I think that, in so doing, the minister will serve the purpose he has set for himself, while protecting at the same time the autonomy of one and all provinces.
(Text):


John Whitney Pickersgill: Mr. Chairman, I was wondering whether hon. members would object to going on for a very few minutes this evening so hon. members could see the bill and debate the bill itself. It would be a great convenience to the government if we could have the bill read the first time, particularly when the Minister of Finance has to be elsewhere tomorrow.


Louis-Joseph Pigeon: I call it ten o'clock, Mr. Chairman.
Progress reported.
Business of the House BUSINESS OF THE HOUSE


Mr. Nowlan:: Will the house leader tell the house what we will be doing tomorrow?


John Whitney Pickersgill: I regret very much that we cannot go on with this particular measure we have been debating today because the Minister of Finance, for quite obvious reasons, has to be elsewhere tomorrow. That was one reason why I was very hopeful that this measure, which is calculated to provide employment, could have been advanced one stage today. However, the committee did not wish to do that and we are in the hands of the house.
Tomorrow we will hope to complete the resolution on the department of industry and get the bill read the first time. If we should get first reading of the bill tomorrow we will then go on with the second reading of that bill on Thursday up until five o'clock. After that, of course, we have the hour for private members and then the budget. I understand that hon. gentlemen opposite prefer not to begin the budget debate on Friday. For that reason we will go on with these other economic measures on Friday, but I think we will have to see what progress is made tomorrow and Thursday afternoon before I will be able to forecast with any accuracy what would be done on Friday.
Now, in the event that tomorrow we conclude promptly the resolution stage on the department of industry bill, we would begin the resolution stage on the department of agriculture measure.


George Clyde Nowlan: Mr. Speaker, I trust there is no misunderstanding about Friday. We have been told the budget will be brought down on Thursday night, and we are not going to have the budget debate on Friday. Usually the budget comes in on a Tuesday and about a week elapses between the time the budget is introduced and the debate ensues.


Walter Lockhart Gordon: What year are you talking about?


John Whitney Pickersgill: Some years we did not have any.


George Clyde Nowlan: That is all right; whether we had one or not, you are not going to have a budget debate on Friday and you cannot have one on Monday unless you get the unanimous consent of the house to that effect, because I have gone over the debates for the past seven years and no debate on a budget followed within two days of its introduction. I want it clearly understood that you are not going to have a budget debate on Friday.


John Whitney Pickersgill: I think the hon. gentleman is exercising himself unnecessarily because I have already said we would not have it

Business of the House on Friday, and I have already said we were going on with other economic measures on Friday. I think the hon. gentleman did not understand what I was saying. I think it is perfectly clear, and I am sure all other hon. members would agree. But, there is one point I would like to make and I am glad the former minister of finance, who never brought down a budget, brought this to my attention.


George Clyde Nowlan: I won't have anything to apologize for then.


John Whitney Pickersgill: It is possible that there will be some time between the conclusion of the speech of my hon. friend, the Minister of Finance on Thursday evening and ten o'clock, and the government would hope to use that time for the deliberations of the house, and not to adjourn.


Azellus Denis: Never on Sunday, anyway.


[Stage Direction]
It being five minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, June 12, 19G3