1963-11-29

HOUSE OF COMMONS DEBATES


[Stage Direction]
queen's printer and controller of stationery

[Stage Direction]
Friday, November 29, 1963


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a question of privilege, and when I have stated my question of privilege I shall move an appropriate motion based thereon.
As all hon. members are aware, the government has steadfastly refused to make public the report of R. Dixon-Speas and Associates on the operations of Trans-Canada Air Lines. The government has refused to let parliament see that report. It has refused to let the government of Manitoba see it, and of course we recall the incident in connection with which the hon. member for Winnipeg South (Mrs. Konantz) saw it in the distance but did not see the report itself. In other words, it is quite clear in the minds of hon. members that this is a document which the government feels is privileged and must not be seen by us, and I would take it, therefore, must not be used in public.
I hold in my hand a copy of the Winnipeg Free Press of Wednesday, November 27, 1963, on page 1 of which I find a story entitled "T.C.A. won't boost fares, house told", a story based on questions and answers in the house on Tuesday. The fourth paragraph in this story, which is written by the Winnipeg Free Press staff person here in Ottawa, reads as follows:
Gordon McGregor, president of T.C.A., was quoted in the Winnipeg Free Press yesterday as having announced that continuing the maintenance base in operation at Winnipeg until 1973 will cost T.C.A. an additional $19,800,000. This figure was contained in the Dixon-Speas report on the economic operations of T.C.A.
When I first saw that story I wondered how the staff person-and I won't be coy about it, the staff person here in Ottawa for the Winnipeg Free Press is my good friend Mr. Victor Mackie-had seen the report and knew that figure was in it. Then I find another story, also in the same issue of the Free Press on page 27, entitled "Anxious T.C.A. chief hits base decision". This is under the by-line of Victor Mackie and the first part of it reads:
Continuing the overhaul and maintenance base in operation at Winnipeg until 1973 will cost T.C.A.
an additional $19,800,000, according to the president of the air line, Gordon R. McGregor.
That figure was set out in the Dixon-Speas report, a spokesman for the air line said. He said that was what Mr. McGregor based his estimate on, the findings in the report.
The economic study had found that if T.C.A. did not phase out of its operation of the overhaul and maintenance base at Winnipeg by 1966, as was originally planned, and kept the base operating for another eight years, it would cost the air line $19,800,000.
It is a much longer story. There is a good deal in it that is interesting with respect to the conflict between Mr. McGregor's opinion and the opinion of the Prime Minister, but I do not wish to import into this question any extraneous material. My question of privilege as a member of parliament is that a document which we have been denied, a document- access to which has been denied the government of Manitoba-is being seen by other people, and some of its contents are being used by other people for arguments in connection with this issue that confronts the country and us in Manitoba in particular.
My view is that if we are to be denied the opportunity of seeing this report, no one should be able to make any public use of it. If Mr. Mackie is seeing this report-I do not think he is; I think he has just learned that somebody else has seen it-and if the president or spokesmen of the air lines are permitted to learn what is in it, I think the government of Manitoba, which is very much concerned with this matter, should see it and we in this house should have the right to see it. As I see it, the privileges of parliament are being violated by this incident as reported by the Winnipeg Free Press in the article I have just quoted. Therefore, on the basis of the question of privilege which I have raised, I move, seconded by the hon. member for Skeena (Mr. Howard):
That in the opinion of this house the government should give immediate consideration to the question of making public the contents of the report of R. Dixon-Speas and Associates on the economic operations of Trans-Canada Air Lines.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: You will note, Mr. Speaker, that I have limited my remarks and my motion to the one issue. I have not imported other things that could be said so far as this question is concerned; I have limited it to the one question of making the report public. I have even exercised restraint in the sense that my motion does not demand that the report be published, but simply says that the house

Question of Privilege
has the right to express to the government its view on this matter, in the light of what has happened, and asks the government to give consideration to the question of making public the contents of this report. I therefore move, seconded by my deskmate from Skeena, this motion based on my question of privilege.


Hon. G. J. Mcllraiih (Minister of Transport):: Mr. Speaker, I would like to take a moment to say something on the question of privilege that has been raised. I think I should first point out that what we are dealing with here is a report procured by Trans-Canada Air Lines from a firm of consultants. The former government, for some reason of its own but I presume a perfectly proper and correct reason, did not obtain this report, order its preparation or retain the firm of R. Dixon-Speas; rather, they requested Trans-Canada Air Lines to retain a firm of consultants, and Trans-Canada Air Lines did this.
The point was raised at the time, and the decision taken by the previous government was that it would not itself have this study undertaken but that the air lines would retain the firm. The air lines did that. The report was finally prepared some time, I think, in August-I am subject to correction on the date-and it does contain information of a nature that must remain confidential because it would be wholly destructive of the-


An hon. Member:: Liberal party.


George James McIlraith: Mr. Speaker, the hon. member shows his complete lack of appreciation of the subject matter with which we are dealing. The report does contain material that cannot be made public because it would materially damage the competitive position of T.C.A. vis-a-vis other air lines, because the information would be of a nature not normally given by operating companies to their competitors. There is great difficulty on that score.
I had hoped that when the report came it would be of such a nature that it could be readily tabled and made public. I well understand the position of the Manitoba government, who are interested in this subject, and of other persons who have a natural curiosity to see the report, but there are two points I wish to make. The first is that the report is not a government document. It is a report having to do with the internal management of a company obtained by the company itself; therefore there is that reason for not tabling it. But quite apart from that reason, which was never the main reason relied on for not tabling it, the report does contain material that cannot be made public.
I have spent a great deal of time on this subject since last August, I regret to have to

say, in an effort to meet the problem, and I finally came to the conclusion that the problem could be met by taking out of the report those parts of it which cannot be made public for obvious reasons. To that end I had the government retain R. Dixon-Speas and Associates to delete from the report those parts that are of a purely confidential nature to Trans-Canada Air Lines, and gather the rest together so that it could be presented to the house, to the government of Manitoba and to the public.
I gave a lot of thought to this matter. At one time I contemplated having the Department of Transport do the deleting and at another time having Trans-Canada Air Lines do it, but I came to the conclusion that no matter how carefully they did it they would be subject to the charge of being an interested party. So I then decided that the correct way of doing it was to retain the firm which had prepared the report, and this is in the course of being done now. I do not know when it will be available. I hope it will be very soon, but I cannot say precisely.


Stanley Howard Knowles: Mr. Speaker, may I ask the minister a question? Do I gather from what he is saying that in effect he is prepared to accept my motion, which simply asks that the government give consideration to the question of making the contents of the report public? I gather he is prepared to make portions of the report public, and in that sense he could meet the terms of the motion.


George James McIlraith: No, Mr. Speaker, I am sorry if I conveyed that impression. The motion is quite objectionable on grounds I thought I covered. It cannot be accepted in its present form because the report very clearly contains material that no responsible government could consider publishing. But I have taken steps, I believe, that will meet the difficulty the hon. member seeks to raise now, and those steps were taken some time ago. In that context I would think the hon. member's motion should be one of commendation of the government for already having taken those steps some weeks ago, but the motion itself is quite out of order.


Mr. T. C. Douglas (Burnaby-Coquillam):: Mr. Speaker, the Minister of Transport is quite correct when he says it was perfectly proper for Trans-Canada Air Lines to hire a consultant to look into the economic feasibility of moving the maintenance depot from Winnipeg. He is also quite right when he says that reports of this nature are usually confidential and privileged because they may contain information which, if made public, could do harm to Trans-Canada Air Lines or

any other crown corporation in its competitive capacity.
However, I think the minister has missed the vital point, that if the document is to be confidential and privileged to the government, then certainly neither the president of Trans-Canada Air Lines nor anyone else has any right to quote extracts from that report in substantiation of a particular line of argument. If they are permitted to do that they are advancing the conclusions of that report without the rest of us having any opportunity to study the bases upon which those conclusions were reached. We should have the right to see the computations and arithmetical foundation upon which this alleged loss of $19,800,000 is based. It is most improper, it seems to me, for use to be made of this report, isolated statements being taken from it and quoted in argument, and at the same time deny hon. members of this house access to the report. As a matter of fact the minister should be concerned about this statement.
It goes much further. My colleague from Winnipeg North Centre was being kind in not reading the rest of this comment. It quotes the president of Trans-Canada Air Lines as saying:
If the Winnipeg base is worth that ($19,800,000) then Mr. Pearson is the man to decide.
This is a clear allegation that a decision has been made which is uneconomic, unwise; that it will cost the country $19,800,000; and we have no way of knowing whether or not that is a conclusion which is warranted. The minister said that he could see no objection to releasing parts of the report provided the confidential parts of it were not disclosed. I submit to him that there is no reason why he should not accept this motion. The motion does not demand that the government table the report, but that it should take into consideration the tabling of it. The minister could accept that motion subject to the reservation he has just made, that there are parts of the report which he would consider it advisable to withhold. It seems to me that he should accept the motion now subject to the reservation he has made regarding the confidential sections of the report.


Hon. Lionel Chevrier (Minister of Justice):: Mr. Speaker, if I may, I think the point which is of most importance and which should not be lost sight of by the house is that the hon. member for Winnipeg North Centre raised this matter as a question of privilege. As the house knows, matters of privilege should be raised immediately, and this matter has been under discussion on a previous occasion.


Some hon. Members:: Oh, oh.
Question of Privilege


Lionel Chevrier: I do not use that last argument to suggest that this is not a matter which should be raised as a question of privilege. The point I am raising, however, is this: that this document is not a document of the government; this document is a document of a crown corporation. If there is a question of privilege here the hon. member for Winnipeg North Centre must tie in that privilege with the responsibility either of a member of parliament, or of a minister of the crown, or of the government itself. That is the link which is lacking at the moment in order to abide by the rules of the house.
That is why I agree with the hon. member for Burnaby-Coquitlam that what the Minister of Transport has said concerning his desire to give to the house a summary of matters which are not confidential and not of a technical nature indicates the desire of the government to assist hon. members to the extent that it can. But the point, and the only point at issue here in my opinion, is that this is not a document of the government but a document of a crown corporation; and under all the circumstances it seems to me that the house has already accepted the proposition that communications of this nature are privileged.


Stanley Howard Knowles: Mr. Speaker, on the point of order raised by the Minister of Justice, particularly the point about immediacy, may I point out that my question of privilege is based on two reports in the Winnipeg Free Press of Wednesday, November 27. Today is Friday, November 29. Even that is fast service. I saw these stories at nine or ten minutes to eleven this morning. I could not have raised a question of privilege much more immediately than I did.
As to the minister's suggestion that this is a report which belongs to a crown corporation, may I point out that it has been admitted several times by the Minister of Transport that he is in possession of a copy. He has made reference to it. He has cited it. He has told us why it cannot be produced. He has told us why he did not wish to disclose it to the hon. member for Winnipeg South. He told us this morning that he is studying whether or not to have extracts made, and who is to make the extracts. So, while the report may have been paid for by Trans-Canada Air Lines, a copy is in the minister's possession, and surely the air line is a responsibility of the government. If the government says this information must be kept confidential, and an emanation of the crown is making parts of it public, I suggest we have a question of privilege and the government itself should redress the wrong that has been done to us by making public at least sections of the report.

Question of Privilege
I want to emphasize what was said by my leader, the hon. member for Burnaby-Coquit-lam. It seems to me the course which the Minister of Transport should follow is clear. I would be happy to accept his reservation that the government should make public only those sections of the report which he feels would help clear up the situation. If he wishes to make the kind of reservation he has indicated I would be happy to accept it.


Hon. Gordon Churchill (Winnipeg South Centre):: I should like to ask the Minister of Transport a question before making certain observations. Would he verify the amount mentioned by Mr. McGregor as reported in the newspaper article? Is that the extra cost which would be involved in maintaining the base in Winnipeg?


George James McIlraith: That question is improper.


Some hon. Members:: Oh, oh.


George James McIlraith: The hon. member is seeking to make me disclose to him the contents of the report, and I have consistently refrained from doing this for the reasons I have explained. The hon. gentleman will be able to satisfy his curiosity about the answer to that question when the summary of the report is tabled. I cannot answer his question now.


Gordon Minto Churchill: Are we, then, to accept the statement of Mr. McGregor that this will be the extra cost if the base is maintained there, or are we to reject that statement. This is what has now complicated the issue. I am not going to accuse Mr. McGregor of not telling the truth, but if this is an inflated figure we should know about it immediately. If this is a figure which is going to influence the government in making a decision, and if it is a wrong figure, what position are we left in?
It seems to me the government must now take some action. The minister has told us repeatedly that he is relying on this report in order to reach a decision as to what should be done about the base in Winnipeg. The other members from Winnipeg have not been given a chance even to peek at the report. I have not even seen the volume, but apparently the report has now been partially disclosed by the president of T.C.A. If the government intends to make a decision based on the figure disclosed by him it seems to me we should know whether that figure is accurate or not. There is no question but that the government should now take immediate steps to clear up this issue.
The government of Manitoba has made a request to examine the report so they could put their case forward. In fact the Prime Minister has asked the government of Manitoba to present its case again. It did so in

June of this year and received what was understood to be an assurance by all those present, that the other factors would be taken into account in addition to any report made as a result of the Dixon-Speas economic survey. It is a very peculiar situation now in so far as the base in Winnipeg is concerned, when we learn that the medium jets are not going to be serviced there and that the Viscounts are going to be withdrawn. The assurance, therefore, was just a sop to attempt to bemuse the people of Winnipeg and the government of Manitoba.
This motion, Mr. Speaker, is certainly extraordinarily mild, stating only that the government should give immediate consideration to the question of making the report public. As the hon. member for Winnipeg North Centre has pointed out, he has tried to be very kind to the government, which is not an unusual position for him to take.


Stanley Howard Knowles: Order.


Gordon Minto Churchill: He has so worded the motion that the government can easily get off the hook. However, the situation has now reached the stage where the government must take some steps in order to clear up this situation. Is Mr. McGregor giving the right figure with regard to the base in Winnipeg or is he confusing the issue? Only the minister has seen the report and read it, and only he can clear this up.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: We listened to the hon. member for Winnipeg North Centre as he set out his reasons for raising a question of privilege. He made out a very good case, and one that deserves the support of the house. I feel that this question of privilege is one that is indicative of the need for action to be taken by parliament to secure information from this government which has shown a propensity for concealment or for selective information.


Some hon. Members:: Order.


John George Diefenbaker: I repeat, it has shown a propensity for selective information. However, after having made a strong statement the hon. member now puts a motion which, if it had been drawn in co-operation with the Secretary of State, could not have been weaker. I cannot understand this. It merely says that in the opinion of this house the government should give immediate consideration to the question of making public the contents of the report. I am impressed with the fact that there is a breach of the privileges and rights of parliament. I am also impressed by the wonderfully co-operative spirit in the motion which, as the hon. member for Winnipeg South Centre said a minute ago, is not unusual.


Stanley Howard Knowles: Order.


John George Diefenbaker: I suggest, sir, that this should be accepted as a question of privilege and that the government would be able to accept a motion as weak, as watered down as this, without any loss of prestige, and would be in the same position as they were a short time ago when they were able to join with the New Democratic party in their amendment. This is weaker than that. It is so worded that the government has an easy way out. I appeal to the government to take advantage of the opportunity the hon. member for Winnipeg North Centre has afforded them to get out of a very disagreeable position by means of a most agreeable resolution.


George James McIlraith: I will not avail myself fully of the same privilege the Leader of the Opposition made use of to discuss the government in a general way. I would point out to the hon. gentleman that it was his government which made the decision that this consulting firm should be retained by Trans-Canada Air Lines and who had refused to retain it themselves; it was his government which refused to take its responsibility as a competent government would have done. This step having been taken, we are today bound by it. I would point out further to the right hon. gentleman, if he wants to digress into this field, that this is precisely the thing we are finding in the departments so far as his government was concerned; that it could not make decisions or take responsibility.
Now, having said that, I want to address myself to the point at issue here, because the hon. member for Winnipeg North Centre has raised a point that deserves the consideration of the house. The point he raised was this, that we should accept as a question of privilege that with regard to an officer of a crown corporation using information concerning the internal operations of that crown corporation, after this information has been procured for its own purposes, such officer is now precluded from using such information without making public the whole of the report. I would draw the attention of this house to what is the relevant point here: Crown corporations, if they are to operate effectively, must have a right in their internal operations to retain professional people to prepare reports for them and to use the information obtained in these reports. This is standard practice with relation to architects, engineers and so on.
Surely it cannot be argued here that they are not able to do so, that there is a breach of privilege when the officer of a corporation makes a reference to the kind of conclusion that he says he obtained in that way. I was 28902-5-335
Question of Privilege
amazed at the argument of the hon. member for Winnipeg South Centre which was tantamount to this, that the information obtained by a crown corporation from outside experts should be treated differently from information obtained from its own employees. That is the absurdity which is inherent in his argument. As a former minister of the crown he should know better. It typifies exactly what put this whole subject matter in this position in the city of Winnipeg, that splendid city where the people are concerned about this subject.


Stanley Howard Knowles: Will the minister permit a question?


George James McIlraith: Yes.


Stanley Howard Knowles: When the government declares that a report is to be treated as confidential, does that not apply to all those who have copies of the report?


George James McIlraith: That is the very point I am making.


Some hon. Members:: Oh, oh.


George James McIlraith: The government is in the position that if the government had committed a breach of that confidence, the position might be different. This question before the house, however, arises because an officer of a crown corporation made a reference to a document he properly obtained and which he presumably obtained for the purpose of using it. That is the distinction that is to be drawn.


John George Diefenbaker: Would the minister allow a question?


George James McIlraith: Yes, I will extend the courtesy, not extended by the right hon. former prime minister and the hon. member for Winnipeg South Centre, to ask a question.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.


Hon. Leon Balcer (Three Rivers):: Mr. Speaker, I would like to speak on this question of privilege.


Mr. Speaker:: I do not want to limit the hon. member of course, but we have had an extended discussion.


Léon Balcer: A point has been raised by the minister, and we have heard about the case of the people of Winnipeg, but I would like to say a few words for the people of Montreal on this matter.


Mr. Speaker:: Order, please. Are you
speaking to the point of privilege or are you describing the beauties of Montreal?


Léon Balcer: The minister has raised doubts about the responsibility of the last government in matters of transportation, and said we were afraid to take our responsibilities.

Question of Privilege


Mr. Speaker:: I am sorry to interrupt the hon. member, but we are discussing a point of privilege. .


John George Diefenbaker: No, Mr. Speaker. On a question of order, the minister made gratuitous remarks-


Mr.   Mc@: To you.


John George Diefenbaker: -and the former minister of transport has the right to reply.


Mr. Speaker:: I appreciate the comments of the right hon. Leader of the Opposition, but this point of privilege has almost developed into a debate on both sides of the house. It is my duty to try to bring it to a conclusion and reach a decision as to whether the motion is in order. I think the extended discussion this morning almost proves the point that we are anticipating a grievance or a debate. For example, citation 113 in Beauchesne's fourth edition says:
Members often raise so-called "questions of privilege" on matters which should be dealt with as personal explanations or corrections, either in the debates or the proceedings of the house. A question of privilege ought rarely to come up in parliament. It should be dealt with by a motion giving the house power to impose a reparation or apply a remedy.
Well, we have a motion in front of us, which I am glad to say is the customary procedure, and I wish it were followed more often. But it has to be decided whether this motion is in order. In my opinion the hon. member for Winnipeg North Centre could easily put a notice on the order paper asking for the production of papers. At that time the government could make up its mind whether to accede or not. In the light of these circumstances, and in the light of the extended discussion this morning, I regret to say I do not see a prima facie question of privilege on this matter.


Stanley Howard Knowles: With respect, Mr. Speaker- I know I cannot argue at this point-but in view of what has been done to parliament in this matter, I must appeal your decision.


Mr. Speaker:: The house has heard the decision of the Chair from which the hon. member for Winnipeg North Centre has appealed to the house. All those in favour of sustaining the decision of the Chair will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Speaker:: Call in the members.

Mr. Speaker put the question as follows: The question before the house is an appeal from a ruling of the Chair, which is as follows:
The hon. member for Winnipeg North Centre rose on a question of privilege and proposed a motion as follows:
"That in the opinion of this house the government should give immediate consideration to the question of making public the contents of the report of R. Dixon-Speas and Associates on the economic operations of Trans-Canada Air Lines."
I stated that in my opinion the hon. member could put a motion on the order paper in order to permit the house to take a decision on the question. That being so, I ruled that there was not a prima facie question of privilege in regard to the proposed motion; whereupon the hon. member for Winnipeg North Centre appealed to the house from this decision.


Mr. Speaker:: I declare the decision sustained.


Mr. H. Pit Lessard (St. Henry):: Mr. Speaker, I was paired; had I voted, I would have voted to sustain your ruling.


Mr. Pennell:: Mr. Speaker, I was paired with the hon. member for Middlesex East (Mr. Millar). Had I voted I would have voted to sustain your ruling.


Mr. Mitchell:: Mr. Speaker, I was paired and did not vote. Had I voted I would have voted to sustain your ruling.



COMMITTEES OF THE HOUSE


[Stage Direction]
Third report of standing committee on railways, canals and telegraph lines-Mr. Boulanger.

[Stage Direction]
Mr. Gerard Loiselle (St. Ann) presented the fourth report of the standing committee on standing orders, and moved that the report be concurred in.
Motion agreed to.
28902-5-335|
Proposed Legislation EXTERNAL AFFAIRS

Hon. Paul Martin (Secretary of State for External Affairs):: I move, seconded by my colleague the Minister of National Defence (Mr. Hellyer):
That items numbered 1 to 155 inclusive, and items numbered L10 and L15, as listed in the main estimates, 1963-64, and items numbered la to 117a inclusive, and items numbered LlOa and L13a, as listed in the supplementary estimates (A), 1963-64, relating to the Department of External Affairs, be withdrawn from the committee of supply and be referred to the standing committee on external affairs, saving always the powers of the committee of supply in relation to the voting of public moneys.
In making this motion, I wish to point out an obvious error in the printing of the supplementary estimates at item LlOa on page 25. This item should refer to an additional advance to the working capital fund of the United Nations organization and not to the world health organization.


[Stage Direction]
Motion agreed to.


Mr. H. A. Olson (Medicine Hat) moved: for leave to introduce Bill No. C-114, to amend the Canada Grain Act (off-track elevator licensing).


Stanley Howard Knowles: Explain.


Horace Andrew (Bud) Olson: The purpose of this bill is to revise the definition of "elevator" under the Canada Grain Act so that an inland elevator is no longer restricted to premises served directly by a railway. The amendment thus authorizes the board of grain commissioners to license premises which are off-track and served by other means of transportation.
Motion agreed to and bill read the first time.



QUEBEC SAVINGS BANKS ACT


Mr. Jean-Eudes Dube (Restigouche-Mada-waska) moved: the first reading of Bill No. S-46 (from the Senate), to amend the Quebec Savings Banks Act.
He said:

Mr. Speaker, before the adoption of the motion for first reading of this bill which was sent to the house by the Senate, I should

Inquiries of the Ministry like to say a few words about the subsequent consideration of the bill by the house.
Hon. members know that after the bill has been read for the first time, it will take its place at the bottom of a long list of public bills on the order paper. Consequently, it is unlikely that the house will be able to consider it during the present session.
As this legislation is of some importance to the management of the two savings banks concerned, I intend to ask, when public bills are called at five o'clock, that the house unanimously agree to give priority to this bill.
Meanwhile, I shall now ask that the bill be read for the first time.

Motion agreed to and bill read the first time.


Mr. Speaker:: Hon. members have heard the suggestion made by the hon. member for Restigouche-Madawaska. Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: When shall said bill be read the second time. Later this day.



ROYAL CANADIAN AIR FORCE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to direct a question to the Minister of National Defence, and ask whether he will bring the house up to date on any investigation which is taking place with respect to the Penhold air base and as to any probability of the order being altered which was made earlier to the effect that jet training would not be permitted at that base.


Hon. Paul Hellyer (Minister of National Defence):: I have nothing new to add. My colleague the Minister of Transport is carrying out a careful review of air safety requirements in respect of all air training bases. No conclusions have been reached so far, I suspect; consequently there has been no change in the decision announced with respect to Penhold.


John George Diefenbaker: Does the hon. gentleman still take the stand that the safety regulations which, he said, forbade the use of this base, might be altered so as to permit the change in that decision?


Paul Theodore Hellyer: Mr. Speaker, all I said was that safety regulations made it impossible to use the Penhold base for ab initio jet flying training.
[Mr. Dube.)



REQUEST FOR INQUIRY INTO CRASH OF CF-100 PLANE

[Stage Direction]
On the orders of the day:
["Mr. Speaker, yesterday the hon. member for Villeneuve (Mr. Caouette) asked me whether I was in a position to confirm or deny the existence of a spy ring within my department, as stated in an Ottawa newspaper, the South End News.\nTo give a specific reply to the hon. member's question, I emphatically deny that there could be a Russian spy ring within the Department of External Affairs. The departmental officials are constantly in touch with the R.C.M.P. with regard to all matters relating to the security of the department, and there is no actual fact to confirm such an allegation."]
Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, I have a question I wish to put to the Minister of National Defence. Having regard to the fact that a member of the crew was a native of my home town, and indeed a personal acquaintance, can the minister report to the house on the crash of the CF-100 jet aircraft near St. Hubert air base yesterday, and if a full investigation into the causes will be carried out.


Paul Theodore Hellyer: Mr. Speaker, at 1300 hours local time on November 28 an R.C.A.F. CF-100 crashed one mile from the end of the runway while on final approach at R.C.A.F. station St. Hubert. The pilot, Flying Officer D. B. MacKenzie, and the navigator, Flight Lieutenant W. C. Henderson, were both killed. The reason for the accident is not known at this time, but a full investigation is being held.



[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, yesterday the hon. member for Villeneuve (Mr. Caouette) asked me whether I was in a position to confirm or deny the existence of a spy ring within my department, as stated in an Ottawa newspaper, the South End News.
To give a specific reply to the hon. member's question, I emphatically deny that there could be a Russian spy ring within the Department of External Affairs. The departmental officials are constantly in touch with the R.C.M.P. with regard to all matters relating to the security of the department, and there is no actual fact to confirm such an allegation.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, I have a question for the Minister of National Defence based on a statement he made in a speech at the Empire club in Toronto yesterday. He was referring to the NATO allies and the sentence reads as follows:
They prefer to deter both nuclear and nonnuclear attack by the threatened immediate use of

tactical atomic weapons and to accept the risks inherent in this strategy.
Would the Minister of National Defence tell us which of the allied nations in NATO prefer that use of atomic weapons?


Paul Theodore Hellyer: No, Mr. Speaker, I do not think that would be helpful. I think it is well known that there is some difference of opinion in respect of strategy. Our main interest is to seek agreement so we can have a strategy which is fully supported by all members of the alliance. A meeting of the NATO council of ministers is taking place shortly, and it would not be the least bit helpful to mention now any of the positions that may be taken by different delegations.


Gordon Minto Churchill: Then may I ask a question of the minister for external affairs. What steps will the minister for external affairs take at that NATO meeting in December to ensure that there shall be no use of either tactical or strategic atomic weapons without the concurrence of the NATO allies?


Paul Joseph James Martin: I am sure the hon. gentleman, as an experienced minister of the crown, knows how improper that question is at the present moment.


Gordon Minto Churchill: I am asking for the position of the Canadian government in a matter of vital importance to the peace of the world. Let me phrase my question again. I am asking the minister what steps he is going to take on behalf of the Canadian government and the Canadian people to ensure that no nation within the NATO alliance will use either tactical or strategic atomic weapons without the concurrence of the other allies.


Paul Joseph James Martin: My hon. friend knows quite well that the response I gave him a moment ago was the response which he, as a responsible minister, if he were on this side, would give. These are matters which the government makes public at the appropriate moment, and this is certainly, in the interest of the alliance, not the time to give the kind of response which my hon. friend encourages me to make.


John George Diefenbaker: I am surprised that the affable minister should answer in that way. Has not parliament the right to know, on a matter as important as this, the stand that Canada is going to take?


Paul Joseph James Martin: My right hon. friend is quite correct. Parliament has the right to know the position of the government. But the government has the responsibility of saying when it shall inform parliament concerning government policy.
Inquiries of the Ministry


John George Diefenbaker: The same old contempt of parliament.


Hon. Paul Martineau (Ponliac-Temisca-mingue):: I should like to ask the Minister of National Defence a question arising out of his Toronto speech. Would he care to elucidate the statement made in the course of that speech, that the situation of one half of our air division is clearly not satisfactory? If it is not satisfactory, what is the government going to do about it?


Paul Theodore Hellyer: I think the statement speaks for itself. I said it was not satisfactory, and I proposed to make recommendations in respect of it in the very near future.


Paul Raymond Martineau: When is that?


Paul Theodore Hellyer: In due course.


Thomas Clement (Tommy) Douglas: I have a supplementary question for the Secretary of State for External Affairs. He said a moment ago that the government reserved the right to tell parliament when it had reached a decision. May I ask the minister if parliament will be informed before any commitment is made by the government of Canada, or afterward?


Paul Joseph James Martin: My hon. friend, who has had long experience as the head of a government, knows that the answer to that kind of question would depend on the circumstances.


Thomas Clement (Tommy) Douglas: May I ask a supplementary question. Would the minister tell us the circumstances which would determine when parliament would be informed?


Paul Joseph James Martin: As an experienced parliamentarian and former head of a government, my hon. friend knows that the answer to that must be that it would depend on the situation at the time.



BOBCAT PERSONNEL CARRIERS


[Stage Direction]
On the orders of the day:
Hon. D. S. Harkness (Calgary North):: should like to direct a question to the Minister of National Defence. In view of the statement in his speech yesterday that the brigade in Europe is in urgent need of armoured personnel carriers, could he inform the house whether the pre-production run of 20 Bobcats has been completed, and if not what is the reason for the long delay in this program which should have reached this stage quite a long time ago?


Paul Theodore Hellyer: Mr. Speaker, the development has not reached the stage where the vehicle is technically perfect, and the hon. gentleman

Inquiries of the Ministry is just as familiar with the reasons for that as I am.


Douglas Scott Harkness: May I ask a supplementary question. This pre-production run should have been completed some months ago. I asked the minister, what is the reason for the delay in completing the run of 20 vehicles?


Paul Theodore Hellyer: Well, generally speaking I would say three or four years of not pressing it as quickly as might have been the case.


Paul Raymond Martineau: Does the minister agree that this situation is seriously interfering with the operation of our armoured brigade in Europe?


Paul Theodore Hellyer: Yes, I think it is a quite unsatisfactory situation.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I should like to direct a question to the Acting Prime Minister.
Could the minister tell the house whether the hon. member for St. Paul's is informally speaking for the government when he is suggesting the merger of the New Democratic party in this house with the Liberal party, since according to the hon. member, the socialist party is only a radical wing of the Liberal party?



TRANS-CANADA AIR LINES WINNIPEG MAINTENANCE BASE    STATEMENT BY PRESIDENT AS TO COST

[Stage Direction]
On the orders of the day:
Léon Balcer: Since the Minister of Transport is one of the privileged few who have read and reviewed carefully the Dixon-Speas report, I wonder if he could tell the house whether he agrees with the figure of $19,800,000 that has been mentioned by Mr. McGregor as the loss to T.C.A. if the maintenance base in Winnipeg is not moved to Montreal.


George James McIlraith: Mr. Speaker, it would be quite improper for me to start disclosing the contents of the Dixon-Speas report, having refused to table it in the house for very good reason.


Léon Balcer: May I ask a supplementary question. Is the minister going to reprimand the president of T.C.A. for doing exactly that?


George James McIlraith: I trust that the hon. member for Three Rivers is referring to the earlier discussion this morning, and he will have noticed that the hon. member for Winnipeg North Centre, in raising this matter, was very careful not to indicate Mr. McGregor did that.



DOMINION-PROVINCIAL RELATIONS PROVINCIAL PARTICIPATION IN DEVELOPMENT OF FEDERAL POLICIES

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Acting Prime Minister. In view of the fluid and changing relations between the federal government and the provinces, will the provinces in future have any share whatsoever in the development of federal government monetary, tariff and transportation policies?


Lionel Chevrier: Mr. Speaker, I cannot recall, other than in the fiscal field, whether that matter was on the agenda, because I was not present during all the discussions; but it would seem to me that some of those matters are exclusively under the jurisdiction of the federal government, whereas others are for discussion between the two levels of government.



PROTECTION OF CARIBBEAN MARKETS IN MAKING NEW CONTRACTS

[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I would like to direct a question to the Minister of Trade and Commerce. Recent newspaper reports have stated the government is considering the possibility of a long term sugar contract with Rhodesia. As any diversion of sugar purchases from Caribbean countries could have a serious effect upon the markets for maritime salted, pickled and smoked fish, would the minister give serious consideration to this problem before entering into any contract that would further disrupt our present salt fish markets?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: Mr. Speaker, I would like to assure the hon. gentleman that this kind of consideration will certainly be taken into account in any forthcoming discussions with commonwealth sugar producers. I think I should assure him, however, that I do not believe any of these discussions are likely to have the kind of adverse effects on the trade of the maritime region that he fears.

Inquiries of the Ministry



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. E. Nasserden (Rosthern):: Mr. Speaker, I would like to direct a question to the Minister of Agriculture. Is it a fact that he did indeed address the Saskatchewan Liberal association in Regina city last Tuesday, November 27?


Hon. Harry W. Hays (Minister of Agriculture):: Last Tuesday; that is correct.


Some hon. Members:: You were sick.


Edward Nasserden: As a supplementary question, I wonder could the minister tell us whether he was sick before he went to the meeting, or after?


Harry William Hays: Mr. Speaker, I think the day I was absent here was Wednesday, not Tuesday; and they were surely not sick after I spoke to them.



DOMINION-PROVINCIAL CONFERENCE REPORTED CHANGES IN EQUALIZATION PAYMENTS

[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I have a very brief preamble to my question, which is to the Acting Prime Minister. In a press release from the dominion-provincial conference last night or early this morning it is stated that the additional revenues that will accrue to the provinces are something as follows. In the case of Quebec there will be an additional equalization direct grant of $35 million and an additional $7 million in succession duties. In the case of Ontario an additional $14 million in succession duties only, with no increase in equalization payments. In the case of British Columbia there will be somewhat less than $4 million out of succession duties, and nothing from equalization payments. I wonder whether the Acting Prime Minister would care to state is this new Liberal formula of mortar for the construction of confederation on into the future?


Lionel Chevrier: Mr. Speaker, the preamble to the hon. member's question was unquestionably one which indicated his intention to initiate a debate. I shall not follow in that area but I would say, notwithstanding what the hon. gentleman has said, that in so far as equalization payments are concerned that has been the policy of the government, and has been announced for the last two years. There is
no discrimination toward any province so far as the formula is concerned, and while I was at the conference this morning it seemed to me that with but very few exceptions there seemed to be on the part of the premiers acceptance of the formula.


Thomas Clement (Tommy) Douglas: May I ask the Acting Prime Minister why the government has departed from its own announced policy of raising the equalization formula to the level of the wealthiest province, and has brought in extraneous matters such as the consideration of natural resources?


Lionel Chevrier: I think that is a matter which is leading into debate, and I can well understand why the hon. gentleman would want to know the answer to the question. I think that should be left for a discussion of the matter, and I understand the Prime Minister will make a statement when he returns to the house on Monday.


Mr. Stuart A. Fleming (Okanagan-Revelstoke):: The Acting Prime Minister has stated there were two exceptions to the rule of agreement this morning. Would he please advise the house who raised the objections and on what grounds?


Lionel Chevrier: Well, Mr. Speaker, the conference is not over yet, and it is one wherein the statements are not made public except those given to the press at the beginning or end of sessions, such as was the case last night. I do not think I should make any further statement or add to my responses to this question.



INDUSTRY


[Stage Direction]
On the orders of the day:
Horace Andrew (Bud) Olson: Mr. Speaker, I would like to address a question to the Minister of Industry. Could he now answer the question respecting the heavy water plant in Canada, which was directed to him through the Acting Prime Minister yesterday?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I am sure all hon. members will appreciate that the government has been preoccupied during the past week with matters of substantial national importance, and as a consequence has been unable to give proper consideration to this particular question. I would hope that very early next week a decision will be announced.

Inquiries of the Ministry POWER



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. Grant Deachman (Vancouver Quadra):: Mr. Speaker, I wish to address a question to the Secretary of State for External Affairs. Can he tell us whether he has availed himself of the presence of the premier of British Columbia in Ottawa this week to discuss the Columbia river treaty and, if so, were the discussions encouraging?


Paul Joseph James Martin: Mr. Speaker, I have seen the premier of British Columbia three times this week. I had the pleasure of breakfasting with him early this morning, and the discussions we had were very satisfactory. We are both of the same mind in respect of discussions that should be under way very shortly with the government of the United States.


Stuart A. Fleming: As a supplementary question, on a number of occasions it has been stated by both the Secretary of State for External Affairs and the Prime Minister that only one outstanding question remains to be resolved, the question of price. Can the minister now advise the house what other outstanding questions there are, and what resolution has been made on them?


Paul Joseph James Martin: I think my hon. friend will understand that it would not be advisable to reveal the nature of the negotiations; but the question of price is the final matter to be determined, and the province of British Columbia and the government of Canada see eye to eye on that particular subject which is now vital in these negotiations.


Stuart A. Fleming: Would the minister please advise the house how it is possible that if the question of price can be revealed, other matters must be kept secret?


Mr. Marlin (Essex Easl):: The hon. gentleman will have to trust to the good judgment of the negotiators on this matter, because I do not propose to reveal anything that would in any way disclose matters involved in negotiations; to do so might be prejudicial at this time to the interests of Canada and British Columbia.


Herbert Wilfred Herridge: In
view of previous statements made by the Prime Minister over a period of time, would the minister give his word as a minister that the negotiations will be completed by January 1, 1964?


Paul Joseph James Martin: I am sure my hon. friend is not serious in that question. But I may say to him that the government and the minister are doing everything they possibly can to bring to a successful conclusion the negotiations that have been under way for some months.


John George Diefenbaker: Mr. Speaker, arising out of this discussion and the very complete answers the minister has given, I would ask him whether an opinion has been asked of the law officers of the crown regarding the question of the availability for irrigation purposes of waters from the Columbia being diverted into Saskatchewan. He has received representations from the government of that province in this connection. Has the minister looked into this question and is he assured that, on the basis of the treaty as it now is, diversion of the necessary water for irrigation purposes in Saskatchewan is possible under the treaty?


Paul Joseph James Martin: Mr. Speaker, I am not aware that the law officers of the crown have specifically been asked for an opinion, for the simple reason that I do not think there is any doubt about the implications of article 13, part 1, of the treaty.


John George Diefenbaker: I gather from that answer, Mr. Speaker, that the minister, having made the usual careful study for which he is noted, has concluded there is no basis for the fears of the government of Saskatchewan that diversion would be denied them under the treaty as it now stands.


Paul Joseph James Martin: Under the article to which I have referred it is clear that consumptive uses provide an opportunity for the irrigation to which the province of Saskatchewan feels it should be entitled under the treaty. I have given the premier of Saskatchewan my view of the implications of the treaty. If the premier does not accept that, it is of course not my responsibility.


Herbert Wilfred Herridge: A supplementary question, Mr. Speaker. In view of the fact that Saskatchewan cannot take advantage of the water under this item covering consumptive uses without there being pumping on one side and the production of electrical energy on the eastern slopes of the Rockies, can the minister say whether that article meets this multiuse purpose?


Paul Joseph James Martin: Mr. Speaker, I think the answer I have already given covers the question which my hon. friend has put so lucidly.



INCOME TAX LIABILITY FOR AWARD TO VICTIM OF NAZI PERSECUTION

[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Royal: Mr. Speaker, I wish to direct a question to the Minister of National Revenue. Will the minister exercise that side of his nature favouring equity and arrange, by legislation or otherwise, to nullify the effect of the ruling of the tax appeal board published yesterday, which held that an award of compensation to Phillip Koller, as a persecuted Jewish person, by the district board of compensation of West Germany is subject to Canadian income tax?


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


Mr. Fairweather:: I submit, Mr. Speaker, that the treatment by Canada of victims of nazi-


Mr. Speaker:: Order, please. There is no dispute about the importance of the question; it is just the timing of the question that is wrong.



WORLD FAIR


[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolielle-L'Assomplion-Montcalm):: Mr. Speaker, I should like to direct a question to the Minister of Public Works. Is it true, as indicated in La Presse of Montreal, that the world exhibition authorities are thinking of changing the site's plans following unforeseen difficulties concerning the filling up of St. Helen and Notre Dame islands?


Hon. J. P. Deschateleis (Minister of Public Works):: Mr. Speaker, I am aware of the report published in La Presse, which refers to a statement made by Mr. Lucien Saulnier. I am not in a position to confirm or deny any of the facts contained in it. My hon. friend will understand that, before saying anything on the matter, I shall have to get an official report.
Now I must say that the city of Montreal authorities are responsible for the completion of the site before June 30, 1964, and even if it were true that part of the original plans would have to be altered in the course of the work, I am convinced that this will not prevent the fair from taking place on the St. Helen's complex and to be a great success.


Louis-Joseph Pigeon: A supplementary question, Mr. Speaker. If major or minor changes are
Inquiries of the Ministry brought forth, must the fair authorities submit such changes to the bureau of international exhibitions?


Jean-Paul Deschatelets: Mr. Speaker, I have no direct means of communication with the authorities of the city of Montreal, but following the information conveyed to me and published in the newspapers, I will surely request the commissioner of the exhibition to report to me on the situation. [Textl



REQUEST FOR APPOINTMENT OF LIAISON OFFICER

[Stage Direction]
On the orders of the day:
Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, the Minister of Public Works has clearly shown this morning that he was badly informed about the situation in Montreal, as far as the world fair is concerned.


Mr. Speaker:: Order, order, please. Be kind enough to formulate your question.


William Heward Grafftey: My question stems from that lack of information.
Did not the government appoint a liaison officer in order to be informed as quickly as possible of what is going on in Montreal as far as the world fair is concerned?


Jean-Paul Deschatelets: Mr. Speaker, of course I do not accept the premises of the question of my hon. friend. I said a while ago that I would always refuse to comment on a statement before having an official and complete report. If I did otherwise, I think that my hon. friend would be the first one to blame me.


William Heward Grafftey: Correct.


Jean-Paul Deschatelets: As far as the appointment of a liaison officer is concerned, I can say that for the time being I myself am this liaison officer. This aspect of reorganization will be considered later, but as soon as a liaison officer is appointed, if it is necessary, the house will be informed. [Textl



HOUSING


[Stage Direction]
On the orders of the day:
Hon. J. R. Garland (Minisler of National Revenue):: Mr. Speaker, yesterday the hon. member for Yorkton asked a question as to the regulations in connection with the winter house building incentive program. While the conditions as to eligibility referred to by the hon. member come under the jurisdiction of the Department of Labour, the function of Central Mortgage and Housing Corporation is primarily one of inspection in connection with

Inquiries of the Ministry this matter. I thought I should make a short statement in reply today, because the inspection will be taking place this week end. I would advise the hon. member that the conditions of eligibility stipulate that to provide the maximum employment during the winter months, construction must not proceed beyond the first floor joist stage prior to December 1, 1963. To provide for the processing of applications and the undertaking of the necessary on-site inspections by that date, applicants have been requested to mail their applications to the Department of Labour by November 10. I am advised that this date was selected to encourage the submission of applications well before November 30.
Applications can, of course, be submitted after November 10, and it may be of interest to the hon. member as well as to other members of the house to learn that up to November 10, some 19,000 applications were received. Since that time an additional 5,000 applications have reached the Department of Labour. I am happy to report that all applications to date have been processed and every effort will be made by the staff of Central Mortgage and Housing Corporation to inspect all these houses this week end.
Any applications received after December 1 will also be accepted. Construction, however, in these cases should not exceed the first floor joist stage before an inspection has been arranged and an applicant informed of the result of this inspection. The Department of Labour is asking that applications be mailed at least 15 days prior to the date on which an inspection is desired.


Mr. Arnold Peiers (Timiskaming):: A supplementary question, Mr. Speaker. Can the minister inform the house whether there is any unreasonable delay in the inspections, or does it appear that the department has enough inspectors to carry out these inspections quite speedily?


John Richard Garland: Mr. Speaker, I do not know whether I heard the hon. member correctly, but inspection is not to take place until this week end, and it will take place at that time.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. Maurice Cote (Chicoutimi):: Mr. Speaker, I have a question for the Secretary of State. Has the Secretary of State taken steps to set right the situation revealed in a collective letter to the newspapers, signed by eight federal civil servants and denouncing the


treatment of French speaking university graduates, who are deprived of their rightful positions in favour of English speaking candidates who never went beyond high school?


Hon. J. W. Pickersgill (Secretary of State):: Mr. Speaker, I am not familiar with the subject, but I will look at the hon. gentleman's question and answer it at the first opportunity.



PENSIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question either to the Acting Prime Minister or the Minister of National Health and Welfare. Can the government give to the House of Commons the assurance which the Prime Minister is reported as having given to the press, that legislation respecting the Canada pension plan will be presented to parliament at the next session?


Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: Mr. Speaker, I thought I had given that assurance as warmly, as vehemently, as categorically as I could on a previous occasion.


Stanley Howard Knowles: Would the Minister of National Health and Welfare take this opportunity, having regard to yesterday's sessions of the federal-provincial conference, to confirm that assurance?



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: My question is directed to the Minister of Public Works.
Following many articles published in the Ottawa newspaper Le Droit by Mr. Gerard Morin, did the minister receive the brief prepared by the city of Hull requesting federal buildings, and does he intend to take action?


Jean-Paul Deschatelets: The matter is under study, Mr. Speaker.



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


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.

['Do I understand the minister will not make a statement until Monday saying that the heavy water plant is coming to Nova Scotia? Do we have to wait till then for the word?\nResolutions adopted in committee of supply this day reported and concurred in.']
John Whitney Pickersgill: Resolved, that a sum not exceeding $377,400,841.02, being the aggregate ol-
(a)	one-twelfth of the total of the amounts of the items set forth in the main estimates for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, except agriculture item 100, atomic energy item 5, external affairs items 78 and 107, fisheries item 43, mines and technical surveys items 45 and 80, northern affairs and national resources items 5 and 10, public works items 20 and 190, transport item 35 and loans, investments and advances item L20 for which no amount is being released, $318,822,963.00;
(b)	an additional two-twelfths of external affairs item 105 and finance item 45, $4,700,000.00;
(c)	an additional one-twelfth of mines and technical surveys item 140, national film board item 1, northern affairs and national resources item 80, post office items 5, 10 and 15, public works items 150 and 165, transport items 40 and 220, loans, investments and advances item L70, $21,342,422.50;
(d)	one-twelfth of the total of the amounts of the items set forth in the supplementary estimates (A) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, except external affairs items 96a and 117a, finance item 5a, northern affairs and national resources item 110a, and loans, investments and advances items L13a and L63a for which no amount is being released, $24,023,455.00;
(e)	an additional one-twelfth of finance item 45a, $83,333.34;
(f)	one-twelfth of the amount of the item set forth in the supplementary estimates (B) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, $583,333.34;
(g)	one-twelfth of the amount of item set forth in the supplementary estimates (C) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, $1,666,666.67;
(h)	one-twelfth of the amounts of the items set forth in the supplementary estimates (D) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, except external affairs item 117d for which no amount is being released, $6,178,667.17;
be granted to Her Majesty on account of the fiscal year ending March 31, 1964.
He said: Mr. Chairman, I think everyone in the committee knows that the Minister of Finance had to be at the conference this afternoon, and he has asked me, in the formal sense, to substitute for him. If any hon. member is bold enough to wish to ask any questions of substance I hope he will direct them to the Acting Minister of Finance, who is much more expert in this matter than I. I hope in fact there will be a minimum of questions asked, and I say that for two reasons, which I will put to the committee in, I hope, a friendly and uncontentious spirit. The government has endeavoured during the session, and intends to go on endeavouring as rapidly as time will permit, to bring all departments before the committee of supply so
Interim Supply
there will be other opportunities for dealing with practically any subject that anyone might wish to bring up. The second reason is that I think all of us are conscious of the fact that this is the last sitting day in November, that it is the 99th day of this session, and-


Mr. Nowlan:: No, it is the 100th.


John Whitney Pickersgill: Yes, I was looking at yesterday's Votes and Proceedings. It is the 100th day of the session, and I thank the hon. member for Digby-Annapolis-Kings for supporting me in what I am about to say. I think all of us would like to go home for Christmas feeling that this session had been completed. It will be the endeavour of the government to secure every co-operation and to meet every desire of every hon. member opposite in all quarters of the house, as well as the government's supporters as well, to get the business done in an orderly fashion as quickly as possible. I am therefore appealing to all hon. members to give us this other month's supply. We are asking only for supply until the end of December, because we hope and expect, and I think all hon. members expect, that all the estimates will have been voted before the end of December.
I could go on and explain in detail what is contained in the bill, but I can assure hon. members that in no case is the government asking for the full amount of any vote. Therefore none of the ordinary rights of the committee of supply is denied or will be denied in any way by this bill. Unless I am specially asked to do so I do not intend to deal with the items for which more than one twelfth is asked. I think all hon. members know that some expenditures do not go on at an even pace throughout the year and more than one twelfth has to be asked for. I am prepared to give information on any of these if any hon. member wishes, but I think the matter is all very familiar to the committee, so I shall at once take my seat.


George Clyde Nowlan: Might I ask the Secretary of State, without his going through the usual wording, to give on behalf of the government the usual undertaking which every minister of finance gives when interim supply is asked for, that no debate will be precluded? In other words, the usual formal undertaking is being given by the Secretary of State?


John Whitney Pickersgill: Perhaps I did not give it in the usual language. I was trying to give it from memory, but I do give the undertaking that the full amount of no vote has been asked for, or is being asked for by the bill now proposed.

Interim Supply


George Clyde Nowlan: And no debate will be precluded because of any discussion which might take place.


John Whitney Pickersgill: No debate will be and no debate can be. But I do not mind expressing the hope that some of the debate will be abbreviated.


George Clyde Nowlan: Then in view of the plaintive plea which has just been made by the Secretary of State I will make my remarks very abbreviated indeed. I cannot help but recall that it was just a little short of one year ago, I think one year less a week, when I had the responsibility of sitting in another seat and asking this committee for interim supply.


Stanley Howard Knowles: And you gave the same assurance.


George Clyde Nowlan: I gave the same assurance, but the committee did not give me the cooperation I asked for and for which the Secretary of State is asking this afternoon. In fact I recall that we were six or seven days discussing the matter before we got one month's interim supply. Actually it was seven days, I am told.
The Secretary of State's eyesight appears to be not entirely effective, because he thought this was only the 99th day of the session. He might be trying to save a day, and I can understand that. But actually it is the 100th day and this is the ninth month, and the government is again asking for one month's supply. The record-and if we had one it could be played over and over again-tells the story of inefficiency of a government coming along in the ninth month of the fiscal year and asking for interim supply. I am sure the echoes are still resounding around the top of the chamber somewhere and I could bring them down here, but I am not going to do so. We were told a year ago that we should have followed this government's example; that we did not assemble immediately after the election; that we took off 60 days or two months during the summer when we could have been sitting here, and if we had not taken that time off we would have had no problem with respect to interim supply.
Now, Mr. Chairman, you remember what happened on this occasion. There was no delay. The ink on the writs was hardly dry and the writs hardly tabled by the returning officer before parliament had reassembled in May for the first 60 days of indecision. We have had indecision ever since, and we are facing it now.
I could go on and on but I will yield to the pleas of the Secretary of State and will not make any extended remarks this afternoon.
We are in the ninth month of interim supply now. I hope, with the Secretary of State, that

before this interim supply expires the committee will have passed the estimates and we shall not need any further interim supply. I can say that from the heart, because I had the same wish last year. It was denied to me. I hope it will not be denied to the Secretary of State, because this time we have an opposition which is co-operating fully with the government in every way.


Some hon. Members:: Hear, hear.


George Clyde Nowlan: I appreciate that there is unanimous acceptance of that fact in all corners of the house. I can assure the hon. gentleman that as far as the opposition are concerned we shall continue to give the same degree of co-operation as we have shown so far. I hope that before Santa Claus comes climbing down the chimney we shall have passed all the estimates of the various departments.


Thomas Clement (Tommy) Douglas: Mr. Chairman, the members of this party are naturally influenced by the conciliatory mood of the Secretary of State, and we shall co-operate in seeing that this interim supply measure is passed as expeditiously as possible. However, there are one or two things which I think ought to be said on this occasion.
During this week the federal-provincial conference has been meeting here in Ottawa. It was hailed in some quarters as the most important federal-provincial conference since confederation. Personally I would doubt that. I think something like that is said almost every ten years about one or other of these conferences. However, there is no doubt this has been an important conference, particularly in view of some of the statements which were made before it opened. I think its deliberations and what might emanate from them could have far reaching implications for Canada.
The New Democratic party was probably the first party in Canada to devise a program called co-operative federalism which we incorporated in our founding program statement in 1961. Whether we were the first or not, we certainly did enunciate a program for co-operative federalism. I wish to say something about our views on co-operative federalism. To me it means working together to make our federal system work, not for one province or for one region but for all Canadians. It does not mean looking upon Canada as a loose federation of autonomous provinces held together by a central government bereft of legislative or fiscal confidence. I do not think the people of this country look upon themselves primarily as Quebecers, Nova Scotians, British Columbians and so on. They look upon themselves first and foremost as

Canadians. They look upon a federal-provincial conference as a meeting of Canadian leaders representing Canadian provinces and concerned with the problems of the Canadian people.
The purpose of such a conference should be to set national goals and, having done so, to co-operate in working for their attainment. This cannot be done by fragmenting Canada into semi-autonomous states, nor by reducing the powers of the federal government to the point where it has little to do except collect taxes and excise duties and run the post office. The New Democratic party believes Canada is more than the sum total of its parts. Economically we are an organic unit striving to achieve a Canadian identity and Canadian unity. I do not think the people of Canada want this country balkanized according to provincial boundaries or geographical locations.


John Whitney Pickersgill: Would the hon. gentleman permit me to ask a question? Is it not true that at the convention of his party they adopted the idea of the two nations?


Thomas Clement (Tommy) Douglas: If the Secretary of State would possess himself in patience I will deal with that in a few moments. I have all the time in the world, if he has, so we could continue this debate indefinitely.


John Whitney Pickersgill: I regret already having asked that question.


Thomas Clement (Tommy) Douglas: I was trying to expedite the matter, but I will certainly deal with this at greater length when I come to the question of the two nations.


John Whitney Pickersgill: I withdraw the question.


Thomas Clement (Tommy) Douglas: The Secretary of State usually gets the estimates through in spite of himself. I was saying, when I was unnecessarily interrupted, that I did not think the Canadian people want to see this country balkanized according to provincial boundaries or geographical regions. They want their provincial governments to have the revenues necessary to discharge their constitutional responsibilities; but equally they want a federal government with legislative authority and fiscal capacity to promote economic growth, full employment and equality of opportunity for every Canadian irrespective of where he may live.
The whole trend of our times is toward greater economic co-operation among states, even among nations which have been bitter enemies for centuries and which in the past have gloried in their absolute national sovereignty. In the European economic community six nations are not only integrating their economies but are moving toward the free
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movement of people across national boundaries and the establishment of uniform, portable social security benefits. It would be ironic indeed if at the very time when Europe is welding its economies into an efficient unit, we in Canada were to splinter this country into ten economically weak fragments.
If Canadians are to enjoy prosperity, full employment and adequate social security, our economy must continue to expand.


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


Thomas Clement (Tommy) Douglas: Perhaps it could be asked later.


Erik Nielsen: Mr. Chairman-


Thomas Clement (Tommy) Douglas: I said no. I have the floor. Would the hon. member sit down? I do not intend to be interrupted.


Erik Nielsen: On a point of order-


The Chairman:: The hon. member is rising on a point of order.


Erik Nielsen: Would the hon. gentleman identify the document from which he is reading?


Thomas Clement (Tommy) Douglas: That is not a point of order. I am reading from some notes on this subject. If that is the most profound observation the hon. member for Yukon can make on this serious subject I think he had better remain silent.
Our economy will only expand if we can compete in the markets of the world with such industrial giants as the United States, Great Britain, West Germany and Japan. We cannot meet this type of competition by a process of fragmentation. We can only grow if we are unified into a strong economic entity with a deep seated sense of national purpose and capable of making national decisions.
I am not urging more centralization, but I am pleading for a federal system in which there will be more co-operative planning at the federal and provincial levels directed toward objectives which are worthy of Canada. Demagogic appeals to local self-interest may be popular for a time, but I do not think they will commend themselves to the Canadian people as a whole. What will it profit this country if one or two areas prosper while others languish in economic decay? A chain is only as strong as its weakest link and confederation is only as strong as its weakest member. If Canada is to grow and prosper it must do so as a unit. Having poor relations may give one a feeling of superiority but it never leads to lasting friendship. If Canada is to go forward it must go forward as one people, with two languages-

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Erik Nielsen: Mr. Chairman, I rise on a point of order. I have been watching the hon. member since he started his speech and he has been reading all of it, except for the interjection by. the Secretary of State. I refer you, sir, to citation 144 of Beauchesne, which states that the rule of this house prevents a member reading his speech because it may have been written by somebody else. I think if the rules are going to be applied, they should be applied to the hon. gentleman.


Some hon. Members:: Shame.


Thomas Clement (Tommy) Douglas: Mr. Chairman, if I may proceed-


Erik Nielsen: May I have a ruling on my point of order, Mr. Chairman?


John Whitney Pickersgill: Before Your Honour rules, may I say that I hope the usual courtesies that have normally been extended in this house will be extended to the hon. member for Burnaby-Coquitlam?


Thomas Clement (Tommy) Douglas: I was trying to save the time of the house by keeping fairly close to notes rather than making a rambling speech. I am therefore confining myself fairly close to my manuscript. I shall be glad to throw it away and take all the time necessary, if that is what the committee wants done.
I simply say if Canada is to go forward she must go forward as one people; with two languages and two cultures and proud of our diversity, but united as to our ideals and objectives. Nothing that I have said about unity in economic affairs precludes the fullest development of bilingualism and bicultural-ism. Before I go to the point which was raised by the Secretary of State, in the view of the New Democratic party Canada is composed of people from many lands. Our constitution recognizes two official languages and two cultures stemming from the two nations which came together to form the partnership of confederation.
If those of us who are English speaking Canadians have not always lived up to the spirit of that partnership, then we must reexamine our actions and mend our ways. I think we are doing that today more seriously than we have ever done it since 1867. I want to make it perfectly clear to the Secretary of State that talking about an economic entity is one thing and talking about binationalism and biculturalism is a totally different thing. We are talking in one field in economic terms and in the other about social relationships and cultural areas of living.


John Whitney Pickersgill: That is something I understand.


Stanley Howard Knowles: That is very kind of you.


Thomas Clement (Tommy) Douglas: I am not suggesting, Mr. Chairman, that the provinces do not need more revenues to carry out the responsibilities allocated to them under the British North America Act. On the contrary, I believe the provincial governments have an unanswerable case for a larger share of the direct taxes, particularly income taxes and corporation taxes. At the present time the provinces are getting about one fifth of the revenue from the three shared tax fields. It seems to me that the request for 25 per cent of the income tax revenue and 25 per cent of the corporation tax revenue is reasonable. Most of the provinces will undoubtedly spend this money, if they get it, on education, because their municipalities simply cannot hope to meet the increasing costs of education as they are at the present time and as they are anticipated over the next ten years.
However, Mr. Chairman, it is a totally different thing to talk about a larger portion of the shared tax fields for the provinces and to talk, as some have done, about the federal government being asked to vacate the present tax field entirely and leave each of the provinces to fend for itself. Some provinces might do well, although even that is doubtful in time of economic recession. There are provinces which would suffer very greatly. We must keep in mind the difference in tax potential as it obtains among the respective provinces. It is estimated today that to raise $10 per capita of its population, the province of Ontario would require to increase the income tax rate by 6 per cent; Newfoundland would require an increase of 23 per cent and the province of Prince Edward Island an increase of 31 per cent.
Now, surely one of the functions of the federal government is to equalize opportunities among the various regions of Canada so as to guarantee a minimum standard of health, welfare and educational services for every Canadian irrespective of geographical location. It should be remembered, Mr. Chairman, that the money collected in taxes in any one province was not necessarily earned in that province. We have banks, insurance companies, railways and large corporations like oil companies which make their money all across Canada but pay their taxes in the province where their head office is located. Much of the income on which they pay this tax was earned in various parts of Canada. Those parts of Canada where the wealth was actually produced are entitled to some share of that revenue.
The same thing is true with regard to succession duties. When succession duties are levied, they are levied in the province where the deceased passed away and the will is

probated. However, the deceased may have moved there only recently after his retirement, and the estate on which the heirs are paying succession duty may have been earned in many parts of Canada or may have been earned entirely in some other province of Canada.
The whole basis of confederation was the assumption by Canada of a responsibility for the less industrialized areas. The maritimes came into confederation with the understanding that their particular situation would be recognized and appreciated. For nearly 100 years it has been national policy in this country to develop the great central industrial heartland of Canada by means of subventions, freight subsidies and a whole variety of programs. I am not complaining about that at this particular time. I am simply saying that if national policies have made some parts of Canada more prosperous than others, then it is the function and responsibility of the federal government to redistribute some of the tax revenues collected in the wealthier provinces, much of which may have been earned in other parts of this country.
Now, Mr. Chairman, I do not think anyone in this house needs to argue for the principle of equalization. It is a principle that has been accepted by all parties quite fully, and the present government has made its position clear in a great many cases. I could give many illustrations, but let me refer to my favourite book and my favourite author, "The Liberal Party" by J. W. Pickersgill. On page 133 of this book which sets forth the Liberal program it says:
We do believe, however-
I am sorry; I have got the wrong page.


An hon. Member:: And the wrong book.


Thomas Clement (Tommy) Douglas: I have got the right book. The page is 125, and it says:
At the national Liberal convention of 1958 the party pledged ifself to alter the basis of equalization payments so that revenues of all provinces from income taxes and succession duties would be brought up to the level of the province having the highest per capita revenue. This principle was reaffirmed at the national Liberal rally in 1961.
I will not take the time of the committee to quote the statements of the Prime Minister as they have appeared in Hansard from time to time. I need only refer to his opening statement at the federal-provincial conference this week when he said, according to the text which was circulated:
It is well known that my colleagues and I prefer to see equalization paid up to the level not of the average of all the provinces, as parliament enacted in 1961, but up to the level of the highest.
In my opinion the government was perfectly sound in suggesting its original
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proposal that the best equalization formula would have been to equalize the three tax fields, income tax, corporation tax and succession duties, up to the per capita level of the highest province. That would .be a fair system of equalization, and what I hope the government will explain is why it has now departed from a principle which it enunciated in the House of Commons, which the Secretary of State enunciated in his book "The Liberal Party", which it passed at its convention, and which the Prime Minister himself referred to the other day in his opening speech to the conference. Why has the government departed from this and introduced a formula which detracts from equalization?
First of all it suggests equalizing income and corporation taxes up to the level of the average of the two highest provinces. Second it introduces a factor of income from natural resources. Why natural resources? If we are taking into consideration the other tax revenue sources of the provinces, why not include all other sources of taxation? But more serious still is the fact that the government has introduced another factor into the formula. The government is now going to raise the share which the provinces can get of the succession duties from 50 per cent to 75 per cent, but this additional revenue is not to be included when computing the equalizing payments. I hope the government will tell us why it has discarded the formula to which it was pledged, a formula which was reasonable, fair and just, and has instead adopted a formula which is a departure from the principle of equalization. It is not because of the cost involved. To have raised the equalization payments for the three tax fields to that of the wealthiest province on a per capita basis would have cost the federal government about $90 million. The formula which is now being placed before the provinces by the Prime Minister will cost about $87.5 million. Therefore it is not a matter of cost.
I say that this new formula is a rigged formula. There is some reason that the government has decided to load the dice, and I want to know who twisted the government's arm. I want to know who it is we are trying to curry favour with, at the expense of the whole principle of equalization. Let me just put on the record the additional revenues which will come to the provinces as a result of this new equalization formula. I will give them in round figures, and I believe they are reasonably accurate. They are Newfoundland $3,282,000; Prince Edward Island $599,000; Nova Scotia $5,742,000; New Brunswick $5,558,000; Quebec $42,716,000;

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Ontario $14,416,000; Manitoba $7,023,000; Saskatchewan $2,469,000; Alberta $1,722,000; British Columbia $3,921,000.
When this is put on a per capita basis, this is the additional revenue which the provinces will get under this new formula: Newfoundland $6.83; Prince Edward Island $5.60; Nova Scotia $7.60; New Brunswick $9.05; Quebec $7.81; Ontario $2.24; Manitoba $7.39; Saskatchewan $2.65; Alberta $1.23; British Columbia $2.31.
I say, as one who has long advocated an equalization formula that will help to offset the disadvantages under which some provinces labour, I have always been pleased at the position which the government took with reference to equalization. I was delighted when I read the Prime Minister's statement of last Tuesday when he said:
It is well known that my colleagues and I prefer to see equalization paid up to the level not of the average of all the provinces, as parliament enacted in 1961, but up to the level of the highest.
I cannot help but wonder what has happened between last Tuesday and today. The government, very apparently, has tossed over in part the principle of equalization and has worked out a formula which I can only describe as based on expediency, in order to secure the support of certain parts of this country.


Eric Alfred Winkler: Would the hon. member permit a question?


Thomas Clement (Tommy) Douglas: Yes.


Eric Alfred Winkler: Would he agree that the new formula could be that it is more blessed to give than to receive if the government comes out with the most votes?


Thomas Clement (Tommy) Douglas: I am not trying to read the government's mind. I am simply endeavouring to point out that a very solemn pledge made to the people of Canada has been broken, and that the government has now set its feet along the path away from the principle of equalization.
I have read the debates which took place in the house following the tax sharing arrangements of 1961, in which the previous administration was criticized by the Liberals because it was alleged it had departed in some measure from the principle of equalization. It was at that time, and I can give hon. members the date-June 2, 1958-that the Prime Minister, then the leader of the opposition, stated in clear and categorical terms what the Liberal party would do in establishing a fair and just equalization formula. I am simply rising for the purpose of saying that this equalization formula has been discarded and a new one based on expediency is apparently going to take its place.

Having made these remarks about the needs of the provincial governments for increased revenue; having given the unqualified support of this party to equalization, and a fair and just principle of equalization, I say the federal government must have, in our opinion, the fiscal capacity to meet any economic fluctuations which this country may experience. The ability to increase taxes in times of inflation and to reduce them in times of deflation in order to stimulate the economy, is a power which the federal government must have. The federal government must have the power to direct investment, to direct both private and social capital into underdeveloped areas and into surplus labour areas at any time the need arises. It must have the capacity to direct resource development capital into those areas that have not been able to attract private capital for that purpose.
To this end we in this party support the idea of the federal government retaining its fiscal powers. We reject any suggestion that the federal government should be asked to vacate the direct tax field. We also-


Lucien Lamoureux: I hesitate to interrupt the hon. member but I must inform him that his time has expired.


John Whitney Pickersgill: Mr. Chairman, I have the feeling that the hon. gentleman has almost completed his remarks. Perhaps the committee would agree to the hon. gentleman finishing what he has to say.


Thomas Clement (Tommy) Douglas: I think I can complete my remarks in about three minutes, Mr. Chairman, if I may have the indulgence of the committee.


Lucien Lamoureux: Does the committee agree to the hon. member continuing?


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: The last point I wish to make is this. I believe the federal government must also have the legislative authority to provide certain social security measures where uniformity and portability are necessary. I have in mind particularly such things as unemployment insurance, which we already have, the Canada pension plan and other programs which will undoubtedly arise in the future. A great many plans can and should be worked out in conjunction with the provinces. I agree with the provinces which asked the government at this week's conference to move steadily from conditional grants to unconditional grants. I think there is need for more flexibility in these grants, and that grants should be given for health, for welfare, for technical education, and we should allow the provinces to decide the best way in which these grants can be spent within their particular areas of

responsibility. But after we have worked out all the programs we can on a joint federal-provincial basis, there will always be a need for Canada-wide programs. In these days of mobility of labour there are programs which need to be country-wide in scope. I hope the federal government will retain its right to carry on such programs in the interests of all the people of Canada.
There are many other things which one would like to say on this matter of federal-provincial relations, particularly with reference to the announcement of the offer which the government has made to the provinces under the tax sharing arrangements. I hope the Prime Minister will arrange for a debate at an early date so he can explain to the house the offer he has made to the provinces, why it has been made, and why the government has departed from the original equalization formula which it espoused. I think such a debate would be useful. I hope it will be held soon. I express the hope of this party that out of the federal-provincial conference and the meetings which will subsequently follow, this country will go forward as a united and unified Canada.


Mr. Munro:: Mr. Chairman, I wonder
whether I could ask the hon. member a question.


Lucien Lamoureux: Order. The hon. member's time had expired. The hon. member for Hamilton East cannot ask a question unless there is the unanimous consent of the committee. Does the committee give unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Lucien Lamoureux: I hear dissenting voices; therefore I recognize the hon. member for Quebec-Montmorency.


Mr. Marcoux:: Mr. Chairman, without taking too much time, I should like to make a few comments following the speech made by the hon. member for Burnaby-Coquitlam (Mr. Douglas).
In spite of what he said, I do not think everybody in Canada has the same conception of Canadian federalism and also of the authority and autonomy of the provinces.
Personally, I believe that confederation resulted from an agreement reached between different provinces to achieve a common goal. It was not a question of losing an identity which already existed, but simply of working together to succeed in doing certain things which the provinces could not have accomplished individually.
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Obviously, the hon. member for Burnaby-Coquitlam is angry at himself for preaching centralization but, while refusing to accept it, he is advocating measures of an increasingly centralizing nature.
While almost all the component parts of confederation are now in favour of decentralization, because the common good to which we attach the greatest importance is the one closest to us, the hon. member for Burnaby-Coquitlam would like the federal government to take much more vigorous stands in many fields which, normally, should be none of its concern.
As an example, he referred to the European countries which set up the European economic community. The example is a good one in a way, as long as it is realized that the European economic community will be strong to the extent that each of its members is strong. That is why, when France, England or Germany are economically strengthened, it gives the whole community much greater strength.
By the same token, when the hon. member claims that the tax capacity should be adequate to enable the federal government to carry out any activity it would like to carry out, I say to him that the capacity to pay of the whole country can be no greater than the capacity to pay of each of the parts which make up that country. That is why Social Credit always criticized our present economic system under which no matter where the taxation system is placed, no matter the priority given to the central government, the provincial government or the municipal government, we will always be facing the same problem which is to pay interests and carry a debt that we cannot carry any more than the federal government itself.
We know for instance that last year, the national debt went up by some $760 million and that at the same time, the federal government had to pay close to $800 million in interests on the debt.
We wonder where is the deficit and why the government cannot make progress in the economic field. Well, one does not have to do much searching, because the figures released in the public accounts of Canada are so clear and so obvious that they enable us to readily realize where the problem lies and why the government cannot meet its obligations. It is not because the provinces want too much, not because the municipalities want too much, not because the federal government wants too much, but rather because our present economic system is wrong and neither planning nor centralization nor any of the other proposals put forward by the hon. member could settle that.
That is a typically and purely economic problem. Of course, to that economic problem,

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a linguistic problem and a cultural problem have been added, which make matters worse and harden positions on both sides.
When the provinces got together to create what was called confederation, they did so in order to help each other in fields where it was better to stand united than divided. However, we find ourselves today in a situation against which the province of Quebec was no doubt the first to react. For political reasons of course, in a very large measure, following the people's awakening, the province of Quebec found out that it had to be the master of its own future, while remaining part of an association of provinces, but that if it could not do what it was meant to do, it had to ask the federal government to do it. Various provinces decided afterwards to adopt more or less the same stand as the province of Quebec.
To my mind, Mr. Chairman, a strong confederation means strong provinces, not weak provinces which weaken themselves in order to strengthen the central government.
The solution does not lie there. The provinces should be allowed to be strong, to meet their obligations in the fields which are theirs according to the constitution, fields which are dear to them, because they were granted to them by the constitution and, because at the time of their union, they insisted that some matters fall under the jurisdiction of the provinces, while others could come under that of the central government.
Of course, there has been talk of an equalization system. There again, since what took place was the free founding of a free association of free provinces, I think the provinces should find among themselves a solution to the equalization problem.
I do not think that it belongs to the federal government to impose an equalization system. The first system was bad; if the system we have now or which was suggested recently is based on political expediency, as alleged by the hon. member for Burnaby-Coquitlam, that does not mean that everything must always be subject to the decision of the federal government. Let the provinces establish between themselves an adequate equalization system in order to bring about a balanced economy in this country.
One must not be selfish, want everything for oneself and give nothing to others. We must work in very close co-operation. If the contacts between the various provinces are more and more frequent, I am convinced that co-operation will develop accordingly. What people want is not only to be able to carry out in their own areas the functions which are properly theirs, but also that the other provinces be permitted to do the same.

Mention was made a moment ago of the maritime provinces. I visited these provinces many times. They are rather handicapped economically, and this because of political discrimination, because unfortunately, we have always been led by partisan considerations since the very first years of confederation.
When the government took decisions, it was in terms of the votes it could get in order to stay in power and rule.
That is why certain areas known as being easy to rally over to the government have always been politically ignored.
The other day, when we heard the government say they had decided to confirm the decision taken by T.C.A. with respect to the DC-9 again we saw there a decision that was probably taken because it was advisable from the political standpoint. It was also the same thing when the hon. members from Winnipeg-there are several of them-insisted that the maintenance base in Winnipeg should remain there.
Well, in my opinion, that was granted, as I say, for political purposes, because the province of Manitoba was not to be hurt since she was needed, and also because it had been realized that after the settlement of any situation, people in the province of Quebec are always good fellows and eventually come around.
Mr. Chairman, I must say that if in several parts of Canada the Canadair problem was associated with the Caravelle aircraft, it was not a matter of language nor a racial issue, but a matter of unemployment which is more serious in the province of Quebec than elsewhere, while-by a strange coincidence- when we talk of poor provinces, other provinces than that one are mentioned. In short, that was the point at issue much more than anything else.
I can assure you that if the DC-9 had been built in Montreal at the same conditions as the Caravelle would have been, the people in the province of Quebec would have favoured the DC-9, because the building of that aircraft would have helped to stem unemployment in Quebec.
Once more, it is not at all a matter of security or efficiency of that aircraft.
Naturally, like the rest of Canada, the province of Quebec will readily acknowledge the superiority of the other aircraft if it proves to be better as far as security, efficiency and economy are concerned. The people of Quebec are not more stupid than their fellow citizens.
However, no justification has been given to anyone. No one has agreed to say why the experts chose the DC-9 instead of another aircraft. That is why no one can state any

definite reason because both T.C.A. and the government have refused to give any explanation. It is well known that the parliamentary committee which considers the budgets and financial statements of the C.N.R. and T.C.A. has never been able to secure from the respective presidents of those two corporations any explanation of the reasons which motivated previous decisions.
In fact, I challenge the committee to try to draw from the president of Trans-Canada Air Lines the true reasons why he accepted the DC-9 rather than the Caravelle aircraft.
Now I am telling you, that if technical, economic and security reasons favour the DC-9 rather than the other aircraft, the Quebecers will be the first to accept this decision, if the reasons are obvious, the difference between the two aircraft is appreciable, and if it is, moreover, proved that Trans-Canada Air Lines arrived at the best possible decision.
That, Mr. Chairman, was simply to explain what I was saying a few moments ago. If confederation has reached this point today, the respective governments, provincial as well as federal must take the blame. The federal government is not the only one to deserve blame, nor are the provincial governments; they all made the same mistake of playing at politics; and whereas they all were elected to represent the people's interests, they hastened, as soon as they were put in power, to safeguard their own political and the financial interests.
As long as the problem of the economic situation is not solved, I fully believe that it is mere illusion to think that we can settle the tax problem.
When there is a question of moving the taxation basis, of dividing the federal government pie, in order to increase or decrease the quota of each province, we have a good time and give our voters and the provincial premiers a good time because we are giving them some hope. But, the problem indeed remains; our liabilities will always by far exceed our means, and we will have to pay interests exceeding our income. Whether there are 10 isolated units or a single one it will still be "You-know-who", who will have to pay for the breakage, and who will indeed have to tighten his belt. Whether it is for the federal government or the provincial or municipal governments, the one to suffer will be the worker, the small wage earner.
As usual, those who suffer hardship in depressions, as a result of our governments having failed to take this problem seriously, are those same small wage earners, who become the leaven of revolutions, which brings about conditions like those we have seen in colonial countries in the last few years, and which may also develop here. For
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we are now in a colonial country; we are "colonized" by high finance, by people without soul, who have forgotten every Christian principle. It will therefore be absolutely impossible to find a solution for the present situation, if the problem remains unchanged.
I will stop here, Mr. Chairman. I merely wanted to express my opinion and, perhaps, that of my colleagues on confederation. Indeed, confederation will be strong inasmuch as each of its components is strong and inasmuch as it can play the role which was entrusted to it by the provinces when they endorsed the principles set out in the British North America Act. When the provinces have obtained satisfaction, they will renew with the federal government their acceptance of their role. Then will we have co-operation between the provinces and especially between the two great races which form Canada. Then, in my opinion, we will be justified to say that we have reduced tension in our country as we wish to reduce it in the world.


Mr. Caoueite:: Mr. Chairman, at a time when federal-provincial relations on fiscal matters are being discussed in Ottawa, we hear statements in the house about the fiscal policy and the existence of two cultures, of two languages which make up the very basis of our country.
We also heard about centralization, and when the hon. member for Burnaby-Coquit-lam (Mr. Douglas) suggests, for instance, that the federal government should not withdraw from the taxation field with regard to health, he should go further and include the fields of social security, education, highways, in short, all other fields in which the provinces are playing a prominent part at present.
Mr. Chairman, it is not through centralization that we shall attain the highest standard of emancipation, either cultural, personal or individual, in Canada.
The federal government controls fields of taxation that properly belong to provincial governments. In the last few days, that is, since Tuesday, all provincial premiers are in Ottawa conferring with representatives of the federal government. Discussions are being held on fiscal matters, on tax sharing, on the distribution of money that is collected from Canadian taxpayers. Then, when provincial premiers return to their respective provinces, they will still be faced with contributions to be made to municipalities or school boards. All this constitutes an enormous problem, almost a deadlock, because no attempt is being made to strike at the root of the evil.
The governments merely talk about tax matters and the other day, more exactly yesterday, the Quebec delegation suggested that the federal government should give the

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provinces a greater share in the development of the Canadian monetary policy.
It was, in my opinion, an excellent suggestion, because it is my contention that fiscal matters especially proceed from a well-established system called the banking system, the Canadian monetary system. There were no fiscal matters before the introduction of the monetary system. Now, all our present difficulties are due to monetary difficulties from which stem all the financial difficulties with which Canada is faced.
Mr. Chairman, on October 31 last, I put in the order paper the following question:
Since 1942, has the Minister of Finance received written notice from the government of the province of Quebec, pursuant to section 23(5) of the agreement signed by both governments on the vacating of certain fields of taxation during the war with a view to denouncing the agreement and, if so, what steps have been taken in this respect, and what agreements are now in force?
And as reported on page 5148 of Hansard of November 27, 1963, the parliamentary secretary to the Minister of Finance (Mr. Benson), replied as follows:
No. Under section 23(1) of the wartime tax agreement, it was provided that the agreement would terminate on the last day of the fiscal year of the province ending nearest to the thirty first day of December in the first calendar year which began after the date of cessation of hostilities. As order in council P.C. 7409 dated 21st December 1945 fixed the 2nd September 1945 as the date of the cessation of hostilities, the wartime tax agreement automatically ceased on March 31, 1947, and Quebec was free to resume the imposition of a provincial tax on individual and corporation incomes. As Quebec did not enter into subsequent tax rental agreements, that province has retained its freedom to tax individual and corporation incomes.
Now, I contend that the federal government subsequently, lied shamelessly to the Canadian provinces when it said that Quebec could not resort to direct taxation and to personal income tax since Ottawa already occupied this taxation field. Quebec lies or Ottawa lies, when we are told that the province of Quebec was free after March 31, 1947, to recover her whole rights, in taking away from the federal government this field of taxation, since, at that time, it had not used its rights to resort to personal income tax. As the province of Quebec concluded no agreement in the taxation field, it had kept its freedom to resort to personal income tax and corporation income tax.
On several occasions, we heard statements to the effect that Quebec, as the other provinces, is entirely free to levy a personal income tax or a corporation income tax. However, the federal government never agreed to quit that taxation field, so that we had, in Quebec, double taxation or double income tax. In fact, several other provinces also had to resort to this double taxation.

Now, it is not at all interesting for a province to resort to such double taxation, which is not very popular among the Canadian taxpayers, no matter in which province they happen to live.
Mr. Chairman, this answer from the Department of Finance establishes clearly that the provinces are free to recover their rights, which means that the federal government is ready to quit those taxation fields. That is true, but nevertheless I doubt the truth of that statement. For is it not a fact that the province of Quebec has had to impose double taxation? And now, once again we are faced with this taxation problem.
The federal government and the provinces set equalization payments per capita in Canada. As a matter of fact, in certain areas of this country, the payment per capita will amount to $7, in another, $1.31, in still another, $3 or $5, and so on and so forth.
Equalization payments are established per capita, in somewhat the same way domestic animals are bought or sold on both domestic or foreign markets.
Mr. Chairman, I said a moment ago and I will say it again; the very foundation of our taxation system is a defective monetary system under which this country has been and is still stagnating, saddled as it is with exorbitant interests that it is incapable of paying, not only at the national level but also at the provincial, municipal and school levels.
I base my case upon solid facts and not upon imaginary figures which nobody could prove. I refer to the Canada Year Book for 1962, and more particularly to page 1087, where we find the following information on currency and banking:
The Bank of Canada-
That very bank about which we talk so much, not only in the house but also-and even more so-outside of it, to explain to the Canadian people the part that is played in our monetary system by the Bank of Canada.
The Bank of Canada is Canada's central bank. It was incorporated under the Bank of Canada Act in 1934 and commenced operations on March 11, 1935. The Act of Parliament which established the central bank charged it with the responsibility-
Note this, Mr. Chairman:
-the responsibility for regulating "credit and currency in the best interests of the economic life of the nation", and conferred on it certain specific powers for discharging this responsibility. Through the exercise of these powers, the Bank of Canada determines broadly the combined total of the basic forms of Canadian money held by the community -currency outside banks plus deposit balances in chartered bank accounts.
By virtue of the provisions of the Bank of Canada Act, which enable the central bank to increase or decrease the total amount of cash reserves available to the chartered banks as a

group, the Bank of Canada is able to determine broadly the over-all level of the total assets and deposit liabilities of the group, and hence of the combined total of currency and bank deposits. The Bank Act requires that each chartered bank maintain a minimum amount of cash reserves in the form of deposits at the Bank of Canada and holdings of Bank of Canada notes. This minimum requirement is 8 per cent of the bank's total Canadian dollar deposit liabilities on a monthly average basis.
That means that under the Bank of Canada Act, a chartered bank having a deposit equivalent to 8 per cent of its assets, of its deposit liabilities in the Bank of Canada, would have the right to loan $92 for every $8 deposited with the Bank of Canada.
I quote again:
The ability of the chartered banks as a group to expand their total assets and deposit liabilities therefore depends on the level of total cash reserves. An increase in cash reserves will encourage the banks to expand their total assets (which consist chiefly of loans and marketable securities) with a concomitant increase in deposit liabilities; a decrease in cash reserves will bring about a decline in their total assets and deposit liabilities as they seek to restore their cash reserve ratios.
Mr. Chairman, each time the Bank of Canada demands that the chartered banks bring their cash reserve ratios to a 10 per cent level, credit restrictions immediately spring up. On the other hand, when the Bank of Canada allows the chartered banks to have reserves of 8 per cent only, credit tends to expand.
Further:
The chief method by which the Bank of Canada can affect the level of cash reserves of the chartered banks, and through them the total of chartered bank deposits, is by purchases and sales of government securities. Payment by the central bank for the securities it purchases in the market adds to the cash reserves of the chartered banks as a group and puts them in a position to expand their assets and deposit liabilities.
Mr. Chairman, as soon as the Bank of Canada buys securities, the assets of chartered banks increase, as they multiply by 12J the reserve amount created by a purchase of securities by the Bank of Canada.
I continue my quotation:
Conversely, payment to the central bank for securities it sells causes a reduction in reserves of the chartered banks and makes it necessary for them to reduce their assets and deposit liabilities.
Mr. Chairman, going on to page 1089:
The bank may buy and sell securities issued or guaranteed by Canada or any province-
Note that Mr. Chairman, "or any province".
-short term securities issued by Britain treasury bills or other obligations of the United States, and certain classes of short term commercial paper.
Mr. Chairman, under the Bank of Canada Act, the central bank may buy and sell securities issued or guaranteed by Canada or any
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province in the country. And I think that the paradox is this: Why oblige the provinces to go and borrow abroad? Why oblige the provinces to go to other institutions than the Bank of Canada when the legislation stipulates that the provinces can issue securities guaranteed by their resources?
That is the part laid down for the Bank of Canada, the role for which it was established in 1934 and for which it began its operations in 1935.
Besides, the Bank of Canada may accept deposits that do not bear interest from the government of Canada or from the government of any province. That, I think, is another paradox.
That is the paradox facing us.
And I continue:
The bank may accept deposits that do not bear interest from the government of Canada, the government of any province, any chartered bank or any bank to which the Quebec Savings Bank Act applies.
But those deposits do not bear interest. How is it that the deposits with the Bank of Canada do not bear interest, while it has to charge interest to the central government or to the provincial governments for the loans they need to administer their business?
I continue:
The bank does not accept deposits from individuals and does not compete with the chartered banks in commercial banking fields.
Mr. Chairman, the bank does not compete with the chartered banks in commercial banking fields. It exists only to help the chartered banks; its very reason for being is to control credit and currency in the best interests of the economic life of the nation.
Well, there is no rule to order credit restrictions at a time when the number of unemployed is going up in Canada, at a time when instability sets in and becomes the nightmare of the Canadian nation.
Why does not the Bank of Canada, through its administrators and its governor, take measures to maintain a progressive and prosperous economic life for the whole Canadian nation?
Again, according to the Canada Year Book:
The Bank of Canada may vary the minimum cash reserve requirement of the chartered banks between 8 per cent and 12 per cent of their Canadian dollar deposit liabilities_
When this legislation became effective on July 1, 1954, the requirement was 8 per cent and it has since remained at that level. (Prior to July 1, 1954, each chartered bank was required to maintain at all times cash reserves equal to not less than 5 per cent of its Canadian dollar deposit liabilities; in practice, the chartered banks as a group normally worked to a ratio of about 10 per cent.)
Mr. Chairman, during the years 1956-57, did we not see restrictions imposed on the Canadian people while chartered banks had

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to maintain a reserve of only 5 per cent of their Canadian dollar deposit liabilities?
Another point: One has fed the Canadian people the gold myth, according to which Canadian paper money was based upon gold. Some Liberal members running for parliament during the last election used to say to the provincial electors: "If our dollar is to have any value in Canada, it is necessary and compulsory that it be backed by a gold reserve.
Now on page 1089 in the Canada Year Book, I find the following:
Section 23 of the Bank of Canada Act provides that the bank shall maintain a reserve of gold equal to not less than 25 per cent of its outstanding notes and deposit liabilities.
Such are the terms of section 23 of the act.
This requirement was suspended in 1940 when, under the terms of the exchange fund order, the bank's gold holdings were transferred to the exchange fund account to form part of Canada's official gold and United States dollar reserves. The Currency, Mint and Exchange Fund Act passed in 1952 provides that, notwithstanding section 23 of the Bank of Canada Act, the Bank of Canada is not required to maintain a minimum or fixed ratio of gold or foreign exchange to its liabilities unless the governor in council prescribes otherwise.
Mr. Chairman, there is not a single ounce of gold behind our Canadian paper money. Nevertheless, there are still people to maintain the opposite in Canada.
We have proved and are still proving at present, by referring to the Canada Year Book, that the monetary and banking system is responsible for the financial and taxation difficulties we have to cope with.
The problem which faces the provinces, namely their being at grips with the federal government from which they are demanding a better distribution of taxes collected by the central government, is not the only problem that we know of. In the province of Quebec, which we know best, we have school boards on the verge of bankruptcy at this moment; the provincial government has to direct them to increase their school taxes, otherwise they will have to be placed under a trusteeship by the said government; thus those school boards are compelled to increase their taxes or else be deprived of any provincial subsidy for the construction of their schools or the remuneration of their school teachers.
Mr. Chairman, this is the outcome of taxation policies in the provincial education field. In the municipal field, the same problems arise and here we are in Ottawa grappling with the same difficulties on a higher level. While the federal government only can legislate on monetary matters, they refuse to face up to their responsibilities and to discharge their duties.
[Mr. Caouette.l
What can they do at this time to get the general economy of Canada going again? All the federal government has to do is to instruct the Bank of Canada-if an amendment to the legislation is necessary, let us introduce one-to make financially possible what is physically realizable and morally good in the whole of Canada. Then the Bank of Canada could help the provinces, the municipalities, the school boards and the public administrations of Canada.
There is no other way out. Even if we listen to the hon. leader of the socialist party telling to the house that we need greater centralization, it is not with centralization that we will reach the goal at which we are aiming, "security and freedom for all Canadian citizens", but through decentralization and the respect which we owe to every Canadian citizen, every Canadian taxpayer.
Let us take for instance those who control money and credit. That system has been condemned thirty two years ago by His Holiness Pope Pius XI, who said, in 1931, what follows:
Those who control money and credit also control our lives and no one can breathe without their permission.
That was true ten or 15 years ago and it remains true today. No one can breathe without the approval of those who control money and credit.
According to the Canada Year Book, the Bank of Canada has something to do with the control of money. As Canadian legislators, we must direct the Bank of Canada to play its role to the full extent. It must not be satisfied with playing only half a role by imposing a strait-jacket on the Canadian people, but rather it must free human beings from bondage. That is what we all want, no matter where we sit in this house.
We have to admit that the economy will not really reach its objectives until it provides each and every one with his share of the wealth produced by nature and industry, and that share should be large enough to provide every one with a decent living.
It is for that decent living that Social Credit members of this house and Social Crediters throughout Canada have been working so strenuously for nearly 20 years. What is important to them is not to bring down a government and replace it with another, but to get results for the people of Canada. Let the Liberal government now in office give us the results we want and we shall be the first to vote for it. Results are the things that matter to us.
Mr. Chairman, there will be a debate next week on the results of the federal-provincial conference. Such conferences have been held for the past ten years; there have been conferences between provincial premiers, who

have been replaced following elections, and federal governments, which have been changed following general elections. At one time, the premier of Quebec was the Hon. Mr. Duplessis, today it is the Hon. J. Lesage. At one time, in Manitoba, so-and-so was premier, today, it is Mr. Roblin.
Thus all the provincial premiers meet with the Prime Minister and the federal government; they discuss taxation, but none dares to deal with the monetary question, the banking question, the financial question, the very root of all the economic chaos which we have been going through for too many years.
Mr. Chairman, we will pass the interim supply, because the money has already been spent, but I wanted to inform parliament of what we stand for. It is not a matter with which to play politics; it is not a game for petty politicians; of little politicians; we demand results, whether from one government or another.
There are two provincial governments which abide by the Social Credit doctrine: the government of British Columbia and the government of Alberta. We wonder why those two governments do not request the immediate use of the Bank of Canada to start the general economy of this country moving again. The Social Credit doctrine is very clear; Major Douglas was very clear in his manifesto of 1918, and principles set forth by Mr. Douglas in 1918 are still true today; it is due to the changed economic conditions in which we live.
Today, there is more automation than in 1918 and in 1920, and we have moreover to face replacing man by machines.
We now have to determine whether machines are to penalize men or to serve them. If we believe in machines for punishing people, Mr. Chairman, I think we should pursue the course charted by the Conservatives and the Liberals.
If we believe that machines should serve the human being then we should consider the problem from another angle, looking to the controllers of the nation's economic blood stream, and when we discover deficiencies or needs, the most elementary honesty will probably induce this government to put the axe to the present monetary system which is causing this country's present distress.
We want security and freedom in Canada. We are in no way asking for the impossible, because we know Canada is one of the richest countries in the world. If we realize it, let us try and show all taxpayers and voters that we are aware of our responsibilities as their representatives in the House of Commons, where laws are enacted, and where they have to be worked out with due consideration for the needs of the human beings
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whose interests we should watch. Indeed, people are not made for the law, but in Canada the law must be made to serve people.
That is what we want the government to do. That is the aim towards which we work, meaning to obtain as much as we can, and we shall not desist, as long as we have not succeeded in providing for the welfare of Canadian citizens.


Mr. Aiken:: Mr. Chairman, I wish to speak on another subject. The interim supply which is before us gives me the opportunity to set out very briefly an answer to an allegation that has been raised outside the house, and occasionally inside the house.
A couple of weeks ago a statement was made outside the house that the opposition was impeding the government by endless votes of confidence in the house. There were other statements made along with it, but this one bothered me because I felt it was not true. When it was made I raised the question briefly with the Prime Minister, and asked him if he would straighten out Mr. Keith Davey on who actually was calling all the confidence votes and supply motions. Naturally at that particular moment it was not a subject for debate, but now I do have a few minutes in which to raise the matter.
I have made a study of the proceedings in the house since October 1, on which date the first vote of the fall session was taken. I find that during the period from then until today -and certainly not counting today-there have been a total of 26 recorded votes in the house. These have been on various matters, and I want to break them down because I think it is important for us to know whether or not the opposition is conducting a blockade of the business of the government by calling endless votes of confidence.
There were 26 recorded votes during that period of time. Nine of these votes-


The Deputy Chairman:: Order. I wonder if the hon. member is now dealing with the resolution before us, or whether he is not referring to votes which have already taken place in the house during this session.


Gordon Harvey Aiken: I am speaking on interim supply, and I thought we were open to discuss any subject.


John Whitney Pickersgill: May I say a word on the point raised by the chairman, because the same thought was running through my mind. I think it is generally understood when we are in committee of supply any grievances can be raised against the government. Now, I am trying to say this in a non-contentious way, because I appreciate the hon. gentleman's

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feeling about this matter, but he is not expressing any grievance against the government.
So far as I am concerned no one in the government has made any such allegation. Certainly I have not, and I want to make that very clear. I have not made any such allegation at any time about the opposition. I think there has been a reasonable measure of co-operation, but I question whether it is proper to raise this now. I could look up Beauchesne, but I do not imagine we want to have a discussion on points like this. However, I question whether it is proper, when we are in committee of supply, to go over matters that have already been settled by the house in the same session, and to open up any debate that has already been concluded.
I think there is that limitation; but if the hon. gentleman has some very brief statement he wished to make, notwithstanding this fact, I would not want to stand on ceremony. I would sincerely hope however that not very much time would be taken up with it, because the hon. gentleman, if he extended his remarks, would be doing the very opposite of what he is seeking to do. It is very important to the government and to the conduct of business that we get this supply, and get on with the other urgent matters we have to deal with, if we are to finish the session before Christmas.


Gordon Harvey Aiken: Mr. Chairman, I think I could have said what I was going to say while the Secretary of State was speaking. However, if he wants to expand slightly on what he said a moment ago, and admit the opposition has been responsible in its actions up to now, I will discontinue my remarks.


John Whitney Pickersgill: Perhaps the hon. gentleman will remember-and here perhaps I am breaking the rules myself by referring to the debate on redistribution the other day- that I am one of those who think there ought to be debate in parliament, and I do not regard debate as obstruction. I have not said and I have not thought that, taken by and large in this session of parliament, particularly since we met in September, there has been anything I would be inclined to describe as obstruction.


Stanley Howard Knowles: Send a copy of this Hansard to Keith Davey.


Gordon Harvey Aiken: If I would be permitted by the committee to make my point in a brief sentence, I would continue. I merely wanted to say that out of the 26 votes we have had, ten were in connection with supply motions brought on by the government, on which it is the duty of the opposition-


John Whitney Pickersgill: The right.


Gordon Harvey Aiken: -to move motions of nonconfidence; three votes were on bills which we felt were unsatisfactory; five related to the division in the Social Credit party; one was to adjourn the debate and was brought on by the Liberal government; four were on the Speaker's rulings, and three were on the Chairman's rulings. I would not consider these to be endless votes of non-confidence and instances of delay.


Some hon. Members:: Hear, hear.


Horace Andrew (Bud) Olson: Mr. Chairman, I wish to take only a few minutes of the time of the committee in order to air a grievance or a problem that I have. Quite frankly, I do not know where to go with it, except here. I wish to appeal a decision made by treasury board. I have made inquiries around parliament hill but I really have not found anyone yet who can tell me exactly what a member can do in a situation such as this, where treasury board has made a decision and one wants to appeal it.
This question concerns the raising of the rentals of the crown owned dwellings in the village of Ralston, Alberta. The Department of National Defence, which is indirectly involved in this matter, tell me it is not in their hands at all because there was an order, or a directive which came from treasury board that these rentals should be brought in line with some standard that prevails. I disagree with this standard. In any event, I cannot get any satisfactory answer from the Department of National Defence. The defence research board of the Department of National Defence claim that they are in the same position, that treasury board has issued this directive, or order, and they therefore have no power to rescind it or do anything about it.
This village is some 30 miles from a city. It is therefore that distance from doctors, dentists, markets and most other community services that are right at hand for dwellings inside a city. I think this is something that should be taken into consideration. I wish to put on the record the answer to a question asked about this matter. This answer is to be found in Hansard of June 12, at which time I asked:
What was the total cost of constructing the crown owned residences in the village of Ralston, Alberta?
The answer was "$1,694,789". The second part of that question was:
What is the total amount of rent collected on these residences?
The answer I received was "$10,769 per month". I wanted to know what was the total rent collected on these residences from the time they were built, to see whether the

government had recovered most of its capital investment through rental. But the government did not answer it in that way, so I had to do some calculating myself. I find that even at the old levels of rent, before the raise came along they were collecting $10,769 a month, as I said, which amounts to about $130,000 a year. I happen to know that many of these residences have been in place and have been earning rent for the government for 13 years or more. At this rental figure it would take almost exactly 13 years for the government to recover all its capital investment in them. Therefore the government had no justifiable reason whatever for increasing the rents effective August 1 this year. In some cases the increase in rental was as much as 94 per cent, all at once. If the government were to tell us how much they have collected in rentals over these years, I think we would see that almost all their investment has been recovered, and they are therefore making what might be termed an unconscionable profit on the rentals now being charged. In spite of this they have raised all the rents. As I said, in one case at least the increase was as much as 94 per cent.
The grievance I have is with treasury board. I appeal to them to rescind this order raising the rentals, because there is no apparent justification for it; and in any event the increase is too much. I also disagree, if that is the right word, with the method used to evaluate what the rentals should be. I am told they sent an inspector from Central Mortgage and Housing Corporation to assess these buildings and establish a fair rental for them, but he took the general area into consideration. Certainly, if they were in the city of Medicine Hat the rents these people are now charged following the raise would not be more than that being collected commercially, if I may call it that, for houses of the same size and with the same accommodation right in the city. But they are not in the city; they are 30 miles out. I believe that a low rent in this village could be considered as one of the legitimate fringe benefits to people living there who have to commute back and forth 30 miles to doctors, dentists, market facilities and most other community services.
That is all I wish to say on this matter, Mr. Chairman. This is a grievance I have had for the last three or four months, and I seem to run right up against a stone wall in trying to find in the government anyone who will even take this question back to treasury board and have them consider it.


Mr. Vincent:: Mr. Chairman, I take this opportunity to draw to the attention of
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the government certain points which, in my opinion, are of vital importance to our areas and eastern Canada.
I would like to draw the attention of the hon. members and of the representatives of the federal Department of Agriculture to very serious problems which I already raised many times during this session. I did say "the representatives of the federal Department of Agriculture"; these hon. members do not realize, it seems, that the onus lies upon them as representatives elected by the people to give to their department instructions which would help to settle the many problems facing farmers in eastern Canada, in my province and in the maritimes, as well as in the eastern part of Ontario.
The house will remember that on October 15 last I made a stand against the millions of dollars lost by our farmers and especially those in the dairy industry in the province of Quebec.
I regret that there are no members of the government from eastern Canada, no responsible ministers in this field now in the house. The Minister of Agriculture (Mr. Hays) is still absent today and I deplore the fact that the Minister without Portfolio and his parliamentary secretary are also absent.
I especially wish to call the attention of the government on the millions of dollars that farmers in my province and in eastern Canada lose now because the new government policy was put forward too early, was not considered carefully, with the result that at present, our farmers received much less money than last year. Indeed, it should be the reverse as the prices of dairy products are higher than they were last year.
I should like to emphasize another point-* and my comments will only take a short time -that is equally important to eastern Canada's agriculturists. I am referring to feed.
It seems to me that since last April, the government has had enough time to draft proper legislation. Besides, legislation had already been drafted by the previous government, which would have been favourable to eastern growers as well as to those in my province.
This question is a very important one. At the present time, the prices of feed are too high. The growers of my province and those of the east cannot make any profits. Therefore, it is the duty of the government to take adequate action as soon as possible.
As I mentioned earlier, I say again that, in my opinion, the Minister of Agriculture could easily draft legislation to authorize farmers, flour mills and co-operatives of eastern Canada to organize themselves into a purchasing board in order to buy the feed they need

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directly from the Canadian wheat board, so as to secure their supplies at favourable prices during a period of from eight to ten months.
\ should also like to call the attention of the government on the point made in their brief by the Cooperative federee and the united farmers of Canada, to the effect that the federal Minister of Agriculture should like the government to consider the matter and submit a report as soon as possible so that when we go back to our respective provinces and ridings, we may tell our farmers that we are looking after their problems.
My third point has to do with a question I put to the Minister of Agriculture last June. When I asked whether the government intended to appoint a vice president within the Farm Credit Corporation, the minister replied that the question was under advisement. The matter has been under consideration since last June and it is well known that the corporation will loan over $100 million to Canadian farmers this year.
In my opinion, the Minister of Agriculture should make such an appointment immediately so that some will look after the interests of Canadian farmers in general.
Since I am on the subject of farm credit, I should like to say a few words in that connection. Last Sunday evening, I listened to a program on television where the hon. member for Lapointe (Mr. Gregoire) stated that only 109 loans were granted in the province of Quebec last year.
Subsequently, he asked the people to deny that fact. As a matter of fact, last year, in the province of Quebec, 804 loans were granted for a total amount of $11,434,700. This is a far cry from the 109 loans mentioned by the hon. member for Lapointe.
I should also like to refer to the building of a bridge between Three Rivers and Ste. Angele, in my riding. I hope that the Minister of Transport will soon be in a position to inform the house that the government supports the legislation carried by the Conservative government on March 4, 1963, so as to remove any doubts among my constituents who have been looking forward to the construction of this bridge for several years. It is high time it was built.
The Minister of Transport should necessarily face up to his responsibilities and say: "Well, the bridge will be built."
I would also like to discuss the new legislation granting a $500 premium for housing construction during wintertime. A $500 premium is paid for each dwelling; so if the house includes four units, a $2,000 premium is paid. But when the house has four units and an additional one in the basement, then no premium is paid.

I had understood, as many taxpayers in my constituency did, that the maximum was $2,000 and that if the house being built contained five or six units, the limit was a maximum of $2,000; but after explanations from the Minister of Labour (Mr. MacEachen); we found the situation is entirely different.
If the house being built contains five units, the owner receives absolutely nothing, whereas if the house being built contains four units, the owner will receive $2,000. I wonder whether there would be some means of improving markedly the provisions of that legislation. I am of the opinion it would be wise to allow those persons who build five housing units, one of which is in the basement, to benefit from this maximum premium of $2,000.
The last point I want to raise in this debate on interim supply concerns federal-provincial relations. You recall that, before the election on April 8 of this year, at a time when there was a Conservative government in office in Ottawa, the premier of the province of Quebec delivered an ultimatum. We were not the ones to use that word, the premier himself did in a televised broadcast. As a matter of fact, to a reporter who asked him:
Do you consider that part of your speech on the budget which refers to the increase in taxsharing to 25-25-100, as an ultimatum?
Mr. Lesage answered yes.
And according to an editorial published last November 23 in La Reforme, the official organ of the Quebec Liberal federation, it was indeed an ultimatum on the part of Mr. Lesage.
Today, we are entitled to ask ourselves whether Mr. Lesage would still have delivered his ultimatum to the federal government, prior to last April 8, if the Liberal party had been in office. As a matter of fact, during the election campaign, they said that the Grits had to be in power in Ottawa and at Quebec. And now that this is exactly the situation in which they find themselves, they feel the ultimatum no longer exists.
It was thought that ultimatum from the province of Quebec was to be taken seriously. But it is found that such is not the case. In fact, if you have a quick look around the house, you will see that the ministers from my province and all the other members, except the few that are here, have probably gone to meet Mr. Lesage to tell him: Do not feel sad, we will maintain at least the prestige of the federal government.
Mr. Chairman, the governments which, before 1940, succeeded each other in the province of Quebec-the Liberal as well as the Union Nationale governments-always fought

for the province's autonomy. But, unfortunately, during the war the Liberal government in Quebec and the Liberal government in Ottawa agreed to deprive that province of its taxing powers, while promising to give them back when the war was over.
Afterwards, the Quebec government fought unceasingly to recover its taxation rights yielded to the federal government. We need those fiscal rights because we want to carry through our education system which comes under the sole jurisdiction of the provinces.
We need these taxation rights to look after our highway system which comes under the sole jurisdiction of the provinces.
Moreover, we need these taxation rights because provincial responsibilities are forever increasing. We need the necessary funds to meet our ever increasing responsibilities and fulfil other commitments entered upon in every field.
Before closing my remarks, Mr. Chairman, I merely wish to say that several times in this house I heard members make speeches with which I did not agee. But I want every member who sits here, from whatever province he may come and to whatever party he may belong, to be able to talk freely and say what he really thinks.
I listened the other day to the hon. member for Port Arthur (Mr. Fisher). I liked his speech, not because I accept or approve what he said, but because I saw a member stand up and say what he really thinks. Even if we do not agree with the hon. member, we must act like gentlemen and let him speak freely, and perhaps do the same ourselves later on. I also read the speech which an hon. Liberal member made the other day in Toronto, and though I do not at all agree with what he said, he at least fully expressed his views, and that is what all those who represent various ridings here in this federal parliament, should do. And when we are gentlemanly enough to accept the fact that each hon. member may rise to express his views- in short, speak as he thinks fit-then the dialogue will start and we may say with some truth that in Canada, we are able to know what others think and to express our own thoughts.
Therefore we should stop whining whenever a member from another party and another part of Canada rises to say something with which we may not agree. If he is a member from Quebec, we have something to say about the views expressed by other members, and, if the member is from another province, he may object to our ideas. Well, we want all hon. members to be able to speak freely, and then we shall be able to reply and to air our own views. The only 28902-5-336i
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way a democratic parliament can operate is when the elected representatives of the people are able to express themselves as they see fit.
Those are the remarks I wanted to make, Mr. Chairman. However, I shall urge the government carefully to consider the points I raised. First of all, the dairy industry in eastern Canada; then, the prices paid for feed grain by eastern farmers in Canada; third, farm credit, and, more particularly the appointment of a vice president of the Farm Credit Corporation, and the possibility of increasing the loan ceiling so that family corporations may avail themselves of a higher loan limit than the present one of $20,000 or even $27,500; in the fourth instance the Three Rivers bridge. I would like the government to assume its responsibilities in that respect; in the fifth place I mentioned the $500 bonus. And finally I also dealt with federal-provincial relations.
Mr. Chairman, having said this, I shall conclude my remarks by asking this government to consider those six points in view of bringing about considerable improvement in those fields.


Erik Nielsen: Mr. Chairman, before embarking on the main part of my remarks I want to refer for a moment to the figures which the leader of the N.D.P., the hon. member for Burnaby-Coquitlam, put on the record this afternoon. He was speaking about the Liberal promises and was recalling them from memory. I think it was a fairly accurate recollection, but since there has been a complete disregard of the promises which the Liberal party made in the last election campaign with respect to equalization payments I should like to put on the record what the promises were. I am reading from a pamphlet printed by the National Liberal Federation, 251 Cooper Street, Ottawa, entitled: "The Policies of the Liberal Party, General Election, 1963". On page 7 of that pamphlet we find these words under the heading "Equal Partners in Confederation":
Work well with the provinces. National unity and good government in Canada depend on cooperation between Ottawa and the provinces. The essential foundation for effective co-operation, in all matters of national concern, is full respect for the rights of the provinces in matters within their jurisdiction. All Liberal policies will be carried out with this full respect.
Provide full equalization of provincial revenues from the tax fields that the provinces share with the federal government.
This is the only way the provinces can afford similar standards of services, and so provide equality of opportunities for all Canadians. A new Liberal government will make equalization payments which bring the other provinces up to the level of the richest, in revenue per head from shared taxes.

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This promise is just one of those several promises which have fallen by the wayside, which were expedient for the Liberal party to make during the election campaign, but which, when it comes to facing the hard facts of reality, and after speaking with the provincial premiers, they have discarded completely.
I asked earlier in the session why there was not some representation for the two northern territories in this federal-provincial conference. It might interest hon. members of the committee to know that the territorial governments signed five-year fiscal agreements which are exactly similar in all respects to the fiscal agreements signed by the federal government with the provinces.
As far as the territorial council of the Yukon is concerned, it is wholly elected and if it does not approve that fiscal arrangement it is not bound to sign it. It has full legislative authority in this regard. A similar situation exists in the Northwest Territories. I asked the acting prime minister yesterday, or the day before, what representation was given to the Yukon and the Northwest Territories at the dominion-provincial conference. He said, as has been said in the past, that the matter was being considered. There is a committee in the Yukon, consisting of three members of the council, which calls itself the advisory committee on finance. The commissioner of the territory, who is a federal civil servant, is required to sit with that committee during the process of preparing the territorial budget. The committee visits Ottawa once a year for the purpose of discussing with federal officials the fiscal affairs of the territory. The federal-provincial conference has made decisions with respect to indian affairs, public works, health and welfare and virtually every federal activity in the provinces and in the territory. I have not heard one member mention today the fact that there are Canadians who live in the north and who contribute to the revenue of this country. It seems to me that in this situation some voice should be heard from the territories before any new tax arrangements are entered into between the federal government and the provinces.
Perhaps through lack of information, perhaps through ignorance of the territories involved, members of this house and of the committee are prone to forget that 40 per cent of Canada's land mass lies north of the 60th parallel and that this is a region from which the federal government derives a substantial revenue. The Yukon, alone, provides 90 per cent of Canada's gold. It is true that much of this revenue finds its way back to the territory by way of provision for the construction of roads, the building of homes

for Indians and other federal projects. The fact remains that the territory government is autonomous. It has these democratic institutions set up and has virtually the same legislative powers as the provinces with certain exceptions. One of these lies in the field of natural resources, from which the federal government derives most of its revenue. This is why the federal government has the responsibility and duty to spend money in the north to encourage the development of resources which it owns on behalf of all Canadians. It is no excuse to say that, because the territory comes under the jurisdiction of the Minister of Northern Affairs and National Resources to at least some extent, it should not be represented at fiscal conferences such as that which has gone on in Ottawa this week. Since the federal government does own these resources it should speak in that capacity in these arrangements with the provinces; and that, I imagine, is what the minister has been doing at this conference. What I am concerned about is that no territorial voice has been heard at the conference to express the northern point of view.
The territorial council in the Yukon unanimously passed a resolution requesting representation at these federal-provincial discussions. I think that was a reasonable request, and the government should have had no difficulty about accepting it. The council did not go as far as to say there should be full representation at the conference. They wanted simply to sit in as observers, so that they could take back their observations to assist them in their deliberations in the territory. This session the council passed a resolution calling for expert assistance from the Department of Labour in connection with matters which were of concern to them in the Yukon. They also passed a resolution calling for assistance from the Department of Transport. The council has repeatedly passed resolutions asking for the extension of the emergency landing strip construction program in the Yukon. They say in their sessional proceedings that the reason continually given by the Department of Transport for not improving these facilities is the cost which would be involved. Surely this could be the subject matter for discussion at a conference of the kind which has been going on this week; it is a subject with which the council is properly concerned.
I express concern about the amount of expenditure of a federal nature which has gone into the northern territories in the past six years, and what is likely to be in the books for the future. I think many Canadians lose sight of the fact that the resources of the

Yukon and of the Northwest Territories belong to all Canadians. This parliament, because it has direct jurisdiction over the natural resources of these areas, has a responsibility and a duty to spend money for the purpose of developing these northern territories. If this approach is not made, these areas will remain undeveloped in direct proportion to the extent to which the federal government is disinterested in the development of the territory.
Upon returning to the house, after a visit I had made to the Yukon, I read with interest what had been said by the Minister of Northern Affairs and National Resources, when introducing his estimates. He indicated that the federal government would in future place much more reliance on private investment for the development of the territories than on a continuing program of development construction. I think this would be a tragic mistake. If the government does not continue the development road program which we instituted in the northern territories, together with the roads to resources program in the northern parts of the provinces, the effect will be to diminish private investment by corporations and others in the north. I obtained from the Minister of Transport an assurance that a new terminal building will be constructed in Whitehorse. This is a good thing. Of course, the decision was made by the previous government, though in a different form. The previous plan was to convert one of the existing hangars in the city. The minister has informed me that the new plan is to construct a new building.


George James McIlraith: The cost of conversion was too high.


Erik Nielsen: I understand the reason why it was too high was because of the requirements, or demands of the Department of National Revenue and its customs and excise branch, as always seems to be the case when that particular department is concerned with public buildings. At any rate, the idea to give us a building is an extremely good one. We were all hoping it could have been constructed during the winter, in order to relieve the unemployment situation in the Yukon.
This is another area in which I think a word or two might be said. We heard all sorts of high flown promises during the last election campaign that unemployment was one of those matters that was going to be cured immediately upon the Liberal government taking office. The 60 days of decision were going to accomplish wonders. In very short order there would be full employment; that is how it was described. There seems to have been some disagreement among certain members of the Liberal cabinet. The Minister
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of Finance, for instance, said that full employment was not possible and I believe the Minister of Trade and Commerce said the same thing. However, the Prime Minister went across the country saying that this was not an impossible achievement at all and that it would be accomplished. There were statements made by the Secretary of State. Here is one that was reported in Summerside on March 26, 1963 and in Charlottetown on March 27, 1963 in which the Secretary of State said:
It is the Liberal policy to see that every able person willing to work will have the opportunity to earn a decent living.
That is what he said. Now, in co-operation with the minister of northern affairs several years ago, I developed a program for creating jobs for the Indian people around the Yukon. I am sure all hon. members will agree with me when I say that this is one sector of our population that, instead of having to rely on welfare handouts, deserves job opportunities being created in order that they may keep their self-respect. This program that was developed was a program of slashing timber for rights of way for the construction of new development roads in both territories, I may say.
Now, I received a copy of a letter for which I asked, from the assistant deputy minister of northern affairs, dated August 16, 1963. This is on the deputy minister's stationery and reads as follows:
Just before leaving Ottawa you inquired about clearing on the Watson lake-Ross river road in the winter of 1963-64.
The department intends to clear 24 miles between mile 120 and mile 144. As previously, the work will be supervised by the Indian affairs branch and it is expected that about 40,000 man hours of labour will be provided at $1.60 per hour, and that approximately 100 workmen will be required.
It is signed by Mr. Cunningham, assistant deputy minister. I was very happy when I received that letter because it meant that these jobs were going to be made available to people who sorely needed jobs. When I got back to Whitehorse I made an announcement which was published in the press, and the Liberal organization was quite annoyed that a Conservative member had access to this information which, after all, is public. In any event, I understand the minister raised quite a ruckus when he got back to his department, trying to find out who had passed this information on to me. The upshot of this whole thing has been that the program has been cancelled, I understand. I think the reason for its cancellation is simply an endeavour to embarrass me politically, and I feel that is a very sad state of affairs.
A decision was made by the government to go ahead with the slashing program. The

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announcement was made, and unfortunately it was not made by the minister when he visited the Yukon. As soon as he returned, I discovered that the program had been cancelled. What the minister is doing by cancelling the program is putting 100 men out of work and denying 40,000 man hours of labour to people in the Yukon who sorely need it. It seems to me that this particular project deserves some consideration.
I see the Minister of Transport in his seat and I should like to draw to his attention the proceedings during the last session of the Yukon council during which there was a request for the officials of his department to visit the Yukon for the purpose of sitting down with the council to discuss airport costs. There is the question of lengthening the runways at Mayo, or constructing a new airport there. The huge iron ore holdings of the companies north of Mayo demand that there should be some efficient transportation link set up for the purpose of encouraging that development. It would not need to be restricted to that area, but the whole central portion of the Yukon could be considered because there are potentially rich resources there and there should be an airport of higher standard than the one existing. The excuse the council is always getting from the minister's department is the high cost. They have asked for someone to discuss the problem with them.
I turn now to post offices. This business of employment is a very interesting one. Unemployment was the subject of a hue and cry by the Liberals while they were conducting the last two election campaigns, and it is the subject on which the least amount of effort has been exerted by them during the months they have been in office. Perhaps I am a little unfair there, because there has been some increase in employment, particularly amongst the ranks of the Liberal party and particularly in the Post Office Department. It seems that there has been a rash of appointments and a rash of discharged employees in the post offices across this country. It appears that the purpose of this move is to replace existing office holders who are not Liberal supporters with those who are.
I am very sorry to observe that the fair program of calling for tenders for every mail contract in the last six years in the Yukon has now been discarded. I understand these contracts are being allotted by appointment on the basis of selections made by the government. I think the fair approach would be to call tenders for all of these contracts, so that interested Canadians could bid on them because, after all, they are all taxpayers.


Lucien Lamoureux: Order; it being five o'clock, shall I rise, report progress and ask leave to sit again this day?


Some hon. Members:: Agreed.
Progress reported.


John Whitney Pickersgill: It is understood, Mr. Speaker, that when the committee resumes later this day it will take up the various estimates of the Minister of Industry and we will not return to this matter. Perhaps I spoke a little hastily when I replied to the hon. member for Parry Sound-Muskoka (Mr. Aiken).


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


Jean-Eudes Dubé: Mr. Speaker, you will recall that this morning I stated that at this juncture of our business I would ask for unanimous consent to proceed with the second reading of Bill S-46, an act to amend the Quebec Savings Banks Act. Accordingly, by unanimous consent, I would like to move, seconded by Mr. Tardif, that Bill S-46, an act to amend the Quebec Savings Banks Act, be now read a second time.


Stanley Howard Knowles: Are copies of the bill available, Mr. Speaker?


Mr. Deputy Speaker:: Has the hon. member unanimous consent of the house to put this motion?


Some hon. Members:: Agreed.



Jean-Eudes Dubé: the second reading of Bill No. S-46, to amend the Quebec Savings Banks Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Lamoureux in the chair.
On clause 1-Repeal.
Stanley Howard Knowles: This catches some of us as a bit of a surprise. Perhaps we could have a very brief explanation-not the kind the Secretary of State would give-a brief one.


John Whitney Pickersgill: That is a reflection.


Stanley Howard Knowles: Which the minister enjoys. [Translation]


Jean-Eudes Dubé: Mr. Chairman, with your consent, I will try to explain Bill S-46 in the shortest possible time.
Bill S-46 is an act to amend the Quebec Savings Banks Act. Its purpose is to amend

the 1954 act, which had itself been amended in 1957. The purpose of Bill S-46 is twofold:
1.	To make it easier for the two savings banks concerned to appoint directors;
2.	To authorize the two banks concerned to make loans on the security of first mortgages up to 60 per cent, instead of 40 per cent as is the case at the present time.
You will notice in clause 2 of Bill S-46 that the two banks concerned are:
1.	The Montreal City and District Savings Bank.
2.	The Quebec Savings Bank.
I believe that the explanatory notes on the bill are plain enough with respect to the results ensuing from the proposed amendments.
There are three clauses in the bill which I move tonight.
The first one is to vary the qualifications required from the directors. According to the present legislation, a director must hold $5,000 worth of stock; the purpose of this bill is to replace $5,000 by 500 shares.
The second clause of the bill is to reduce the value of the shares from $10 to $1 a share. Under the present legislation, a director must hold $5,000 worth of stock, that is 500 shares at $10 each. Now, the shares of the two banks in question sell at a price well above $10. As far as the Montreal City and District Savings Bank is concerned, they sell at $160 each, and as regards the Quebec Savings Bank, $74 each; so that according to the present legislation one must be the owner of $80,000 in shares to become a director of the Montreal savings bank and of $35,000 in shares to become a director of the Quebec Savings Bank.
I submit with respect to the members of the house, and to you, Mr. Chairman, that those amounts are too high. Those two banks have directors aged 70 and over. Those men must be replaced by younger directors and you cannot easily find a young man with ability and that kind of money.
So, the combined effect of those two clauses is to reduce those amounts to some $8,000 and $3,500 respectively.
The third clause of this bill is quite simple. Its purpose is to replace 40 per cent by 60 per cent.
In brief, the purpose of those three clauses is this: the first two clauses are to facilitate the election of new directors in the two banks, and the third clause is to authorize those two banks to lend up to 60 per cent of their deposit liabilities.


Mr. Ricard:: Mr. Chairman, could the hon. member for Restigouche-Madawaska (Mr. Dube) tell us for each of the two banks concerned, what is the number of directors?
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Jean-Eudes Dubé: I regret, but I do not have that information.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Batten):: When shall the said bill be read a third time?


Some hon. Members:: Next sitting of the house.


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Mr. D. M. Fisher (Port Arthur) moved: the second reading of Bill No. C-30, to amend the Broadcasting Act (community antenna).
He said: Mr. Speaker, this bill should really be read in connection with my companion Bill C-49, to amend the Radio Act. In the Broadcasting Act as it was enacted and assented to in December, 1958, section 10 gives these objects and purposes:
The board shall, for the purpose of ensuring the continued existence and efficient operation of a national broadcasting system and the provision of a varied and comprehensive broadcasting service of a high standard that is basically Canadian in content and character, regulate the establishment and operation of networks of broadcasting stations, the activities of public and private broadcasting stations in Canada and the relationship between them and provide for the final determination of all matters and questions in relation thereto.
I would like to turn to section 2(b) where "broadcasting" is defined as follows:
"broadcasting" means the dissemination of any form of radio electric communication, including radiotelegraph, radiotelephone, the wireless transmission of writing, signs, signals, pictures and sounds of all kinds by means of Hertzian waves, intended to be received by the public either directly or through the medium of relay stations;
I would point out that this amendment would change that definition so that "broadcasting" would have added to it:
The redissemination for commercial gain of broadcast matter by wired transmission intended to be received by private persons.
The reason for introducing this amendment is that I think the national purposes, the national objects of the Broadcasting Act are beginning to be affected more and more by the growth and development of the community antenna systems, or so-called wired systems. On April 17, 1963, the board of broadcast governors, who had referred to this problem a number of times in its annual report, including a reference on page 19 of its report for 1961-62, issued this press release:

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The board has for some months now been concerned with the effect of the distribution of television programs by means of cable systems on the distribution of programs by broadcasting stations. The board's concern centres around the fact that broadcasting stations, as a condition of licence, are directed by law to achieve certain national purposes. Distribution of programs by cable system is not so directed. Thus, if the achievement of national purposes is threatened by the use of cable systems, the board feels it should be in a position to draw attention to the conditions which create a threat and to recommend such action as it deems necessary to the preservation of the achievement of the national purposes.
In order to receive evidence, opinions, arguments and suggestions, the board will hold a public hearing on the general subject of the relationship between the development of wired television systems and broadcasting, and broadcasting policy.
The board seeks representations from broadcasters. An opportunity would be given to operators of wired systems to make representations, if they wish to do so. The board is hopeful that groups of citizens who are neither broadcasters nor operators of wired systems will contribute their opinions on the matters outlined in the notice of hearing.
Because of the vital nature of this hearing in the whole area of serving the national purposes through the broadcast media, the board is making arrangements to have the proceedings transmitted on both radio and television.
I do not even know whether the board had the power, but no one questioned their power. Anyway, they did call these hearings and I will refer to them later. I should like to point out that it has been the custom here for many years to have a special committee on broadcasting. In 1960-61 this committee met. I have in my hand a volume of the evidence-it is very thick-and amongst the evidence heard were representations with regard to wired systems. In the final report of this special committee one of the recommendations made was No. 4, which appears at page 992:
That the governor in council consider the expediency of making reference to the Supreme Court of Canada for the purpose of determining:
(i)	the constitutional jurisdiction of the parliament of Canada as to those means of electronic communication known as wired systems;
(ii)	and, in the affirmative, whether such wired systems are covered by the word "broadcasting" as presently defined under paragraph (b) of section 2 of the Broadcasting Act, 1958.
At those same hearings there was a report of the committee on wired systems. I may not be completely accurate here, because I have not been able to track it down as yet in the hearings, but as I understand it the members of this committee included the Canadian Association of Broadcasters, the Department of Transport, the members of the board of broadcast governors and members of the Canadian Broadcasting Corporation. They presented this fairly substantial report which had a number of conclusions, and I would like to put the conclusions on the record. I wish to do so because I think it is necessary at this time, in suggesting this

amendment, that the house should know I am not trying to cut the throats of the community antenna people in any way, shape or form. They perform a very real and important function in many parts of the country. I want to come at it from the point of view of the preceding history and the fact that things are changing very rapidly and we need to do something about it. It seems to me that we need to do something about it in terms of the framework of the national purposes which have been the objective of the broadcasting system in Canada since it was developed early in the 1930's-I might point out, by a Conservative government-and have been carried on and confirmed ever since by succeeding governments, royal commissions and committees of the house. These were the conclusions of this special committee on wired systems:
The evidence of the growth of television broadcasting since 1952, the substantial coverage already achieved, and the emergence of "second" television stations suggests that the policies and regulations designed to advance the national purposes have not been seriously inhibiting in their effects. The comparatively small total coverage of wired systems suggests that the service offered by them has not had a significant retarding effect on television broadcasting generally.
This was in 1961:
In some situations community antenna television systems have provided service where television service was not otherwise possible. To the extent that these systems have extended the coverage of Canadian television broadcast services, they have made a positive contribution to the national purpose; and are continuing to do so.
I might say amen to that:
In other situations where they compete with local television broadcasting, they provide alternative viewing by extension of Canadian and U.S. signals. The extension of the reception of U.S. signals does nothing to advance the national purposes. However, the general effect does not appear to have been significantly detrimental to the national purposes. The operations of some broadcasting stations affiliated with the corporation may be less profitable than in the absence of competition from wired systems; and some reduction in the costs of the national public serveie might result from the elimination of the wired system. It might also be easier for the board of broadcast governors to apply its regulations. But it does not seem that these factors are so substantial as to justify a general extension of controls over wired systems, having in mind that regulations similar to those now applying to television broadcasting would prevent any CATV system from carrying signals of U.S. stations. However, in marginal situations, it must be conceded that the introduction or increase in the service of wired systems could prejudice the national purposes required of broadcasting.
My point here is that in 1961 the effect was not considered inhibiting, but it was pointed out that the introduction or increase in the service of wired systems could prejudice the national purposes required of broadcasting. The submission goes on:

It has been pointed out earlier that there is no doubt that some aspects of the operation of CATV systems could be brought under the terms of the Broadcasting Act. (There is some doubt as to whether all aspects of CATV operations could be included). It has also been pointed out that CATV systems are licensed by the Department of Transport.
That is all I wanted to read from this point of view, except the final sentence, which is:
Because of the board's responsibility-
That is, the board of broadcast governors:
-for the national objectives under the Broadcasting Act, and the similarity between the end results (television reception) of television broadcasting and the closed circuit system, the board of broadcast governors should be expected to keep informed on the development of closed circuit systems, and if necessary to report to the minister on their impact on television broadcasting.
This particular committee report also has an appendix A which sets out the commercial broadcasting and receiving stations, the community antenna television systems and the rules and regulations under which they operate. It is my contention that the situation has now been reached where the size of the community antenna television audience is large enough that we need to consider its impact on the national purpose. It is my contention that we should bring it under the definition of broadcasting in the act so we can be sure that in its future extension it does not cripple the present licence holders and the objectives of the national system.
I should like to point out that I specifically say "commercial" in the bill, because there are a great many community antenna television set-ups in Canada that are formed on a co-operative basis or on a non-profit basis, particularly in smaller towns, or they may be provided by companies in company towns to many of the residents of those towns. My specific purpose is to bring under the act the mushrooming development of very strong, powerful, commercial organizations that are beginning to establish community antenna systems very widely, which are promoted well and in such a way that they are getting the kind of response that is digging very strongly into what I conceive to be the national purpose and the effectiveness of the present licence holders of radio and television stations.
I might refer to the promotional material of Lakehead Videon which operates in my own area. They have gone from a very small number of subscribers until they are up in the thousands now. They do a very good job of pushing their service. I have a kind of brochure of theirs here which sets out how cable television works and points out that subscribers can get three extra American channels as a result of their service. They also offer a certain number of specials, such as 28902-5-337
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fights and other sporting events that are available on their service which, as far as I am concerned, extend them beyond just the normal area and turn them into real competitors of the broadcasting stations. I want to make it very clear that the response to Lake-head Videon in my own area is such that it would be very unpopular if any regulation led to the cancelling of the kind of service they are providing. I would be persona non grata. I want to emphasize again that this is not my intention.
I have a Canadian Press report of the meeting of the board of broadcast governors last June which I should like to put on the record, because it is the best summary I have been able to find and encompasses what took place at their meeting. It is found in the Gazette of June 5, 1963 and reads as follows:
Public and private broadcasters sided together Tuesday before the board of broadcast governors in expressing fears of a potential threat to their existence in the event of the development of closed circuit pay T.V. on a national scale.
"They're five feet high and risin'," said R. C. Fraser, C.B.C. vice president for corporate affairs, of the recent growth of community antenna (cable) systems in Canada.
Added Spencer Caldwell, president of the rival privately owned C.T.V. Television Network Limited: "There is a possibility that if cable T.V. reached such proportions that it reduced our revenues and ratings, it would make it difficult for us to achieve our national purpose as broadcasters."
In reply, F. T. Metcalfe of Guelph, Ont., president of the national community antenna television association, said: "Basically, the real threat to a national purpose in broadcasting is that the Canadian viewer wants a choice of service".
He contended that in effect, most of Canada's 322 community antenna systems serving some 200,000 households are only a superior aerial service, making possible improved reception of Canadian and U.S. signals. They were not in competition with broadcasters.
The public session was called by the B.B.G. to give persons associated with the broadcasting industry an opportunity to air opinions about the relationship of wired systems with licensed television stations.
B.B.G. vice chairman Carlyle Allison said the broadcasting industry's concern is with the future extension of wired systems to "the possible detriment of what is called 'free television'." The B.B.G. did not intend to make a recommendation to the transport minister following the hearing, he said, but would provide a summary of opinions expressed so the government itself could determine whether any further actions is required.
The broadcasters differed in their specific recommendations but all were agreed in essence that the possible linkage of community antenna systems into what in effect would be a closed circuit national network would pose a serious threat to them.
I will not go on with the points that were made. It seems to me that is a fairly good summary. I should like to refer to some missionary work that was done by the president of the national community antenna television association of Canada, Mr. Metcalfe. I have been in touch with him, have been

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interviewed by him and have had a number of letters from him. One of the points he made to me was that I was carrying a torch for the private broadcasters and he thought this was a most retrograde step for a person identified with my particular party. I want to make it perfectly clear I do not feel like carrying a torch for the private broadcasters, except in the sense that if we in parliament set up a licensing and regulating authority, force some persons to operate under it and then by not acting allow some other kind of agency operating in the same field to come in and undercut the persons we have charged a licence fee and whom we require to do certain things, I think we have a responsibility to look at the situation and see whether it is on all fours with simple equity. It is in this sense that I have brought forward the bill.


Mr. Greene:: I wonder whether the hon. member would permit a question. Has the hon. member considered, or can the authorities he cited earlier answer the question whether or not redissemination for purely intraprovincial purposes is within the federal ambit of legislation, or is this not purely a provincial matter if it is within a province?


Douglas Mason Fisher: This is brought up in a number of places in the literature I have, and I am not going to go into it because as far as I am concerned it is a morass. For example, as I understand the situation the Telemeter subscription system in Etobicoke would not be affected by this particular change in the act. My point is that what would be brought under the act by my amendment would be any system operated for a profit that took out of the air Hertzian waves and rebroadcast them to wired sets in homes. That is as far as I want to go with respect to the point the hon. gentleman raised. There are some differences of opinion, and perhaps the minister who speaks for the government in this regard may be able to clear them up.
Finally, in relation to Mr. Metcalfe and the national community antenna television association, I want to say that they made a very good case in the brief they presented to the board of broadcast governors that they should not be put under the act and under the control of that board. Personally I do not feel their case is good enough. I think that the extension, particularly in terms of the skill and the capital they have behind them, is such that the thing is really going to become sweeping. I know, for example, that the owner of the Montreal Alouettes, Mr. Workman, intends to get into this field-I believe he is already in it in order to push his football games and other sporting events. I

know that at the present time there is a setup in Toronto for the rebroadcasting of certain hockey games which may be extended. I feel that this bill would not apply to the telecasting of Montreal Alouette games by means of a wired system, as long as the actual picture presented is not taken off something which is sent out by means of the so-called Hertzian waves. I know from contacts I have had that the wired systems are growing in number very quickly. It is only logical to assume that in the very near future they will be in a position to provide what is in effect a network. I am not concerned, and I do not think other members should be, over the kind of financial set-up they may have or how they extend their system. But when you have in effect a system which is competing in the same kind of programming with the licensed stations and with our national corporation, it seems to me it is time we acted.
It was more in the spirit of encouraging the government to accept what I think is their responsibility than with any intent to create havoc among the community antenna people that I brought forward this bill and a sister or brother bill to amend the Radio Act. If the Secretary of State (Mr. Pickersgill) would care to make a comment from the point of view of the attitude of the government on this question, I am sure not only I but everyone in broadcasting would be very interested in his remarks.


John Whitney Pickersgill: Mr. Speaker, I do not intend to take up very much time in what is an hour which I think should be properly devoted to members of the house who do not sit on the treasury benches, but the hon. gentleman has invited me to express a view and I feel that this is a matter of very grave national importance.
In the 1920's when radio broadcasting began to grow in this country it was the view of the government of that day, a view shared in the early thirties by the Conservative government which succeeded the government in office in the twenties, that radio broadcasting could have such an important influence upon our country that it was a matter of major concern to Canada, our being, as we were then and still are, a country with a population about one tenth that of the country to the south of us. The governments of those days felt it was important that radio broadcasting should therefore be Canadian.
I do not think that importance has diminished one whit with the years. We have taken the view about private corporations that broadcast as the hon. member for Port Arthur (Mr. Fisher) has indicated, that they must be licensed by the public authority. We have also taken the view that they must be owned

predominantly by Canadians, and I think that that is the right view to take. I do not think that anyone in this house of any party would seriously argue that there should be allowed to take place any development that it is within the power of this parliament to control or to legislate about, which would indirectly undermine what has over a period of 40 years- indeed, ever since the beginning of broadcasting, or licensed broadcasting, assumed any real importance in our community life-been regarded as a matter of national importance, a matter perhaps affecting the very existence of our country as a separate entity. With television, of course, I think the influence is far more pervasive.
This community antenna system has many things to commend it. I am in complete agreement with the hon. member for Port Arthur that a community antenna system which merely provides better reception for broadcasting in any given area is highly to be commended, and perhaps it is the only way that many communities in this country which are somewhat remote and isolated, particularly in constituencies like those represented by the hon. member himself and by me, can expect to get good reception.
But it is quite another matter if a system is to be created which can do indirectly what we do not permit broadcasters themselves to do directly. If community antennae are to be put up in places like Winnipeg and Vancouver for the purpose of bringing in United States stations which would not be allowed to broadcast in Canada, then it seems to me it is perfectly clear that the intent of parliament, which I believe must have influenced every successive government which believed in the view that it is the intent of the Canadian people, is thereby being circumvented.
In the few months I have been a minister I have taken a very serious view of this problem, as has my colleague the Minister of Transport (Mr. Mcllraith) as well. At the present moment, or almost at the present moment because this morning I read one of the papers on the subject in the few minutes I had before coming into the house, we are giving very careful consideration to recommendations which we feel we ought to bring before our colleagues as to possible courses of action in this field. I have not, and neither has the Minister of Transport, had the time or the opportunity yet to discuss this matter with my colleagues. Therefore I am not attempting, and it would be wrong for me to attempt, to indicate what disposition the government feels it should make of this matter or what disposition it feels it should ask parliament to make.
28902-5-337J
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I have the impression-this is one reason the hon. gentleman has, of course, introduced the bill-that there must be some amendment to the law, if there is to be any kind of effective control of competition of a kind which would not be permitted by broadcasters themselves, Canadian broadcasters, in this field. It seems to me that it is very likely that there will have to be legislation of that sort; but precisely what form it ought to take, how far it should go, and so on, is something which it would be very presumptuous of me, with the rather scanty information I have on the subject, to attempt to say at this stage. However, I have no hesitation in saying that the position of this government, and I hope it is the position of the whole house, is perfectly clear-that we intend to do everything we can to see that broadcasting remains substantially, to the greatest degree we can reasonably make it, Canadian.


Marcel Joseph Aimé Lambert: Mr. Speaker, along with the Secretary of State (Mr. Pickersgill) I have been a member of the broadcasting committee, and I think this was one of those points on which the hon. gentleman and I were in accord without too much difficulty during the hearings of that committee. Over the past years I had a considerable amount to do with broadcasting, in my position of parliamentary secretary to the minister of national revenue; and this matter was one which exercised me a good deal.
It has been suggested that the Broadcasting Act and the Radio Act were not sufficiently broad in their wording to include what is really known as broadcasting by wired systems. With all due respect to the hon. gentlemen who held that view, I felt there was a very strong argument that the act as presently designated covers the subject matter. It will be remembered that the question of federal jurisdiction over broadcasting was referred to the supreme court many years ago and the reference at that time included dissemination by means of Hertzian waves. If we look at the act itself, at section 2(b) we find a definition of broadcasting given. Since "broadcasting" includes the dissemination of any form of radio electric communication intended to be received by the public either directly or through the medium of relay stations, I think there is a highly arguable case for the contention I am now putting forward. In line 2 of paragraph (a) of clause 2 of the bill, after the words "radio electric communication" the text goes on to say: "including-" -that does not mean including exclusively; it means "including"-"radio telegraph, radio telephone, the wireless transmission of writing, signs, signals, pictures and sounds of all kinds by means of Hertzian waves intended

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to be received-", and so on. Notwithstanding a good deal of argument to the contrary, I have not been persuaded that my interpretation of the act in this regard is entirely wrong.


Douglas Mason Fisher: Would the hon. gentleman permit a question? Would he not agree that up to the present time both the broadcasting industry and the sponsors of community antennae have taken the attitude that the definition does not cover these systems?


Marcel Joseph Aimé Lambert: In that regard, I know the advice given to various bodies has raised some doubt about whether they are covered. Without telling tales out of school I think it would be fair to say that the board of broadcast governors, who are concerned about this matter, felt it might be unwise for them to embark upon a program of controlling this form of broadcasting activity only to find, perhaps after having been taken to court, that they had no authority to do so. I suggest it is for that reason they have not acted. This is a lawyer's law. As long as it does not hurt anyone too much, it is difficult to get an amendment passed.
If this proposal were to be acted upon now, I would be in favour of it. I am fully in favour of what the hon. member has proposed, and I think the Secretary of State, too, is ad idem with the hon. member. It has been the purpose of the Broadcasting Act and of all parliaments since the 'thirties, emphasized and underlined by successive royal commissions and governments, both Liberal and Conservative, that there should be no division in this regard and that broadcasting is to be the subject of a definite aim. We have a national broadcasting policy outlined in the Broadcasting Act which prescribes the duties of the board of broadcast governors on the one hand and of the Canadian Broadcasting Corporation on the other. As to the proposition put forward with regard to these isolated areas, these community areas where the system proposed would ensure a clear signal to those with television sets, that is all right. But even now-and I could cite cases- applications to build a reception tower with a microwave relay to another tower for dissemination thereafter by cable must be submitted under the Radio Act to the Minister of Transport, and there is an informal reference to the board of broadcast governors. There is already partial control but it is not as overt as it should be.
What is the danger about informal broadcasting? It is, really, what I consider to be the possibility of creating glorified satellites of United States stations along the southern border of our country. We have set up regulations which govern the operation of our

Canadian systems. These look to the financial stability of applicants. Licences are withheld or deferred on the basis of economic considerations. Yet if it is permitted to establish without restraint wire systems which are, in effect, satellites of non-Canadian stations we would be defeating the whole purpose of our broadcasting policy. I know there are some of these so-called wire systems which are really baby stations. At certain periods during the day they introduce news broadcasts and sports broadcasts into their program schedules. Where does one stop? One might then introduce local programs.


Douglas Mason Fisher: And commercials.


Marcel Joseph Aimé Lambert: Yes. The hon. member for Port Arthur says you begin to slip in the odd commercial. This is natural and you would then have a baby station operating without any control.
I, myself, think such stations must be brought under supervision of the board of broadcast governors. I would have hoped to see this done earlier, because millions of dollars have already been invested in this direction and if action is deferred too long the situation becomes set, economically. Suppose legislation is then introduced to bring these wire systems under the control of the board of broadcast governors. There may be good reason why some of them should be eliminated; yet this could not be done because to take action would be to operate to the detriment of a business established quite legally under the law as it existed.
However, as I say, my view is that the board of broadcast governors already has power in this regard under the interpretation I have placed upon the act. Perhaps the quickest way to solve this difficulty would be for the board to act on one of these cases -to have one of these companies summoned to court to show cause. This might be quicker than trying to get the government to amend the act. I do not know. But with the purpose or objective of this bill I am in full accord, though I hope action can be taken without the formality of making an amendment at this stage.


Mr. Yves Forest (Sianstead):: Mr. Speaker, I must say to the hon. member for Port Arthur (Mr. Fisher) that, personally, I do not share at all his opinion with regard to his proposed object in introducing this bill.
Those sections which complement Bill C-49 are very short; indeed, it is not a question of changing the definition of the term "broadcasting", but only of giving it a broader sense. However, I believe that this bill could seriously affect a very great number of T.V. viewers.

This proposed amendment of the Broadcasting Act and Radio Act will result in placing T.V. community aerials systems or other similar operations under the control and supervision of the board of broadcast governors, if I understand the explanatory notes accompanying the bills.
Personally, I feel that the board has enough authority as it is, and that it should not be allowed to interfere in a field which is not its concern, especially in view of the nature of this system and of the service it renders.
In addition, I truly fear for the freedom of viewers who can now select the program or channel of their choice. Indeed, under Department of Transport regulations, licenses are issued only for systems which meet the technical and mechanical requirements concerning, for instance, the height and location of antennas, the type of cable used, the territory served, and the signals which are received and transmitted.
Mr. Speaker, I also feel that the result of those regulations is to restrict the broadcasting of television programs by cable to the waves that can already be received in a given area through proper equipment or antenna.
It is essential, of course, that regulations should be applied to ensure the orderly and proper operation of this system.
In order to be in a position to decide whether it is advisable or necessary to pass this legislation, it would be necessary to know something about the services rendered by this system and the part it plays in the broadcasting of programs.
At present, television signals are picked up by two mediums in areas more or less distant from broadcasting stations; first of all, through the adjunction of one or several individual antennas, which is the first and only method possible in many areas. Generally, this method is rather costly for the owners of television sets. In addition, it involves a great deal of inconvenience, without ensuring an adequate reception in spite of the high standard of the receiving set or of the broadcasting stations.
On the other hand, a group of individuals or a corporation may set up at a location that lends itself to the reception of waves, a tower or powerful community antenna that would surely be more costly, but the cost of which could be divided among all users. They would thus be assured of a much better reception from distant or low-power stations, as well as of a wider variety of programs.
In short, this is only an extension of the usual antenna, except that a main antenna is located in a place where reception is better and where interference is reduced to a minimum.
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This antenna, as any another ordinary antenna, can only pick up signals which can already reach a given area. It neither reduces nor adds anything to the broadcast, it does not alter in any way the waves which are merely picked up and retransmitted. It is an absolutely passive element which moreover does not interfere in the public field.
It can be claimed, that in such a case, the need has created the means.
Some ten years ago, there were few, if any, such organizations in this country.
Today, there are more than 300, with an average of 800 subscribers for every system. A total of 240,000 homes, that is about a million people, are served by such systems.
And more than half of those systems operate in the province of Quebec.
I remember that about ten years ago, more particularly in the eastern townships, we had to set up expensive individual antennas, which frequently did not work because of storm damage, on account of the distance from Montreal, for topographical reasons or due to the mountains around us. In fact, we were getting better pictures from stations on the other side of the border, in the United States, and I think that this was the case of all areas near the American border.
Now, thanks to that system, we are able to watch Canadian stations, and more particularly those of Montreal, which was formerly impossible.
And we now have a choice between two fine relay systems, and can enjoy television of a quality we never knew before.
Those systems are appreciated by all their users. They supply us with very high-grade television at a very reasonable rate and they enable us to watch Canadian programs in our district, which are generally excellent, even if there is room for improvement.
The subscribers have a diversified choice and are completely free to watch whatever program they like.
The local broadcasting stations have no reason to fear such a system, for it multiplies the number of telespectators and thus increases the audience which can enjoy its favourite programs.
Mr. Speaker, I suggest that any additional regulations would be unnecessary and unwelcome. It might interfere with the liberty of the individual, who wants to be able to choose whatever program he pleases.
Mr. Speaker, I see that it is six o'clock. I had several things to add. I hope that I will be able to continue my remarks if and when Bill C-49 comes before the house.


The Acting Speaker (Mr. Batten):: Order; it being six o'clock, I must advise the house that

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the hour for consideration of private members' business has expired. Since the business for this evening will be the consideration of the estimates for the Department of Industry, would the house agree to go into committee of supply now?


Some hon. Members:: Agreed.

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


Herman Maxwell Batten: It being six o'clock, I do now leave the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 7 p.m.
Herman Maxwell Batten: Order; house
again in committee of supply on the estimates of the Department of Industry.


DEPARTMENT OF INDUSTRY
[Stage Direction]
Id. Departmental administration, $665,000.
Charles Mills (Bud) Drury: Mr. Chairman, the last time the estimates of the Department of Industry were under consideration it was suggested that a statement would be made by the Minister of Industry on the various activities with which he was charged, covering all of them; that this might well be followed by general statements by hon. members on all of these activities; and this would be followed by a detailed examination of the estimates of each of the several departments in the order I indicated.
The order I suggested was first the Department of Industry, then atomic energy, then the Department of Defence Production, the national research council and finally the department of public printing and stationery. I have made some remarks regarding the Department of Industry and regarding atomic energy, and this evening I will speak on the activities of the Department of Defence Production, the department of public printing and stationery, and finally the national research council.
Under the provisions of the Defence Production Act the Minister of Defence Production has exclusive authority to buy or otherwise acquire the defence supplies required by the Department of National Defence. Although the Department of Defence Production was itself established in 1951, the government's policy under which defence procurement is undertaken by a separate civilian agency dates back to the early days of world
[The Acting Speaker (Mr. Batten).]
war II. As I pointed out to the special committee on defence on July 30, at that time-[DOT]
-the Canadian government decided the procurement ot goods and services required for defence purposes would be under the control of a separate civilian organization staffed by people who, through experience, had become experts in the purchasing field. This permits the Department of National Defence to concentrate on military functions and, through unified buying procedures, tends to reduce the costs and bring the taxpayer the best possible value for the dollars that are spent on defence material.
This responsibility for the procurement of defence supplies is of very great importance. However, there are other additional responsibilities which are of almost equal significance. My department has the responsibility for defence development and production sharing with the United States, defence export activities with other friendly countries, and the co-ordination of Canadian activities in connection with the research, development and production program of the North Atlantic Treaty Organization.
In addition the government has adopted certain recommendations of the royal commission on government organization in respect to the establishment of a central purchasing agency to serve all departments and agencies, both civil and military, of the federal government, other than commercially oriented crown corporations, and also in respect to the transfer of certain responsibilities of the department of public printing and stationery. These decisions are of great importance to the Department of Defence Production, and I shall deal with these matters in greater detail later on.
As will be seen from the estimates which have been tabled, the most significant increase over the 1962-63 estimates is found under vote 25 covering development sharing. The purpose of vote 25 is to sustain technological capability in Canadian defence industry by supporting selected defence development programs. This has stimulated development activity to a marked degree. It has resulted too in other benefits such as maintaining capabilities and putting the companies in a position to obtain work in related fields. Initial sales of doppler navigation equipment, sonobuoys, Caribou STOL aircraft and turbo aircraft engines, for example, indicate yield ratios of 10 to one in dollars spent for development to export sales received. One project, which was assisted financially to the extent of approximately $1 million, has accomplished $30 million in defence sales.
Another item which I have mentioned is the Canada-U.S. defence production sharing program. This has resulted in 4J years of useful activity in Canadian industry. This

program, in essence, aims at optimum mutual utilization of the Canadian and U.S. defence industrial capability. Arrangements include providing equal opportunity for Canadian industry to participate with U.S. industry on the competitive bases of price, delivery and technical competence to meet North American defence requirements.
Sustained effort in the past four years by both governments and their defence industries has resulted in such major achievements as the exemption of certain Canadian defence material under the provisions of the buy American act, the duty free entry of such material into the United States, and increasing response of Canadian industry to United States defence procurement opportunities. Defence development and production sharing ramifications have become widespread throughout Canadian industry, and a large proportion of Canadian research and development capability is oriented towards United States and mutual defence requirements.
In terms of Canadian industrial activity generated by the program, the total of United States defence production sharing business placed with Canadian companies in the 4| years to the end of June 1963, amounted to about $657 million. For the last full calendar year, 1962, this business totalled about $254 million. This was a 75 per cent increase over 1961, due largely to contracts for Caribou aircraft and a contribution by the United States to the joint Canada-U.S. F104G aircraft program. On the other hand, Canadian defence production sharing business in the United States amounted to some $127 million in 1962. The total for the 4J years of the program is about $574 million. While the balance of production sharing business between Canada and the United States had been some $47 million in favour of the United States at the beginning of 1962, it had at least temporarily reversed by the end of June, 1963, to about $83 million in Canada's favour. This achievement of mutually advantageous reciprocal procurement I consider to be very worth while indeed. Over 300 Canadian companies have received contracts since this program began, and the achievements of some of these companies is a clear indication that participation in the United States defence market is of outstanding benefit. I feel that Canadian industry deserves great credit for its efforts in this regard.
Both the Canadian and United States governments have recognized that Canada's ability to participate in future defence industrial production programs would be lost without continuing research and development projects in Canada, and the future role of Canadian defence industry would therefore be confined to the production of the more
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simple items of hardware. As a consequence, our ability to contribute to equipment programs for the defence of North America would be seriously weakened. Since 1959 substantial sums have been provided to assist Canadian companies to undertake development projects for both United States and other allied programs. As a result, a significant amount of research and development work has been stimulated in Canadian industry. Since 1959 to the end of August, 1963, a total of some 130 development sharing projects valued at about $76 million have been initiated in Canadian industry with funding support from the government, Canadian industry and other governments. Of this total, Canadian government support from vote 25 amounts to $32 million. Clearly there is now a greatly increased awareness in Canadian industry of the need to undertake research and development activities. To further reinforce this development sharing activity the United States secretary of defence and I have this month signed a memorandum of understanding in the field of co-operative development between our two departments.
My department's efforts in the development field are co-ordinated with the defence industrial research program which was initiated in 1961 by the defence research board. This program represents another step forward in our efforts to maintain Canadian scientific skills, and to ensure that the results of government defence research are made available to Canadian industry so that our industry can participate more effectively in the development and supply of defence equipments needed by the United States and other allies.
In concluding my remarks on production and development sharing, I want to emphasize the importance that is attached to this program of co-operation by ourselves and by the United States government. I refer to my report to the house on June 7, following my meeting with the United States secretary of defence, when I said in part:
Our meeting was held in a spirit of great cordiality and reaffirmed positively the intention of both our countries to continue to support a defence production sharing program. Assurances were given that the difficulties experienced by both countries in respect of balance of payments problems should not be allowed to interfere with the continuation and enlargement of this program-
The maintenance of a general balance of our reciprocal cross-border procurement of equipment seems the best answer to concern at the drain on foreign exchange reserves through such procurement.
For the future, as in the past, Canada expects to procure from United States defence industry those items which it does not make economic sense to try to produce in Canada. In return we look to continuing opportunities for Canadian industry to supply United States defence requirements where Canadian companies can compete on the basis of price, quality and delivery.

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I should now like-


Douglas Mason Fisher: May I ask the minister a question, Mr. Chairman? Will the minister have any time in the course of his remarks to speak to a program such as the Bobcat or our aircraft production, in terms of the difficulties of obtaining any defence sharing arrangement with the United States, so that they take some of our goods?


Herbert Wilfred Herridge: We want to hear about the Port Arthur bobcat.


Charles Mills (Bud) Drury: It was not my intention, Mr. Chairman, to cover those particular topics in these general remarks; but if there is interest in them, I will be very glad to report later on. I should now like to review the departmental role in the NATO program of co-operation in research, development and production and in the field of overseas defence export activity generally.
Unilateral weapon development is gradually becoming a thing of the past in most countries and this trend has a particular and critical significance for Canada. Our defence industrial planning must, therefore, to an increasing degree take into consideration foreign as well as Canadian military requirements and must be harmonized with defence development and production plans of NATO and other allied countries. Today, more than ever before, national efforts to participate in defence production programs of other countries are being intensified and international collaboration in defence research, development and production is possible only where appropriate government to government arrangements are established within which sales activity on the part of industry can achieve positive results. The primary role for government in this field is, therefore, development of bilateral, trilateral or multilateral arrangements based on specific areas of national technical capability which can be utilized to meet common requirements.
In planning the current re-organization of the department, careful attention has been given to the establishment of a management group which can provide effective central direction of our over-all department defence export activities as they relate to United States and other NATO and allied countries. While the Canadian Commercial Corporation has played a valuable part in these departmental activities, its function has been gradually assumed over the years by the Department of Defence Production. Complete integration of the working staff of this crown corporation into the department has now become essential. Accordingly, arrangements are in hand toward implementation of the recommendation of the royal commission on government, organization that management

and staff for activities of the corporation be provided by the Department of Defence Production.
A new international programs branch is being established to consolidate these activities of the Canadian Commercial Corporation with the staff co-ordination work of our United States and overseas divisions and thus to provide effective guidance and control of all of these elements of our departmental defence export activities within a single branch.
My department is responsible for co-ordination of Canadian activities within the NATO program of co-operation in defence research, development and production and provides the Canadian representative on the NATO armaments committee which administers the program. Arrangements are now in hand for strengthening this representation.
Canada has submitted for consideration by NATO groups a number of projects in the aircraft, armament and electronics fields. Canadian aircraft and electronics firms have submitted design proposals in response to specific NATO requests. There has been a broadening of the exchange of information on national research, development and production programs. As a concrete result of our active participation in the NATO armaments committee, and on the invitation of Canada and the United States, four other NATO countries are participating in a cooperative research and development program on a counter mortar radar being developed by a Canadian firm. A Canadian-Norwegian plan for joint production of our combined requirements of the M72 light anti-tank rocket has been approved as a NATO program. Other NATO countries have been invited to consider participation in the Canada-United Kingdom joint development of a short range surveillance system using an unmanned aerial vehicle known as the CL-89.
May I restate the responsibilities of the Minister of Defence Production as being, first, to procure the goods and services required by the Department of National Defence and, second, to ensure that the necessary production capacity is available in Canada to support our defence production program. These responsibilities form the basis for our over-all departmental defence export activities which include the defence development and production sharing program with the United States, armament co-operation within NATO, and bilateral defence production arrangements with NATO and other allied countries.
The increasing tendency toward complexity and high cost in weapon development and production make it essential that every avenue of co-operation with our allies be explored

in efforts to make the most effective use of our respective national resources in terms of funds, manpower and technological capabilities. At the same time we cannot overlook the benefit to the Canadian economy of performance in Canada to the greatest extent possible of the research, development and production associated with advanced weapon technology.
There are two additional matters which already have been of great importance to the Department of Defence Production and which will no doubt be of even greater significance in the future. These are, first, the recommendations of the royal commission on government organization and, second, the establishment of the new Department of Industry.
The royal commission on government organization, better known as the Glassco commission, included in its report the following recommendations, in addition to that already mentioned in respect of the Canadian Commercial Corporation:
That a central purchasing agency be established to serve all departments and agencies, both civil and military, of the federal government other than commercially oriented crown corporations.
That the Department of Defence Production be renamed the department of purchasing and supply and its responsibility be extended to include procurement for civilian departments and agencies.
That the new department of purchasing and supply be given the responsibility in conjunction with user departments and agencies for developing standard specifications for all appropriate items.
That the department of purchasing and supply develop warehousing, stocking and materials handling services across Canada for all departments other than the Department of National Defence and that a traffic advisory group be established within the new department with the responsibility of improving traffic management throughout the public service.
These and other recommendations of the Glassco commission, with the exception of the renaming of the department, have been adopted by the government, and the Department of Defence Production is now making plans for the implementation of such recommendations.
Among the other recommendations of the Glassco commission was also one which advocated the division of the department of public printing and stationery into two independent units, one to be absorbed by the proposed central purchasing agency which I have just mentioned and the other to be headed by a queen's publisher.
The government has chosen this recommendation as one of the first to be implemented and since August 21 the control of the procurement, purchasing and stores branch, the production branch and certain other of the branches of the department of
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public printing and stationery has been the responsibility of the Department of Defence Production.
The queen's printer is directly responsible to me in my capacity as Minister of Industry for the publication and distribution of government documents. I consider these changes to be a significant move in line with the recommendations of the royal commission.
The proposed role of the queen's publisher involves questions of some technical complexity as well as considerations of a policy nature. This matter is now under consideration.
I should now like to outline a few of the considerations relating to the national research council. The functions of the national research council cover four broad areas:
1.	To advise the government on the position of science as a whole;
2.	To promote and encourage research in the universities;
3.	To operate a system of laboratories directed toward fundamental science and toward applied science in fields which fall outside the specific responsibilities of other government departments and agencies;
4.	To promote research in industry through the industrial research assistance program, and to give assistance through the technical information service.
In order to keep pace with its increasing responsibilities, the council has developed a continually expanding group of committees for the purpose of co-ordinating research and the various aspects of technology. At the present time the membership of such committees is approximately 3,400, drawn from the national research council itself, other federal government organizations, provincial organizations, Canadian industries and universities. This committee structure has had a most important effect on Canadian scientific co-ordination. With the expansion of research in industry it becomes particularly important to co-ordinate research undertaken by various organizations, and to make certain that all interested parties are aware of what others are doing, in so far as this may be feasible without interfering with commercial secrecy or competitive advantage.
The research council is also actively concerned with international science and, particularly in recent times, this has begun to impinge more extensively on international affairs than formerly. There are two aspects of international science: First, the benefit which Canada can obtain through her contacts with other scientific groups and, second, the co-operation which can be extended in large international undertakings such as the international geophysical year, the year of the quiet sun, the coming hydrologic decade, all

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of which have yielded and will continue to yield important and useful results to all participating countries and indeed to the whole world.
To meet its obligations to foster research in Canadian universities increased expenditure will be necessary, and this can be expected to increase steadily for the foreseeable future. The graduate student population of the universities is increasing about 20 per cent per annum, and since a significant percentage of national research council grants supports these students, directly or indirectly, and since science is becoming more and more complex, requiring more expensive instrumentation, an increase of a minimum of 20 per cent is necessary merely to maintain the same level of research as that of the past fiscal year. The N.R.C. grants give university staff members an opportunity to pursue their research and to inspire an increasing number of students to proceed to advanced studies. Canada enjoys a high reputation in world science despite the fact that her expenditure on civilian science is low compared with that of most other advanced nations. In a world in which science plays a dominant role research will need increasing support if Canada is to achieve a competitive position.
The medical research council is continuing to operate as an autonomous body within the administrative framework of the national research council. It is the primary aim of the medical research council to promote the broad field of medical research in Canadian universities and their affiliated hospitals and institutes. It provides grants in aid of research projects carried out by established investigators, and as well personnel support in the form of associateships for highly qualified research workers, and fellowships for young doctors wishing to advance their research training and to provide the essential personnel for an expanding medical research program so essential for our welfare.
Increasing demands have been made on the N.R.C. applied laboratories for the benefit of Canadian industry, and over the past years the laboratories have been of assistance to many segments of industry, including the aircraft, construction, chemical, electronics and food industries, and further facilities are necessary to meet some of the demands. A new supersonic wind tunnel is nearing completion and will provide an additional facility for the aircraft industry.
The national research council library provides an important service to all segments of Canadian science, and it is being used extensively by universities and industry, and has been recognized as the major science library of Canada.

With respect to industry, the research council devotes its attention mainly to secondary industry, since the primary industries are assisted to a large extent by other government department and agencies, for example, the Department of Mines and Technical Surveys, the Department of Agriculture, the Department of Forestry and the Department of Fisheries.
In the previous fiscal year, the council undertook a program to assist research in industry. This program was in effect during the latter part of the fiscal year only, but the projects initiated will, in practically all cases, be continued for the full current fiscal year. As a result of this the new applications anticipated, a substantial increase in the vote is necessary if the program is to be continued at an effective level.


Gordon Minto Churchill: Mr. Chairman, I do not intend to speak at length at this particular stage of the discussion of the estimates, but from considerable experience in the House of Commons I realize that it is necessary to record dissent at certain times; otherwise later on someone will rise and say that no one objected to a certain course of action, and we will be pursuing the matter again. Therefore I now record my dissent to this method of dealing with a large number of estimates under the Department of Industry. I understand the circumstances which have brought this about, but I want to make it clear that in the next session of parliament we would ask for the estimates under this minister to be taken in a different way. Rather than have a comprehensive statement by the minister covering the five or six areas for which he is responsible, we would prefer to revert to the practice which has prevailed in the past of taking these matters separately, so that debate on each area of responsibility is related directly to the estimates under consideration. We are in some difficulty here tonight. Various hon. members may wish to speak on any one of these half dozen items and we may get the debate rather mixed up, just as the minister's statement was a cumulative effort.
The reason we are going to be helpful to the minister is simply because we know that on interim supply which was in front of us today, the government is requesting money for the ninth month in the fiscal year. In other words, three quarters of the total amount of money required to operate government institutions and efforts will be voted by the house through the method of interim supply. It is rather pointless then to deal with the estimates item by item, scrutinizing every single dollar of expenditure, when nine twelfths already has been expended.

The other consideration is that as a responsible official opposition we are interested in bringing this session to a close before the Christmas recess. We are not taking the attitude or the stand which was taken by the irresponsible official opposition of last year which refused to pass a single estimate of the estimates which were placed before it. So in that co-operative mood, all I am doing now is making sure that our position in the next session will not be misunderstood, and we would ask at that time that the Minister of Industry deal with his estimates for the Department of Industry and let the house comment on them, then move on to defence production with appropriate comments, and then the other items which he has under his authority.
Let me say I fully appreciate his difficulties. He has so many departments or crown companies to supervise that he is a thoroughly overburdened minister of the crown. I went through that myself, Mr. Chairman, with the duties of atomic energy, national research council, medical research council, at one time Eldorado, over and above the Department of Trade and Commerce. Superimposed on that were my government house leader duties, and I have forgotten what other problems were shifted to my shoulders. So I sympathize with this minister who has obviously become the workhorse of the present Liberal government.
So far as the Department of Industry is concerned, the estimates there are the only ones which are new, brought in by way of a supplementary estimate. We presented in this house our objection to the setting up of that Department of Industry. We had rather an extensive debate on it at the time, and we are still not very happy with regard to that arrangement. A very prominent businessman suggested to one of my colleagues the other day that the minute we again resume office -and he is a Liberal and anticipates this event-we should abolish the Department of Industry and put the field it encompasses back where it belongs, under the Department of Trade and Commerce; so we will take that under advisement.
As I say, some of our members will be speaking about the Department of Industry. I thought the minister should have continued immediately with defence production when he had finished with his department, but he interposed the atomic energy field between those two and then came along with national research. It is unfortunate to mix them up like this. If I get the opportunity later this evening, I may have something to say with regard to atomic energy and national research, and I will particularly ask the minister
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some questions with regard to those fields of activity. With regard to the medical research council, he might as well have ready an answer to the question whether or not he is going to bring in legislation next session concerning the council, because that was one of the plans we had under way. We have been given a mixed bag to deal with. I do not intend at this stage to talk about these things seriatim. I merely indicate and record permanently on record in Hansard my dissent from this method of dealing with these estimates.


Douglas Mason Fisher: There are a number of items with which I could deal this evening but I imagine I shall only have time to consider one or two of them. I know my colleagues are anxious to discuss a number of topics and I am sure we shall have the minister before us for some time. I do not know whether he should be congratulated or not for bringing such a large bevy of officials with him. It is embarrassing to us to see those packed benches in one place and the scarcity in another.


Gordon Minto Churchill: There are 15 on that side. They are outnumbered by the officials.


Douglas Mason Fisher: Some remarks have been made about the loyalty of the civil service. Now we can see it.
The subjects of the Department of Industry have been debated so much this session that it is difficult to find anything new and relevant to say, but I would draw the attention of the committee to something which happened in my own area-something which I thought was bound to happen. There is now a concerted effort by the industrial and municipal groups in our area to be classified as a designated area, despite the fact that the formula, about which I have complained earlier, will not qualify the area to become so designated, at least not for several more years when conditions have got a great deal worse than they are now. The Minister of Finance told us a few weeks ago that certain adjustments to this formula were being considered and that more variables would be taken into account. I would like to have been given more information about this. I read the text of the speech the minister made last Friday and I do not recall he had anything to say about this aspect of the matter. I am sure there are other places, in addition to northwest Ontario which are beginning to stew about this question. The gist of the request is: why cannot we share in these advantages which are to come from the establishment of the Department of Industry and the tax concessions which are to be made? Advertisements for personnel to staff

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the department have appeared in papers across the country. I know, having gone through the newspapers in the reading room, that a considerable bill for advertising has been incurred. I have seen at least five or six editorials in small papers commenting on these advertisements, the salaries offered, the qualifications desired, and so on.
To my mind, a certain puzzlement has arisen, one which the pamphlet which has been published cannot answer. How are these officials to work, and what administrative framework is to be set up? I know the deputy minister has been making speeches in various places, because I have seen the reports. I know the minister has commented on the reaction of Manitoba to the Department of Industry. I do not know how much truth there is in this, but I hear there was a blowup or at least some criticism expressed at the federal-provincial conference on the subject of the department after the minister had made his explanation. I understand the minister had a pitched battle in one of the corridors with Mr. Eric Kierans of the province of Quebec. That is just tittle-tattle, but I am sure of this: The Department of Industry and its policies have been the subject of discussion and explanation while the provincial ministers have been down here. I think we should be brought up to date as to those discussions and be told what response the minister received. I assume, since he has not been here in the house so much this week, that he has been attending the conference and, knowing him, I assume he has not been sitting there like a dummy without making any contribution.
Like many other people, the minister must, I am sure, realize that his new Department of Industry is in a somewhat precarious position in terms of general acceptance, or in terms of popularity, and the sooner its function is clarified and popularized, the sooner we see some evidence of people out in the field working with the local regional development groups, the more quickly will it be able to perform those tasks which we can expect it to perform. With regard to what was said by the hon. member for Winnipeg South Centre to the effect that if and when the Conservatives came back to power they would abolish the department, I am sure we were reminded of what Ross Thatcher was going to do about medicare. If the department gets running and functioning well, we shall not have to worry about any subsequent government destroying it.
The main question asked in my region and by the people I encountered in Manitoba and southwestern Ontario about the Department of Industry is a simple one: How is it going to work with the provincial groups

which are already in existence; how much flexibility will there be in this relationship? The main problem seems to be this: Who will take the lead? We all know the steps which have been taken by Manitoba and I am sure we shall hear more about them, because I see the hon. member for Marquette is there with that massive volume about Manitoba's plan between 1962 and 1975. What is to be done in Ontario? What is to be the relationship with the regional development councils and the development associations in the various provinces? When are we to be given some idea as to the degree of initiative which is to come from the provinces and from the federal government in terms of projects. This is important.
We saw what I think was the best piece of legislation passed by the former government, that is, the ARDA legislation, lying on the counter for a long time before it was picked up. There was, and still is, a great deal of confusion in many parts of the country about what could be done with ARDA. There was uncertainty about its implementation. I know a period of more than two years passed in Ontario before Mr. H. F. Crown was appointed by the provincial government, and a response was forthcoming from the province. It is still not certain, as far as ARDA is concerned, whether the initiative should come from regional groups or from the provinces, or whether it is for the federal government to take the initiative. Indeed, I am confident, from what I know of ARDA operations, that all those concerned are still hazy about it. I suggest to the minister that he will not be able to afford the maturity period which ARDA has been allowed. I say this because I think the pressures in this area, where employment is concerned, are much sharper in the case of the new department. This is why I would have appreciated-I will not say "more candour", because it is not easy to see how there could be much more candour when there is nothing to be candid about-but I would have appreciated more detail about how the process of building up the department is going on. How many men has the minister hired? What is their quality? Where did he stand in the competition? Where are the advisory offices to be established? What research assistance is to be available to the outer offices?
Information of this kind would be important and useful. It would have a definite bearing on the department's future. I know the deputy minister has been speaking about this in Ottawa but the reports are in general terms. I think some of this information might be given in greater detail during this debate.
The next thing I wanted to touch on is something that is dear to my heart, as the minister knows, and that is the question of

government printing and publishing. It has always been my suspicion since I arrived in Ottawa some years ago that this is one of the least efficient operations of the government. Most of us remember the reckless doings of the public accounts committee a few years ago when they were turning up trout streams in the basement of the establishment in Hull, and we had all kinds of cynicism and bitter wit about the place. Subsequently, we had a change in the headship over there and things quieted down considerably.
It seems to me, as a matter of principle, that there needs to be an element of contract letting in so far as printing is concerned. I am speaking for my party here when I say that we are not so much dedicated to the socialistic idea that we want to see all the printing done for the federal government-particularly I am thinking of text print-handled by the queen's printer. I can see the advantages of a balance, but I can also see the possibility of patronage and pettiness in so far as the letting of contracts is concerned. I know from my personal knowledge that there was one magazine put out for the Canadian army, and as soon as the government changed a few years ago, slam bang, the printing contract was shifted to someone favourable to the party in power. We may have an element of this; but forgetting that sort of thing it seems to me that what we have to look for in that kind of contracting is the absolute in competition, with favouritism ruled out. I am not so sure that we have it. I should like more details on how this print purchasing is going to be carried out, to be sure that under the reforms the minister is introducing we will have this as a guarantee.
The next point in connection with the queen's printer's operations relates to something that has exercised me for six years, and that is the fact that all of these small contracts for materials and goods that I think run to something like $18 million a year, have always been concentrated in this particular area, that is in the Ottawa-Montreal-Toronto triangle. There has not been nearly enough dispersal out across the country. We have had suggestions of this over the past years which showed, particularly in 1960-61, that there was an attempt made to spread these orders out. Almost anywhere I have gone across Canada the printers, suppliers of forms and so on, even in the smallest towns, feel they could compete or should have the right to bid on this kind of order. Yet, in fact, the small orders which these people could fill seem to be given to a very select group in this particular triangle. I
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should like to bring this to the minister's attention in the hope that it will be his aim to improve the situation. I do not believe the Glassco report makes the situation clear as to whether more purchasing in this category could be made in the provinces beyond Ontario and Quebec.
The minister will also be aware from some of the questions which I placed, and which he answered, that there is a tremendous amount of initiative put in the hands of the man who is in charge of this kind of purchasing. It is the kind of initiative that has to be handled with scrupulous fairness. There is too much power, in a sense, placed in the hands of someone purchasing that much in the way of supplies in a year, unless the rules and the code are very strict. In time, the man at the top of the organization has the right, which is exercised and I think the minister will concede that it has been exercised to a considerable extent, to change orders, to change the number of competitors, to call for new bids or to have telephone calls go out to get quotations from the select people. You have here the opportunity for corruption and unfairness.
I think that if the minister could say that under the new procedures that are going to be developed under the Department of Defence Production this situation will be taken care of, I will be pleased and I know several other members in this house who will be pleased. This particular community of Ottawa and Hull is a great place to generate rumours and suspicions. I do not want to go into the information that has been brought to me. I am willing to accept the minister's integrity in this matter, but I should like to have along with that general assurance something of the details that are planned for this kind of purchasing.
Then, I should like to point out to the minister that there is a bit of discrepancy in some of the answers that were given to me. I will just give him an example. I should like to refer to question No. 1,286, on page 3623 of Hansard for October 16, 1963, which reads in part as follows:
Has Mr. Roger Duhamel, the queen's printer, been offered the proposed post of queen's publisher and, if so, (a) has he accepted (b) will his salary remain unchanged (c) what are his major responsibilities (d) to whom is he immediately responsible, and (e) on what date did he first act in an acting capacity?
The answer given by the minister is as follows:
The creation of the proposed post of queen's publisher and the related changes in legislation are still under consideration.

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Well, the minister will concede that there have been purchases made under this new arrangement in the name of this so-called queen's publisher.


Charles Mills (Bud) Drury: Queen's printer.


Douglas Mason Fisher: No, the queen's publisher. In addition, there was this answer which reads:
As a result of P.C. 1963-1254 of August 21, 1963, and P.C. 1963-1450 of October 3, 1963, his major responsibilities are the sale of publications for both houses of parliament and departments of the government of Canada, and include the procurement of print for these publications. He reports to the Minister of Industry.
Then, the answer to the next question was as follows:
The creation of the proposed post of queen's publisher and related duties is under consideration. For current duties see answer to question 1,286.
Then you turn to page 3807 of Hansard, question No. 1,295, which reads as follows:
How many (a) printing job tenders for print requisitions by government agencies have been issued (b) contracts have been awarded, since the day on which procurement, purchasing and stores branch became a responsibility of the Department of Defence Production and, of these (i) how many tenders have been issued and how many contracts have been awarded by the procurement, purchasing and stores branch as a responsibility of the Department of Defence Production, and (ii) how many tenders have been issued, and how many contracts have been awarded by the proposed office of queen's publisher?
The answer to part (ii) shows that 23 tenders have been called and 16 contracts awarded. In other words, the proposed office of queen's publisher is actually functioning, according to the answer. This is a matter of genuine puzzlement. What is the authority-


Charles Mills (Bud) Drury: If I may answer the hon. member right now, the office of queen's publisher has not been established. The functions of the queen's printer have been divided into two, one of which involves the mechanical operation of printing and the procurement of stationery and supplies. This has all been assumed by and put directly under the Department of Defence Production. The queen's printer, in relation to his proposed functions, or functions suggested by the royal commission on reorganization, is to become the queen's publisher, and is in fact performing now these more specialized duties, of rather more than an editorial nature than the previous mechanical ones were, but the title has not yet been approved. The title has not been assumed and if inadvertently-and 1 suggest it was inadvertently-the answer was given that the queen's publisher had done something, it was taken to mean the queen's printer had done it in his new capacity.


Douglas Mason Fisher: Well, we will be interested and looking forward to the appointment of

the queen's publisher, and the definition of his duties, when that develops.
I have mentioned the Bobcat to the minister. I remember it was four and a half years ago when Fort William was dreaming of getting an actual contract for the Bobcat, and at that time the development contract for it was with the Canadian Car Company in Montreal. I remember attending on a delegation here which was met by the Hon. Howard Green, and I remember the deputy minister being asked point blank by Mr. Green how long it would be before the contract would be ready for awarding, that is, when the decision would be made that the Bobcat was worth producing.
As I remember it, the deputy minister took some care in answering, because I imagine this is not the kind of thing a person likes to get on the line for; but there was further insistence and he then came up with the figure of 18 months. In other words, approximately three years ago the thing should have been ready to go out to contract, but the defence committee apparently has been told there are still bugs in the Bobcat, and this is three years after the estimate made by the deputy minister.
Through all the years since then there has been an item in the estimates for the development work, but there must be something badly wrong or haywire about the situation, about the kind of ineffective leadership coming from the department, particularly when something fumbles and bumbles along like this. I know the one conclusion I draw from a defence point of view is that much of our defence posture is nonsense, because obviously if we can afford to fritter away years like that before we get an armoured carrier, we really don't care a damn whether we get an armoured carrier or not.
My point is that the minister needs to give some explanation of how this could take place under an efficient department. It does not make sense to me that four and a half years ago we got an undertaking it would be ready for contract in 18 months, and there was an indication given that favourable consideration would be given to Fort William. In fact I remember the headlines in the Fort William and Port Arthur press saying, "We are going to get 400 Bobcats to build in a year and a half." It has now become less than a joke; it is just a wry irony.
How can this take place under any kind of efficient direction by a government department? Has part of the stalling been that the government has been trying to get cooperation with some of our NATO allies on this matter? I know that the other day the Minister of Defence Production sent me a photograph of the Bobcat, with some British

officers looking at it. I suppose there has never been an armoured vehicle looked at and examined so much as the Bobcat, but ten years after it was first talked about we still have not got anything except a nice bill.
One of my colleagues tells me the United States and United Kingdom now have their own vehicles. I do not know about that, but it is quite obvious they do not go for the Canadian vehicle. It also seems to me there is no use trying to fasten it in any political sense on the former Liberal government or the former Conservative government. There is just something completely haywire, and it is this kind of thing which makes one wonder how good is the Department of Defence Production.
I have my own specific case in connection with the Department of Defence Production which I would like to go into tonight, but since it is still under review I will not. It relates to a contract in my own area, which convinces me this is not the greatest of departments; but this Bobcat business is just unbelievable. For 10 years we have been fiddling around trying to get an armoured carrier for Canadian troops, and the latest results show it is still not worth very much. I am not surprised that the Americans and British are not anxious to take up any of our creations, inventions or developments, if this is the pattern.
We have never had a clear explanation of it, and I think the minister should tell us about it. We have spent millions of dollars on the development program. I am sure it supplied work, though not very much because there are only about 20 prototypes, but a lot was spent on materials, and it made work for engineers and a small staff in the Canadian Car Company in Montreal. Surely we should have some explanation from the minister before his estimates are passed.
It also seems to me that the minister should tell us more about the aircraft problems we have-that is, the problems of selling our aircraft to some of our allies under the defence program. It is quite apparent that the CL-44 is a successful aircraft, but it has not yet met with great purchasing responses by other countries for defence purposes. I would like to know the reason for this, particularly with regard to that aircraft, because greater production of it would do something for Montreal, which has been bleating so much over the DC-9, and also particularly because of the fact that an adaptation of it was taken for our air force, and I understand is in use.
We need to know more about the responsibility of the department in helping to get sales contracts for that particular aircraft, and I would like to know something about
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whatever funds the department may have contributed in connection with the cushion aircraft-you know, the flying saucer type, and also in connection with the hydrofoils, I would like to know if there is any program under which the Department of Defence Production is contributing money for research services and development. I understand we have been experimenting with hydrofoils ever since Casey Baldwin was fooling around with one in Nova Scotia 30 years ago; but if the same pattern prevails as with the Bobcat, I can see us still fiddling around with hydrofoils in 2000 A.D.
The next point I want to touch on is related to the national research council and the role that it plays as the encourager or the leader in the field of science. I have a paper here by W. P. Thompson entitled "The number of university teachers: needs and prospects". Dr. Thompson was formerly the head of the University of Saskatchewan and was the author of a book called "Graduate education in the sciences in Canadian universities" published by the University of Toronto Press in 1963. This paper is for publication in the December issue of the Canadian Association of University Teachers Bulletin. I do not want to put a great deal of it on the record, but in substance Dean Thompson is telling us that our graduate program-that is, the program to produce graduates, particularly with Ph.D's-in the social sciences and the humanities is in a hopeless position. It is just fantastic that a country with this many people in universities should be turning out so few graduates in these fields. There is in this paper a table of the number of theses accepted for doctorate in different subjects in different Canadian universities in 1960-61. One of the interesting things is that in the sciences we have 151 theses accepted; in medicine, agriculture and engineering-which is another type of science -we have 53. But when we get into the social subjects we have a total of only 68. When we get into the humanities we have a total of only 51.
This is not the place to make an argument for the social sciences and the humanities, but I would suggest that even the record in the sciences of only 151 in biology, chemistry, geology, mathematics and physics is a pretty weak effort. The national research council needs even more encouragement than it is getting at the present time in order to broaden this program. I know the minister indicated this was so; but what is the scale of this, what is the imagination, what are we shooting for, how many hundred graduates a year

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can N.R.C. sponsor? This is what we need to know. I wish to quote from page 4 of Dean Thompson's paper:
Disregarding the applied subjects for the moment-
That is, the applied sciences:
-the number of teachers who will be required in the basic sciences in relation to those in the social subjects and humanities cannot be determined accurately by estimating the number of students registered in the different faculties, since students in each type of faculty take varying amounts of work in the other faculties. But a reasonably accurate comparison may be made by comparing the numbers of present faculty members. An examination of the lists of teachers in several universities which have typical establishments of faculties shows that the present numbers of teachers above the level of part time sessional appointees are approximately the same in the basic sciences as in the social subjects and in the humanities (for example, in one institution 7:6:8). Therefore, the number of doctorates actually conferred in the sciences is out of all proportion to those in other areas-three to one instead of one to one.
In this connection it should be pointed out that six of the 13 universities which conferred the doctorate did so only in the sciences, and that two others conferred only one or two doctorates in all the other subjects put together. Apparently only five institutions-
That is institutions in Canada:
-make any serious effort to carry students through the doctorate in the social subjects or humanities. Although only 13 institutions conferred the degree in 1960-61, 15 offer work leading to the degree, but two made no awards in that year. Those two offer the degree only in the sciences.
The reason for the great disproportion cannot be a matter of cost since research and advance teaching in the sciences are much more costly than in other areas, although it must be admitted that more money may be available for scientists from outside sources. Other possible reasons may be suggested for consideration: (1) a difference in the number of suitable fellowships and assistant-ships; (2) an established tradition owing to the greater number and variety of subsequent jobs hitherto available; (3) less interest on the part of many social scientists and humanists than on the part of natural scientists in original scholarly work; (4) less inspiration to their students to proceed to graduate work at the doctoral level. At any rate it appears that the attitude of many scientists must be different from that of many nonscientists and that the difference is recognized in general university policies.
This might be taken as an argument-


The Acting Chairman (Mr. Tardif):: I am
sorry to interrupt the hon. gentleman, but I must advise him that his time has expired.


Douglas Mason Fisher: Mr. Chairman, if the hon. member for Marquette would allow me to have the floor for just a few more minutes, I only have one more paragraph to put on the record. Perhaps the committee would give unanimous consent to my completing my remarks.


Paul Tardif: Does the committee consent to the hon. member completing his remarks?


Some hon. Members:: Agreed.


Douglas Mason Fisher: Thank you, Mr. Chairman. This paper continues:
Even though the doctorates in the natural sciences greatly outnumber those in other areas, it is clear that even they are far short of the need. Mathematics is an especially weak spot with only eight, although mathematicians are in great demand. Moreover, a large percentage of fresh Ph.D.'s in the sciences go into industry, the professions, or government service. Precise information on this point comes from two sources: (1) according to Thompson, the deans of graduate schools estimate that less than 20 per cent of Ph.D.'s in chemistry, 33 per cent in physics, 5 per cent in geology, and 50 per cent in biology join university staffs; (2) Stock and Beaulieu showed that of the science students who received their Ph.D.'s in 1960 and immediately took jobs, only 27 per cent joined university staffs, 23 per cent went into government service, 23 per cent into other occupations in Canada, and 26 per cent into various kinds of employment in other countries. Twenty eight per cent of all science students who received the Ph.D. in that year did not take employment at once but continued their studies at the post-doctoral level.
The evidence Dr. Thompson introduces here suggests that the sciences are in better shape than the social sciences and the humanities in having people capable of university work. I think the N.R.C. deserves a great deal of credit in this regard. Those of us who are not interested so much in the sciences lament that we have not a comparable body-at least, I do not think the Canada Council is yet. But the point is, even this is not very good, and it seems to me that the N.R.C. needs to give even more leadership and opportunities for post-doctoral work and pre-doctoral work, and there should be a more aggressive program, particularly in providing the kind of research projects that will keep that 26 per cent-which I think is a fair average-who go every year to other countries because they can get greater research opportunities in terms of projects and funds. I would ask the minister and the N.R.C. to let us know just how big they are thinking, and I would encourage them to think big in this kind of program.


Mr. Mandziuk:: Mr. Chairman, in taking part in this debate I have no intention of delaying the estimates of the minister. I only wish to put on record some thoughts in connection with the Department of Industry. The minister has so many irons in the fire that it would be futile to attempt to discuss all the matters which fall within his jurisdiction; but the Department of Industry is a subject of wide discussion and criticism across the land. I agree that probably it is practical to put under one roof various activities that are related but in the words of an editorial in the Winnipeg Free Press of October 28 under the heading "A Pretty-Costly Beginning," it states:

Whatever else might be said about the federal government's new Department of Industry, there is no doubt that it is going to Think Big.
Well, it thinks big; it talks big, but whether we will get big results time alone will tell.
The Department of Industry was created by parliament in the same manner as was the case with other legislative enactments that have been passed since this session of parliament opened. The government has the habit of putting the cart before the horse. It leaps before it comes to the stile. It makes a decision and then it decides to consult those who are most vitally concerned.
The province of Manitoba in particular is greatly concerned. That province was not consulted. That province, which has such an efficiently working department of industry, should have been consulted or at least kept aware of what Ottawa intended to do. But the government has acted in the same way as it did with the municipal loan fund and contributory pensions. They put the legislation on the books and then they start to consult. I believe consultation was promised the members of the government of Manitoba at the federal-provincial conference. Whether consultation on this point was carried out, we do not know. However, the Winnipeg Tribune of October 19 has this comment by the premier of Manitoba:
Premier Duff Roblin likened the new Department of Industry to "the pension muddle".
Premier Roblin is disturbed and fears there will be duplication and confusion with regard to industrial surveys which this department will be making, trade missions it may be sending overseas and personnel it may be be hiring. The minister of industry of Manitoba, the Hon. Gurney Evans, is quoted in the same issue of the Winnipeg Tribune as saying:
-the present course "seemed to be one of building two competing empires".
Why is Manitoba disturbed? I should like to bring to the attention of the minister the fact that the government of Manitoba under the leadership of the Hon. Duff Roblin spent three-quarters of a million dollars making an economic survey in that province. The result of that survey is this monumental volume I hold in my hand. I draw it to the attention of the minister and I suggest that those high priced officials who are being sought in this little pamphlet issued by the civil service commission the other day be told to read and study this monumental volume, because it covers every field of economic activity. I want to point out to the minister that it covers Manitoba, an economy in transition, population and manpower, primary industries, secondary manufacturing industries, prime requisites for industrial
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development, tourism, recreational development and accommodation, service industries, physical factors in economic growth, capital requirements and taxation, social factors and economic growth.
This is a most exhaustive study and it will be well worth while for the new Department of Industry to make a thorough study of it and save the thousands and thousands of dollars that would be required to make an economic survey of the province of Manitoba. I do not know what the situation is in other provinces, but as far as Manitoba is concerned this study is most exhaustive. I want to put on record how it came about.
In 1961 the government of the Hon. Duff Roblin realized that job opportunities were not keeping up with the number of candidates in the labour field. There were more workers than there were jobs. Consequently the government budgeted three quarters of a million dollars to start a survey. They initiated a committee on Manitoba's economic future consisting of 42 members. They hired consultants from various parts of Canada and the United States and 200 public spirited citizens of the province also banded together voluntarily to help to make this great survey of the whole province. The recommendations contained herein were made by representatives of labour, primary producers, educationists, professional men and government officials. In this volume the minister will find how to increase job opportunities at least in the province of Manitoba, if in no other.
I wish to return to the comments in the Free Press, the mouthpiece of the Liberal party in Manitoba. In the issue of October 28 last there is an editorial which indicates that the Free Press is greatly disturbed. It points out that 300 top jobs are being created and that the civil service commission is carrying on a recruitment program and offering top salaries from $12,000 to $17,000 a year. Premier Roblin is quite disturbed by the fact that many of those working in the Manitoba department of industry may be enticed to join the federal Department of Industry because of the salaries being offered. There was no consultation even on that point.
This same Free Press editorial questions what industrial activities will be launched by virtue of the establishment of the Department of Industry and the employment of around 300 top level people. What new industrial activities are going to be launched to justify the establishment of this department? I think the minister should be given the opportunity to answer that question when he replies, so as to alleviate the anxiety that some people, even those who support his party, feel about the whole matter.

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The editorial in the Free Press goes on to say that the Department of Industry will have to create $100 million in new investment each year to justify its existence. Was any thought ever given to that? I should like to quote the last paragraph of the editorial:
The first 300 executives, however, are only the start. The department hopes to double that number in time. All in all, the new men of the Department of Industry are going to have to produce some pretty substantial results to earn their keep. Canadians who, heaven knows, recognize the need for industrial development will wish them luck but also hope that the government in its enthusiasm does not forget its obligation to make offsetting economies elsewhere in the public service.
I submit this for consideration by the minister. I hope he gives us some answers as to the new field of endeavour he intends to enter with this army of personnel being advertised for at high salaries. I, like everyone else, have been very interested in this pamphlet entitled "Department of Industry" issued by the civil service commission. It sets out the qualifications required of various officials. In particular it refers to the department's functions and organizations. I was interested in its responsibilities at the management level. It first of all refers to the establishment and maintenance of liaison with industries, and the acquisition of information covering all aspects of their activities. I take it that the department intends to establish liaison, not only with large industries which are established in the east in Ontario and Quebec, but also with small industries established out west. The pamphlet says:
-to plan, conduct and implement comprehensive studies.. .to provide advice and assistance in the establishment of new manufacturing facilities and in the growth and improvement of those already in existence.
In this connection I have another question for the minister: Is he going to give any attention to industries already in existence, large or small? I have in mind industries such as have been established in Minnedosa, at Carberry, at Sprague, and other places, through the effects of this active Manitoba department of industry.
I am also particularly interested in an industry in my own riding. Minnedosa is a small town, as small towns are measured in the east. It is in an agricultural area and has about 3,000 population. It found itself in difficulty several years ago owing to the fact that the repair shops of the C.P.R. in the town were closed down. Some enterprising citizens made a survey of the possibilities of finding employment and a company was organized called Minn-Toba Industries, Ltd. As a result of the survey they decided to manufacture tractor and combine cabs-

everyone connected with agriculture knows what they are-and short-line farm equipment. This company has organized and was assisted by the industrial development board of Manitoba, some $10 million being set aside by the board, for cases like this, to assist small industries setting themselves up. They started to manufacture these implements in 1961 and employed as many as 52 men. That, of course, means 52 wives, and if you multiply that by three it means the feeding of 250 people.
These tractor and combine cabs proved to be of superior design to, and better workmanship than, those brought in from the United States. As a result of the survey it was discovered that there was a tariff against United States imports of tractor and combine cabs. Once this company was nicely established a network of distributorships was set up and the company carried on on a straight business basis. Then bang, the tariff on United States tractor and combine cabs was removed. When this company Minn-Toba Industries Ltd., set out to see what business they could get in the United States, they found that the tariff against Canadian-manufactured tractor and combine cabs was 20 per cent. This particular industry employed last April 52 men. By August this number was cut to half, production of these cabs cut to one-third, and all because United States manufactured cabs are imported duty free by our large implement companies in Ontario. They give distribution discounts and are knocking this little industry, which meant so much to that town, out of existence.
My suggestion is this. If the Minister of Industry intends to justify his position and that of his officials, he may have to co-operate with the Minister of National Revenue and the Minister of Finance to this extent. We are asking-probably there are other small industries in Canada who are in the same plight also-that we clamp a tariff duty on United States imports, a like duty of 20 per cent, taking the matter up with the tariff board or the powers that be, or else asking the United States to remove the tariff on our tractor and combine cabs so that they can enter the United States and compete with the United States product.
All that we and our industries want is fair play. If the Department of Industry is going to direct its activities toward helping even the small industries, I say it justifies its existence. But it should explain at once what it intends to do so as to allay any fears which may be in the minds of provincial governments, and so on. I do not blame the minister for not consulting other provincial governments on this score because he is only

one member of the government. As I said in my introductory remarks, the government decides first of all to pass legislation, and then secondly enter into consultation. I hope the minister and his department will cooperate in this regard. When public money has already been spent let us take advantage of it. I repeat that I hope the minister sets his personnel the task of studying this large report, which is bigger than a family bible, consisting of hundreds of pages. It is in great detail and is worthy of consideration. But do not forget the small industries. If the minister's colleagues co-operate with him to see that our little industries get fair play, that is all I am asking tonight.


Mr.   Cole@Chicoutimi: Mr. Chairman, before I make my speech, it is my painful task to announce that an awful air tragedy has just happened. A T.C.A. airliner carrying 111 passengers and a crew of 7 has just crashed 20 miles out of Montreal. News of that terrible accident has just come in and I wanted to communicate the information to the house.
Now, Mr. Chairman, since we are considering the estimates of the Department of Industry, I should like to express the views of the Social Credit party on that subject.
First of all, I take the liberty to congratulate very warmly the minister who was chosen to fill that post. He is perfectly bilingual, has a great experience in administrative matters and is highly qualified in industry and business. I feel also that the Minister of Industry (Mr. Drury) is able to direct his department masterfully. However, knowing the government's good intentions, in words at least, with regard to bilingualism, I was very surprised to notice that out of 14 officials appointed to his department to date, only two have French names and I am asking myself: Are all the high officials bilingual?
When creating this new department, the government had a unique occasion to show publicly to Canada that it is serious about bilingualism.
Mr. Chairman, the function of the Department of Industry is no doubt to work closely with the provinces, the municipalities and the area industrial promotion organizations, etc., in order to promote and facilitate the creation of new processing industries throughout Canada and particularly in depressed areas.
Canada needs diversified and decentralized manufacturing industries. Industrial concentration is responsible for excessive growth in some areas of the country and pernicious anemia in others. That occasion should be taken to destroy that clever illusion or myth which has been kept alive in public opinion
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those last few years, namely that being far from great consumption centres was for some areas an obstacle to industrial expansion.
In that case, not one industry would be suitably located in relation to domestic and foreign markets. When a company manufactures a product of good quality which can prove useful to the consumer, it will sell anywhere and the geographical location of the industry has nothing to do with it. In proof of this, one only has to look at the shelves in shops and wholesalers' warehouses and check the origin of the great variety of goods, to realize that they come from every part of Canada and from approximately 50 foreign countries with which we transact business regularly.
We should also do away with the fable spread by certain representatives who advocate the merger of medium-sized industries, claiming that only the big industry can survive in our times. Such an attitude can kill resourcefulness and discourage those who are bold and determined enough to set up a business. The survival of industry does not lie in concentration or merger. Those are false arguments inspired by socialism.
Beside large businesses, there is room for the medium and the small industry, that is undertakings in keeping with the abilities of man. To that effect, we should not be afraid to consider new solutions. We should free public capital-governments, municipalities, school boards-to direct them in industrial and commercial investments, in order to ensure an unlimited development of the national economy by establishing a public credit bank which would be a subsidiary of the Bank of Canada.
On the other hand, the industrial development bank should guarantee, after the required authorizations, the issue of industrial and commercial bonds, in order to ensure complete security of private savings from any source whatever, and enable Canadians to regain control of their economy. Moreover, the exchange fund, to facilitate the international exchange of goods and services, should accept in its reserves the monetary units of many countries, that is currencies not convertible into gold, which would result in settling the problem of international payments and increasing considerably our foreign trade.
We must go still farther to get out of this inflationary debt-money financial system of ours, which makes debts and taxes go up and interferes with the economic activity in Canada.
It is the hon. member for Red Deer (Mr. Thompson), the national leader of the Social Credit party, who was stating at Orleans on November 28 last that chartered banks had extended or created $1,200 million

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dollars worth of new credit in 1962, on which 6 per cent had to be paid, or an amount of $70,000,000 in interests only, that is $17.50 annually for each family, and that indefinitely.
Mr. Chairman, with the new Department of Industry, the national production should show a substantial increase; but if the government thinks it will thus solve the unemployment problem, it is greatly mistaken, for the consumers or the families of Canada, in a proportion close to one third, do not have the means to buy present production. Already, our national production will hit the $44.6 billion mark. Our money has no value, because of inflation, and it is impossible to buy the whole present production.
Is it not the beloved martyr, President John F. Kennedy, who said last September that the most important task facing the United States was that of the monetary reform?
New President Lyndon B. Johnson dealt with that subject when he stated the following, as reported in Le Devoir, Wednesday, November 27:
And second, no act ot ours could more fittingly continue the work of President Kennedy than the earliest passage of the tax bill (which would bring about a tax reduction of $11 billion) for which he fought, a bill designed to increase our national income, our federal revenues, and our insurance against recession.
Without the monetary reform advocated by the Social Credit, it will be impossible to create a constant economic prosperity keeping pace with the population growth in Canada.
As the minister said a moment ago, the number of university students increases at a rate of 20 per cent every year. If we add to this number all those who are in secondary schools, how shall we succeed in employing all the new manpower coming regularly on the labour market?
Mr. Chairman, I cannot deal with industrial development without calling the attention of the Minister of Industry to my own riding of Chicoutimi and the Saguenay area. The riding of Chicoutimi is divided into two depressed areas: Chicoutimi and Port Alfred. Special care is required for this area, because 27 per cent of its population depend on unemployment insurance or welfare assistance.
There is in Chicoutimi an important industry that could be brought back to life with the co-operation of the Quebec government.
I know that the minister, in a speech delivered here in Ottawa, said that he would cooperate with the Department of Industry in the various provinces. That would be a wonderful occasion to bring back to life industries closed since 1930 and to put to work again assets worth $20 million which lie idle now. A regional economic planning

council was set up last October whose primary object is to promote industrial expansion. I feel that good relations must be created to facilitate industrial promotion.
In Chicoutimi North, my home town, an industrial and commercial exhibition was recently held and was a great success. The industrial board of that city helped three new minor industries to re-enter business during the past year.
We are trying presently to create an industrial spirit in our area. Our ports: Bagotville, Port Alfred, Chicoutimi, and even L'Anse Saint-Jean, are open gateways on the whole world. Those places are even the major ports in Canada for shipping the raw materials we have, and with all the industrial facilities at our disposal, there is every possibility for a very intensive industrial development.
Mr. Chairman, I hope the minister will give particular attention to the few points I have outlined, for we need the help of the Department of Industry, which has just been created, to promote industrial development and allow our families to live decently.


John James Greene: Mr. Chairman, I should like to add my words of congratulation to the minister on his appointment to this lofty post and on the very efficient way that he has been carrying out his duties in that capacity. I may say that the very fast way in which he has commenced the operation of this department might indicate that the comparison that the hon. member for Winnipeg South Centre made is not an entirely correct one, since he called him the workhorse of the cabinet. I suggest that his present pace might indicate he is built along speedier lines. He might well turn out to be the Man-o'-War of the cabinet, rather than the mere cumbersome Clydesdale. No matter how it turns out, Mr. Chairman, I am sure that at the end of the race he will pay off across the board for the party I represent.
Now, having passed these few equine bouquets, I trust I will not do what hon. gentlemen opposite do so often when they pass bouquets, that is take them away again before the minister gets a chance to put them in the flower pot. I have a few words I should like to say on behalf of my constituents with regard to this department, and that is the purpose for which I believe I was sent here by my constituents.
I suggest, Mr. Chairman, that in the creation of the new Department of Industry the minister has a very great opportunity to remedy some of the defects in the department as it existed before, that is the Department of Defence Production. As I understand it, the Department of Defence Production grew

up very largely, and certainly came to maturity, during the war years and the immediate post-war boom years. I suggest that in the process it may be that the department, which played a large part in the economic life of so many of our industries, lost sight of the fact that, being a department of government it was something more than just an agency of business. It should have been operated in a different way from a business organization, and as a department of government it surely had a very great social purpose which industry in the private sphere does not have to entertain.
I suggest that possibly in the past, from time to time, the Department of Defence Production as it has been operated has lost sight of any social purpose, as it must have if it has any raison d'etre as a government department or as a government agency. I suggest that possibly at times, particularly in its buying aspects, the Department of Defence Production lost sight of its social purpose and operated purely as a private business on a dollars and cents basis. I suggest that for a government department this might not be entirely correct. I hope that the minister, in conceiving the road and direction which this new Department of Industry is to walk, will consider not only efficiency, not only the cheapest way to buy, but will also consider the social ramifications to various parts of Canada in the various operating policies and in the directions the new department is going to take.
It is obvious that the department to date, at least the Department of Defence Production, has been very largely concerned in the aircraft and electronics fields. If in those areas there is to be bidding for contracts, and if there is to be no delimitation of any kind on that bidding, if there are not going to be certain preferences for small industries, certain areas where only small industry is allowed to bid or certain areas where industries that are particularly suited to a locality are allowed to bid, then surely the big are going to get bigger and there is going to be no room at all for the small. If this takes place the consequences will be that the big will have the field to themselves, and I suggest that in the long run this will redound to the detriment of the Canadian taxpayer.
I suggest, Mr. Chairman, that in the formation of the philosophies and the policies of the new department there should be a very careful look, not just at the dollars and cents aspect, not just at the big business aspect, but at the aspect of what is best for Canada. Because behind the very theory of the Department of Industry there is surely the idea,
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as is indicated by the fact that designated areas have been appointed-there is, as the hon. member for Burnaby-Coquitlam stated today, the very idea on which Canada is founded, namely that there must be some equality between the rich and the poor, that all must not go to the few and none to the many. I think this not only applies as to provinces between themselves but surely as to the citizens and workers of Canada also.
Therefore I suggest there should be areas within the department, and within the bidding practices of the department, that will be reserved to the small industries, to the encouragement and growth of industries that we wish to develop; and in particular, on occasion if certain industries are well adapted to a certain area, then surely the buying practices of a government department such as this should lend themselves to the encouragement and development of these industries. They should not be left out in the cold and cruel marketplace, where sometimes the methods and techniques of the giants of industry make it impossible for the small to compete.
I cite but one small example of this, and while this is not pervasive it is a fact, that certainly in the electronics industry there are subsidiaries of large industries who make components, which will ultimately go into a contract the department is bidding on; and I am given to understand that if a subsidiary is bidding on certain contracts, then the parent company, in giving prices to other tenderers, may charge them a great deal more for those parts than they charge to their own subsidiary. This puts any other bidder right out of competition.
I do not know how actively the old department of defence production looked into this type of practice, but certainly in the United States there has been an area of great concern that monopolies and combinations in industry, interlocking directorships and so on, would render it impossible for the small and new industry to compete. I hope in the buying practices of the department in the future there will be great concern in the new department, not only to ascertain that the bidding practices of the big make the game fair for the small, but also that the department will definitely have it as a policy that it will encourage the growth of small and new industries in the electronics and allied aircraft field, so that it will not just be a feeding ground for those industries which are already large and well established.
In this regard, in my constituency we have such industries that have developed with hardship in this type of a difficult market; because certainly in the electronics field, if you cannot do business with the government it is pretty hard to survive in the small,

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restricted consumer market we have in this country. And if the big fellows are going to get all the government business, then it is going to be very difficult for these new industries to develop.
What of industries that are having a difficult time in surviving in the competitive world and yet have something to contribute to Canada's future, and what of the industries we need very badly in times of national crisis? In my constituency there is an industry known as Light Alloys, which is possibly the best foundry in North America manufacturing magnesium castings. During the days when our aircraft industry was thriving, in particular prior to the unhappy demise of the Arrow, this industry was getting along very well. It produces magnesium castings that no other firm in Canada can produce. During the second world war the government was very glad to have that plant and encouraged its development and growth. This was under the leadership of the late C. D. Howe, who I think will go down in history as the man who did more than anyone else to encourage the growth of industry, and in particular the growth of the Canadian aircraft industry in all its allied fields.
Today it is difficult for an industry such as this to compete. It needs encouragement, and possibly some preference from time to time from the government. Ultimately, if industries such as this fold up, we will have to buy these magnesium castings from the United States, and it must be remembered that both the Minister of Industry and the Minister of Trade and Commerce are working very hard to the end that our balance of payments position be improved.
If industries like this are not encouraged to develop, and are not given help at the government level during the difficult years, it may be we will not only lose them as employers but their departure will render great detriment in the field of the international balance of payments.
There is just one other aspect, on which I like to call the social policy, that I believe should concern the department. I suggest there is a great opportunity in the formation of a new department to instil this sort of social philosophy, not only overtly within the department but within the new employees who are coming into it. If they can be made aware there is some national and social purpose to their work and that it is not purely the same as big business, it would be a great help.
In this connection of a social purpose, within the buying rules of the department might I suggest that the minister consider giving a greater preference to Canadian manufacture and production than is presently given. I know it to be a fact that we cannot be national

hogs in this regard. Trade is a two way process, and we cannot set up high barriers to prevent competition. But surely in the area of new industries that we are trying to develop, industries such as electronics, if small industries do not get some protection, the big will surely devour them, and there will be no incentive for our industries to develop. In this regard, in the departmental buying by the old department of defence production I have seen examples of American manufactured goods being bought, goods which did not provide a single job in Canada, and these goods won contracts over goods which were completely manufactured in Canada and which created employment in Canada.
Surely that again redounds to our detriment in the international balance of payments. I wonder if our manufacturers would be permitted to sell on a competitive basis in the defence area in Washington, unless it was under a defence sharing arrangement. I suggest that undoubtedly the American manufacturer gets greater protection in this regard, and surely our Canadian manufacturer, if he is to survive, particularly the new and growing manufacturer, should get some greater preference than is presently given him. I understand our manufacturers are given some preference, but it obviously has not been sufficient to see to it that our defence production contracts go out to as great a degree as possible to those manufacturers and employers who manufacture, and employ men in Canada.
In this regard I would like to bring to the minister's attention one other point. In my sister constituency of North Renfrew is the great atomic energy commission and the plants and works of that organization, which come under the minister's department. It is to be hoped-I think this probably is the case at the present time, and may it continue to be so-that the employees of this organization will be given continued encouragement by way of wages comparable to industry, comparable to what they could obtain in the United States of America, so we may maintain the very favourable and enviable position that we as a small nation have built up in this field. It would be a tragedy indeed if by reason of pettiness or penury at the government payroll stage we in any way impaired this great industry. We have had one sad example of losing so many of our skilled and highly trained aeronautical engineers by reason of the fact that the Arrow is no longer manufactured here. This, an industry in which it had taken years to develop the talents needed, fell apart.


An hon. Member:: And the frigates.


John James Greene: A great number of these highly skilled and highly trained employees found their way to the United States of America. It is to be hoped that the atomic energy scientists and the trained personnel there will receive no encouragement to leave Canada by reason of the fact that anyone can pay wages which attract them out of our country. We surely can afford in this land to pay, in the technological age that we are entering, the best of wages to these people who have built up our atomic energy commission in all its aspects.
There is one other point I should like to draw to the attention of the minister with regard to the Department of Industry as it affects my constituents. I suggest that the government plans with regard to the growth and development of our industry have shown a keen concern for the underdeveloped, for the economically unfortunate. I think this is in the best traditions of our party. They have done this in the maritime provinces by giving very large capital funds to assist in the development of this area, which has lagged behind the rest of Canada. They have recognized this principle, an egalitarian principle, if you like, of equalizing opportunity in various parts of Canada, by putting 35 designated areas under the care of the Department of Industry.
Unfortunately, this does not solve all our problems in this regard. I think there are areas of Canada the development of which is very analogous to that of the maritime provinces, but which unfortunately are not physically located in the maritime provinces. There are areas the growth of which has lagged behind, and not over a period of eight years, which was the determining period under the designated areas program-and quite properly so, because the areas that were so designated undoubtedly needed help. These are areas that possibly had grown to a very considerable degree and only lagged behind in the past eight years. I suggest there are areas much as the maritime provinces, even in rich Ontario, which over a period of 50, 75 or 100 years have not kept up with the vast growth in other parts of Ontario and other parts of Canada. Because they were not in the maritime provinces they received no capital grants to help them; and because possibly their lack of growth was not just over eight years, and accordingly they have not had a sudden surge of unemployment-they have been stagnant over many, many more years than eight-there is to date no specific plan to help them. These areas are not slow growth areas under the definition of designated areas, but they need capital help in much the same way that the maritime provinces need capital help.
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I sincerely trust that the minister in his wisdom will find a way in the new Department of Industry to help this type of area. I suggest this problem is applicable to a considerable part of my constituency and other parts of eastern Ontario, and possibly also to eastern Quebec. They need some sort of capital incentives or, as many of these areas are former lumbering areas that have petered out, perhaps under the Department of Industry it will be found possible to devise some way whereby the remaining lumber resources can be profitably used, with government help and encouragement, to create new industrial hope and new employment.
There is just one other point upon which I should like to touch briefly. It does not particularly affect my constituency, but I think this situation has struck all Canadians from time to time. I refer to the printing bureau. Having read the qualms expressed in the Glassco report about the printing bureau, and having from time to time over many years heard public doubts as to the propriety of having this giant institution doing government printing at the expense of private business, it may be that now this minister has taken over the department and has undoubtedly already shaken it by the heels- which is no doubt a good thing-he will take a look at the entire philosophy behind the printing bureau. Why should government compete to a great degree, as this huge institution does, with private business? If we are going to have a printing bureau competing to this extent, why not start manufacturing cars? I suggest that this is not properly within the government area of business, in a party which embraces private enterprise as its basic philosophy.
We have seen that this bureau publishes myriads and thousands of publications on everything from ducks to cartels. I do not know whether anybody ever reads them. They are undoubtedly published at great public expense. It is very difficult to find the exact cost of the printing bureau under its present set-up. If the set-up indicated in the Glassco report is put into effect and we revamp the fiscal system of the bureau, we may be able to find out exactly what it costs, or at least be able to obtain more accurate figures. There undoubtedly is a place for a government printing bureau, but I think a good look should be taken at it. Are all its publications necessary? Is the taxpayer of Canada paying too much for what he is getting? Are we competing unfairly against small business or private business? We would like the printing bureau to be doing something that is necessary to the government, but not that which is competing unfairly

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in the market place and at the same time being the drag on the taxpayer that it appears to be today.


Mr. Sienson:: Mr. Chairman, in speaking on these estimates I shall refer to the Department of Industry. This seems to be the most popular department the minister has this evening. The Minister of Industry brought to our attention the fact that a great number of skilled workers, such as scientists, engineers, designers and other professional men were leaving our country to find gainful employment elsewhere. The hon. member for Renfrew South also brought this to our attention a few minutes ago. I should like to ask the minister if he knows the percentage of people leaving Canada because of lack of opportunity here? I think everyone in the house is aware that we are importing many skilled and professional men from outside Canada today.
Will this new department not take the incentive out of industry? The Prime Minister said that this was not a new department and that the facilities for the department would come from the Department of Trade and Commerce. If this the case, why should we have this change? Under the last government the Department of Trade and Commerce was working very successfully and many members of the house realized this. The people of Canada realized it, for in 1961, 1962 and 1963 we experienced the best export trade and business expansion that our country has ever known.
I feel that the setting up of the new Department of Industry could very well mushroom into more and more red tape for our business people. Can the minister tell me whether the staff the new department is employing will come from the Department of National Defence, the Department of Defence Production and the Department of Trade and Commerce or are these people to come from our industries, where I feel they are vitally needed at the present time? If the latter is the case, then since this is a completely new department which will make further demands on industry and labour the result will be that this undoubtedly will be another burden for our industries to carry.
Those who are successful in the manufacturing field do their own planning and are tired of being planned by others. Anyone who has ever been in business knows the enormous amount of paperwork demanded by the government. All these government departments and their demands tend to raise the cost of producing to a point where some businesses find it impossible to continue. Will this department make further demands from

businesses by requesting statistics and reports? I do not believe this is what the Glassco commission recommended. They felt that these departments should be curtailed.
Since the bill has been passed the government has gone over the heads of municipal and provincial authorities to designate depressed areas, and this has caused much unrest and fear in industrial circles throughout the country. The hon. member for Marquette mentioned that this evening. I should like to put on the record an excerpt from an article in the Financial Times this week. It is headed, "Windsor Resents Designated Area Tag" and reads in part as follows:
Greater Windsor has become the federal government's most reluctant ward. It is one of 35 "des-signated areas" in Canada qualifying for special federal assistance because of chronic economic problems. The only trouble is that many in the Windsor area simply do not want the help.
The reason is that, on the surface at least, Windsor and surrounding municipalities have not had it so good for a long time. The economy of the area is largely tied to the fortune of the Canadian auto industry, which is now entering its third boom year in a row. The auto business has been so good, in fact, that Ford and Chrysler have called back men laid off as long as nine years ago. Chrysler has no unemployed men left on any seniority list...
Community officials seem almost obsessed with creating a new image and infusing confidence. But the term "designated area" does not fit into the image-making scheme. Some local officials resent it. They would like the government to withdraw it.
To be fair to the minister I should point out the view of industrial leaders in Windsor.
Industrial leaders do not agree. They think that new industry is more likely to be attracted by the financial benefits of the federal plan than by any new image.
I do not feel that industry in this area should have a preference over industries in other areas. These designated areas were set up before the new Department of Industry was really created and got under way. What can we expect after the new department is completely formed? Industry all across the country is worried. Is the department going to distribute contracts to the favoured industries or to so-called distressed areas? Are they going to affect further the law of supply and demand?
The cost of the new department when it gets rolling will run into millions of dollars. My chief question is, does industry need this guidance? I should like to ask the minister this question: Will any assistance be given to universities to set up research departments to aid industry, so that these services would be available for the development of new products and new methods of manufacuring? By promoting this type of research in our universities we would be setting up a challenge to the students and making available

information to industry that I feel is not available at the present time.
Finally, I should like to say that we must find markets and capital for industry. If we find these I am sure industry will build and expand in Canada without too much assistance from this new department.


Mr. Gelber:: Mr. Chairman, I should like to say a word about the Department of Industry and the problems we in Canada face at this stage in our economic development. Some feel, like the previous speaker and other speakers, that our development should be haphazard. There is a happy go lucky theory that everything good is going to come to Canada, that there are unused frontiers and all we have to do is go west and the untapped virgin resources will pay for all our problems and all our mistakes, and that somehow or other the inevitable destiny of Canada is up, up and up ascending plateaus. I feel this is not realistic economics. It is not a realistic examination of the economic problems that face Canada in the sixties.
One needs only to look at the rate of economic expansion in countries which we always considered old hat. Somehow or other Italy was poor, Britain was in another century, France had its grandeur in other days and Germany was destroyed. If you take a look at the rate of economic development in these countries during the past decade you will see that it far exceeded the rate of growth in Canada, and far exceeded the rate of growth in the United States. Rich as we are in natural resources, abundant as we are in the things required to make economic growth, countries like Italy, poor in economic resources, have shown a much higher rate of growth.
Industrial activity in the north of Italy was so great that it was necessary to import labour from other countries into the rural areas of the south to replace those attracted by growth in the north. The rate of German recovery has been phenomenal. The skilled labour in Germany, plus the stream of refugees from the east and the great torrents of United States capital which were invested there after the war made for enormous economic development. France is a country which has surged ahead. Somehow or other it became one of the household fixtures in North America that France periodically would be involved in great crises. The franc was in a constant process of devaluation. Yet we have this enormous industrial expansion in France. France is a rich country, and has reached economic maturity with policies adequate to the circumstances of today.
We always looked to Britain in the latter years to face crisis after crisis. They have 28902-5-338
Supply-Industry
had problems of exchange and yet the British economy has bounded ahead. These things did not occur by happenstance. These things did not come about because somehow or other the month of the calendar arrived and that was the month to go ahead. A proper assessment was taken of the problems of these countries. They marshalled their resources and made a plan and encouraged the development of their economies along productive and economic lines.
Now, Mr. Chairman, this country has reached the end of its frontier. We can no longer look for boundless discoveries of natural resources that are somehow or other going to pay our bills. We have to make a proper assessment of our capabilities; we have to take a proper inventory of our resources. We must take a look at our manpower, we must measure our markets and we must plan to assure that Canada will achieve ascending plateaus in economic development.
The history of Canada has been from staples to highly processed commodities. We all know that Canada started with the fishing industry, the cod on the east coast, the lumbering industry and the fur trade which hammered out the frontiers of the land. It was wheat and lumber and all our staples, which measured the economic development of the country.
Now we are in a period of industrial growth. We went into the first war with about half of our labour force employed in agriculture. After two world wars we have become very highly mechanized and industrialized. Today the portion of our labour force engaged in agriculture is somewhere in the neighbourhood of 11 or 12 per cent. Today we find that 26 per cent of our labour force is employed by industry, and 26 per cent of our production comes from industry. It is interesting to see what is happening with industry, because it is facing a serious testing time. We have to take the measure of our secondary industries and see what we can do by way of mobilizing our best resources, which I believe this department can and is most likely to do, in order to assist in the planning of our economic and industrial growth. Twenty six per cent of the value of all goods and services produced in Canada are produced by industry. Industry also accounts for 26 per cent of our employment. Since 1945 there has been an increase of only 15.6 per cent in the labour force in industry, but an increase of 61.2 per cent in our volume of production. That means that more and more industry is becoming highly mechanized, more efficient, and production is growing. We must mobilize our

Supply-Industry
resources to ensure that we can use highly efficient industry to engage the manpower of the country.
There is the enormous importance of capital investment as the key to the rate of economic growth. If we do not have a sufficient rate of capital investment, then we will not have an adequate rate of growth to use our plants and employ our manpower. We are increasing the rate of capital investment. It slowed down in the early 1960's but is increasing again. We are once more enjoying a high rate of economic growth. As industry expands and the rate of industrial production grows, and investment flows into industry, there is an increase to new plateaus.
I should now like to say a word about the training of our labour force. We have to invest in industry, we have to invest in factories, we have to invest in arterial roads, and all the paraphernalia of industrial development. But we also have to invest in men. A few days ago we discussed a new bill to increase facilities for training manpower. It seems to me that the training of manpower for industry must be associated with industry, not only with formal education. Formal education quite often puts handicaps in the way of absorbing people into the training stream, because we place restrictions on those who can be trained, on who can qualify for industrial training in schools of formal education. They have to have a certain standard of formal education to begin with. We are bringing to this country hundreds of thousands of people who will never be absorbed into our formal schools of education. We must expand facilities for on-job training, and we must examine the plans in Europe which have led the way to on-job training to increase industrial skills, and to investment in manpower.
Another thing we must look at is management. Robert Macaulay, a recent minister of industry in Ontario, made a sensational speech in the city of Windsor the other day in which he said the management in this country is not moving ahead or meeting the challenge, and that it is not as developed as it might be. The problem of management is something we must look at to ensure that we get the most efficient and wisest direction of industry.
Now, Mr. Chairman, a good deal has been said about foreign capital in this country. I sympathize very much with those concerned about the control of industry, but I feel that the problem of foreign capital is an economic one. It is not a political problem, as has been said; it is primarily an economic problem. It is an economic problem to the extent that we have to pay a price in foreign exchange for foreign capital investment in this country. To the extent that we can pay that price
[Mr. Gelber.l
we should do so. We must welcome capital investment and make it profitable. We should create conditions which are profitable and secure for all people who invest in this country. At the point where the price becomes too onerous we must look at the problem, and I believe we have to do more to encourage investment by Canadians in Canadian industry. Foreign industry has brought to this country great know-how and industrial skills, both in management and in labour. It is a debt we will have to continue to pay, and to which we must look and remember. Not only have many of the people who have migrated to this country come here highly skilled, but the branch plants which have been established by the most advanced and mature industries of the world have brought their skills, their techniques, their understanding and their knowledge of markets for developing Canadian industry.
We must plan, Mr. Chairman, and put our best intelligence to this problem. It presents many challenges to Canada in the 1960's. I believe the minister and his able assistant will give a direction and an understanding, which will bring a formulation of policies and lend incentives, so that Canada can continue to grow and use her best industrial might for the welfare of all.


Mr. Kindi:: Mr. Chairman, the estimates of the Department of Industry provide an opportunity to say a few words on this newly-created department. It has been created by an act of parliament and includes not only its new sphere but also several departments or branches of departments which were already in existence. Above all we want new industry. I am one who is hoping that the new Department of Industry will turn in a good account of itself. We are doing everything possible to assist the minister in the riding of Macleod and in the Crowsnest pass, which has been designated a slow growth area, in order to bring about industrial development.
Before coming to some of the things we are doing by way of co-operation with this department I should like to bring to the attention of the minister some of the obstacles facing his department. There has been some criticism of the word "industry" as the name of the new department. I do not wish to go into the pros and cons, but I think everyone realizes there has been a certain amount of public criticism of the choice of that particular word. I have also heard it said-and I have no hesitation about mentioning this; I do so for a purpose-that a number of industrialists are somewhat afraid that this new department will be in a position where certain individuals may be able to dictate to

them. I hope the minister and the splendid officials he now has from one end of his department to the other will exercise caution in their dealings with industry, and be very careful at all times not to take any kind of dictatorial attitude toward industry. I think, on the other hand, that the policy of the department must be spelled out. It must be made clear and set down in such a way as to enable all those who wish to work with the department or to take advantage of the offers to be able to do so without the possibility of misunderstanding.
The other day, speaking on the estimates of the Department of Finance, I raised the question of the 95 per cent new machinery requirement imposed on new industry desiring to take advantage of the designated area assistance. I still hope the minister will reconsider this particular provision, if he has not already done so. If he has some change to announce in this regard I would be delighted to hear him. I would point out that when small industries are being started in the new area it is usual for them to gather together machinery which has already been used and move into premises which are not new. A great deal of capital is necessary before a new industry can become established, and it is often necessary to begin by using second hand machinery and buildings which have been occupied before. I was hopeful when I raised this question with the Minister of Finance that he would be able to make some alteration in this rigid rule with respect to the 95 per cent requirement.
In the Crowsnest pass area we have the only designated area in Alberta. Part of it is in Alberta and lies within the Macleod riding, but the western part of the designated area lies within the constituency of east Kootenay. The area in Alberta has already organized a chamber of commerce which includes the entire Crowsnest pass area. In other words, instead of having a chamber of commerce attached to each particular town, we have one body for the entire area. In addition, the people there have organized an association known as the Crowsnest pass development association. They have gone several steps beyond that. They asked the Oldman river regional planning commission to help by preparing a new brochure which will bring together all the potentialities for industrial development, and make them available to prospective investors who might wish to know what the opportunities are in the Crowsnest pass area. The feeling is one of optimism. We	have	seen a
tremendous growth of industrial development in southwestern Alberta during the past six or seven years. Some 20 new industries have been started in the Macleod riding. And 28902-5-338i
Supply-Industry
we want more, especially petrochemical industries. We have the natural resources and we want more industry.
I might spend a few moments pointing out how some of these industries that we now have came about. One method has been the sale of abandoned airports. The airport at Macleod was sold to the town of Fort Macleod, and the town in turn resold two hangars to a plywood manufacturing concern which is now employing over 60 people. When it is in full swing we expect it will employ over 100 people. The other hangars were sold to a trailer manufacturing concern which is employing between 60 and 70 people. Then a steel factory was established in another hangar and this, in turn, has been employing 30 or 40 people. The Trail Smelters, selling fertilizer, have purchased one hangar and have put in a spur railroad. They are now employing 20 or 30 people and using the hangar as a warehouse and distribution point for Elephant brand fertilizer. Another hangar has been leased to a furniture and mattress manufacturing concern.
So industries are coming to the old town of Fort Macleod. It stood still for a number of years but now, with the sale of the airport and the spread of industry there, everything is booming. The people are happy and that is what we want to see all over, with the growth and development of new industry.
The Vulcan airport was sold to the county of Vulcan and the county, in turn, sold part of it to a concern which is building houses. I understand this concern is now doing very well. I am informed by the minister, by officials of the Crown Assets Disposal Corporation, by members of the municipality of Willow Creek and of the town of Claresholm that the sale of the Claresholm airport is in its final stages, if it has not been completed. I made the suggestion to the three levels of government that they should get together and decide among themselves on the purchase of this airport. The purchase has been held up for a number of years as a result of legal action, but this was all swept away with the amendment of the Alberta municipal district act. It was hoped that these three levels of government would formulate a policy which, in turn, would help the industrialization of the Claresholm area.
While I am on this subject I want to say a word of congratulation and thanks to the people in the Department of Industry and in particular to the Crown Assets Disposal Corporation. During the past five years I have had occasion, during the handling of these other airports, to co-operate with and do my part as a member to help bring about this development of industry in these old

Supply-Industry
hangars. I have always received excellent co-operation from Mr. Richard, who is the president of the corporation, Mr. O'Donoghue, and many others I could name in the Crown Assets Disposal Corporation. Quite often these people are the unsung heroes when it comes to matters of industrialization. They have a job to do and in these complicated matters you have to get a meeting of minds. My experience has been that we have had good co-operation from the members of Crown Assets Disposal Corporation.
We have had word, Mr. Chairman, of this terrible new tragedy, this airplane tragedy, which occurred between Montreal and Toronto in which 111 passengers and seven crew members were involved, and this has served to dampen our whole evening performance. There is a bigger crowd out in the rotunda than there is in this chamber. This tragedy brings to one's mind the question of safety, which is an industrial problem. These airplanes are manufactured in Canada, the United States or in England. Safety is of paramount importance in the construction of these airplanes in this day and age, when we look to air travel as one of the accepted methods of travel.
So, Mr. Chairman, I close with the hope that the Department of Industry, with the problems which a new department does have, will be able to overcome the difficulties with which they are faced. Finally, I should like to invite the minister to come to the west, and I will take him in a car to the Crows-nest pass and show him what we have in the way of natural resources that we want developed. We want more petrochemical industries. We have almost every natural resource you can imagine, but what we need is industry. We have 7 per cent of the world's coal supply, and we believe that industries which locate in the area will be competitive with those operated in any other area of Canada. So, I extend an invitation to the minister to visit us and become familiar with the things that we have to offer. Then, as a result of this close-up view he will be in a better position to appraise the work of his department and co-operate with all of us who are trying to co-operate with him.


H.-Pit Lessard: Mr. Chairman, I should like to add a few words to the remarks made today on the estimates of the Department of Defence Production and of the new Department of Industry, in order to comment on certain events likely to influence the economic growth of our country, and more especially of some of its areas.
I know that the new Department of Industry, headed by the hon. member for St.

Antoine-Westmount (Mr. Drury), who is also Minister of Defence Production, is a department which in the next months and in future years will become vitally important if our country is to undergo the industrial development which we all hope for and which our country sorely needs.
Mr. Chairman, if we wish to direct the development of industry and of our natural resources, I think that the Department of Industry which has just been established along with the Canada economic council will have an essential part to play. However, its function will be conditioned by the co-operation granted by the provincial governments and other similar bodies which these authorities have established to look after the development of our natural resources.
Mr. Chairman, this shows our need of a liaison body between the provincial and federal authorities, in order to develop our industries and our natural resources.
We cannot imagine at the present time the federal government fully discharging its duties without a close and continuous co-operation with the provincial governments. I believe the discussions which have taken place these last few days, within the framework of the federal-provincial conference just ended, have proved that we could no longer conceive the role of the federal government as an absolute one to be played regardless of the needs and wishes of the provinces.
I believe that, in the economic development of our country, we must not expect any action to achieve concrete results without the full co-operation of provincial organizations.
Mr. Chairman, many recent developments in our country were such as to make us understand how important that co-operation is.
I should like to refer especially to what happened when an attempt was being made to designate the areas in this country which were to get special assistance from the government to deal with chronic and permanent unemployment.
From what we have heard, those areas were designated without the provincial governments being consulted beforehand.
I think, Mr. Chairman, that this shows the extent of the lack of co-operation and planning.
The provincial governments have area development agencies and economic planning agencies. When the central government decides to choose arbitrarily some areas in order to help them, without taking into account the views expressed or the plans submitted by the provincial governments, I think that proves the lack of co-operation which must necessarily result in duplication

of agencies that must help an area. I do not think that is in the interest of our country and its expansion.
These designated areas were selected according to criteria referring to the unemployment situation over the last eight years. I know that several criticisms were submitted to the various departments concerned as well as to the Minister of Industry, about the basis which was used for the selection of these areas.
Like many other members, I submitted my personal criticisms and those of my fellow citizens on this matter, precisely because some criteria that were used as a basis were not fair and did not represent the problem as it existed.
I know that other areas and other cities were designated since, and can benefit from the advantages of the plan. And I am sure also that here again we have a measure that is only a temporary makeshift to the major problem which faces us at this time, namely the development of our industries.
As most hon. members in the house and probably most citizens in this country, I followed with interest the effort made by the Minister of Industry to increase the production of automobile parts in our country.
Mr. Chairman, I was surprised at a certain moment to see that Canadian ministers had to go to the United States in order to request, or rather to beg permission to increase production of automobile parts in Canada. I then realized to what extent we were dependent on the United States and also to what extent we were still a colony. I realized how impossible it is to understand that Canada is politically independent, since, at the base of all independence, there must be economic independence, and there is no possible sovereignty, if we do not have first of all economic independence. I was really amazed to see that we had to ask the Americans permission to increase our production of parts involved in the construction of automobiles used on Canadian roads.
That leads me into believing

I may be wrong-that if the Canadian government saw fit to choose the DC-9 for T.C.A. rather than another aircraft, no matter where it came from, but which would have been practically completely built in Canada, that decision was taken under undue pressure. Indeed, the aircraft chosen is still in the development stage and the government probably reached that decision in order to be authorized, in return, to increase production of automobile parts in Canada.
We know that the American government, through some of its high officials, threatened to retaliate to that praiseworthy project of
Supply-Industry
the minister, which I completely approve, to increase production of automobile parts in Canada. I think that the minister and probably the government had to make some concession behind the curtains to get the authorization to increase production of automobile parts in Canada.
Mr. Chairman, that was very detrimental to our country because if we must, every time we wish to increase our industrial production in this country, concede an advantage in the same proportion to another sector of the American industry, all our efforts are useless and give no concrete or practical result.
I understand, Mr. Chairman, that the government based its decision on technical reports prepared by experts who picked the DC-9 rather than the Caravelle or another aircraft. It simply played with words, because this same government rejected the findings of the report submitted by these same experts to keep the maintenance depot of Trans-Canada Air Lines in Winnipeg.
There we see to what extent a government may be influenced first by political considerations and secondly by unwarranted pressures from a foreign power on our industrial development. We, of the central government, want to use the whole potential of this country to increase its productivity, to fight unemployment in the various sectors, and I suggest this is quite fair and normal. The Department of Industry and especially that of defence production, which are both under the same man, should realize that the country is made up of ten provinces, when the time comes to award contracts to meet the requirements of the Department of National Defence concerning armaments or various supplies.
Thus, in those contracts to be awarded, the lowest tender should not be the only factor to consider. Keeping the economic development of our country in proper balance should also be taken into account. By that, I want to point out to the minister that when, in any one year, he has to grant contracts to the amount of about $100 million, the provinces are entitled to consideration on a fair basis for these contracts. No province has a priority right.
I hope the minister will remember that there are in the province of Quebec, as well as in the province of Ontario and other provinces in Canada, industries which are duly qualified to meet the needs of his department. Moreover, such a policy would help reduce the high level of unemployment we now have in the province of Quebec.
I would like to mention at this point that we cannot rely solely on the expenditures of


[Stage Direction]
Item agreed to.
Supply-Defence Production

[Stage Direction]
1. Administrative expenses of the atomic energy control board, $133,700.
Douglas Mason Fisher: Mr. Chairman, I should like to know if the minister is going to make any statement with regard to all the questions that have been asked recently about the location of developments. Has he got anything more to add now?


Charles Mills (Bud) Drury: Mr. Chairman, if these votes can be carried rapidly I think I will fill in the remaining time trying to answer the hon. member for Port Arthur.


[Stage Direction]
Item agreed to.

[Stage Direction]
L5. Advances to Atomic Energy of Canada Limited in such amounts and in such terms and conditions (including the delivery to Her Majesty, in satisfaction of the advances, of obligations or shares of the company) as the governor in council may approve, to finance the construction of the Douglas Point generating station; to finance the construction of housing and other works near the Whiteshell nuclear research establishment and to authorize Central Mortgage and Housing Corporation to undertake construction of housing and other works for Atomic Energy of Canada Limited, $28,923,000.
Herman Maxwell Batten: Shall the vote carry?


George Clyde Nowlan: On the understanding the minister will make a statement later saying the heavy water plant is going to be put in Nova Scotia.


[Stage Direction]
Item agreed to.

[Stage Direction]
IS. Grants to municipalities in lieu of taxes on crown owned defence plants operated by private contractors, $164,000.
Herman Maxwell Batten: I think there is a correction to vote No. 15.


[Stage Direction]
Item agreed to.

[Stage Direction]
1. Salaries and other expenses, $40,725,200.
Douglas Mason Fisher: Could the minister give us further details about what general plans he has? He indicated that the national research council is going to expand its program. How much?


Charles Mills (Bud) Drury: In respect of the question asked by the hon. member for Port Arthur, at the present time the national research council is supporting in Canadian universities, in most cases wholly but in some cases only in part, by grants in aid, 1,200 professors and 2,400 graduate students. The five year forecast for university support, not including support

Supply-Defence Production specifically for medicine, is that it will be just about triple by that time. That is what is planned. I cannot give the hon. member precise numbers as to how many post-graduate students, pre-doctorate students and university professors this will involve but it does indicate that in addition to the quite substantial numbers now in the physical sciences who are being assisted by the national research council there will be a substantial increase in these numbers.


Douglas Mason Fisher: Five years will take us to 1968. If, as I understand, university enrolment is going to double at a minimum by 1970 from what it is at the present time, the tripling of this particular program in the next five years really does not look that impressive when it is put in those terms. I should like to know what plans the national research council has to scale their program in relation to this increased enrolment.


Charles Mills (Bud) Drury: I suggest that the tripling of support in relation to the hon. member's forecast of only a doubling of enrolment indicates that there will be a relative increase in support. As I indicated, we do recognize that more has to be done. In the forecast I have just given of a rate that is triple perhaps recognition should be had of the fact that, as the hon. member pointed out a little while ago, one of our tasks is not only to increase the output of the universities but more particularly to find jobs for them in Canada. The hon. member will recollect the figure that he gave, that some 26 per cent of those who graduated went elsewhere than Canada to find work. It seems to me, as I indicated in my initial remarks, that the first and increasing emphasis should be placed on increasing the possibilities of these graduates in the physical sciences finding employment within Canada, while at the same time increasing the scale of assistance itself. All I can say is that we have a slightly different scale of priority than that suggested by the hon. member for Port Arthur. But I would indicate that the national research council intends to increase its support to universities in light of the measure of its present effort and the forecast expansion of our universities.


[Stage Direction]
Item agreed to.
Douglas Mason Fisher: Ten thirty.


Gordon Minto Churchill: Mr. Chairman, is it not advisable to carry on and complete these various areas? There has been a good bit of restraint exercised here. I have put aside some very eloquent speeches on atomic energy, the national research council, the medical research council, and so on. Surely we should get on and sit for another 15 minutes, if you like. The minister might answer certain questions which we have asked and we can complete this particular department. There was an unfortunate incident last week when he was prevented from going ahead with his estimates; let us now make up for that lost time.


Some hon. Members:: Agreed.


Herman Maxwell Batten: Vote No. 10-


Douglas Mason Fisher: Ten thirty.


George Clyde Nowlan: And you write about parliament.


Herman Maxwell Batten: It being ten thirty o'clock shall I rise, report certain resolutions, and request leave to sit again at the next sitting of the house?


Some hon. Members:: Agreed.


George Clyde Nowlan: Do I understand the minister will not make a statement until Monday saying that the heavy water plant is coming to Nova Scotia? Do we have to wait till then for the word?
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: I should like to ask the acting house leader what the business will be for Monday and other days next week.


Paul Theodore Hellyer: On Monday we will take interim supply and after that the redistribution bill. Unfortunately the business for Tuesday cannot be announced at this time, until we see what progress is made.


Gordon Minto Churchill: What about the defence estimates? Are we getting those next week?


Paul Theodore Hellyer: I would certainly hope so.


[Stage Direction]
It being twenty four minutes before eleven o'clock the house adjourned, without question put.

[The following items were passed in committee of supply this day:]

[Stage Direction]
Id. Departmental administration, $665,000.

[Stage Direction]
1. Administration expenses of the atomic energy control board, $133,700.
5. Grants for researches and investigations with respect to atomic energy, $900,000.

[Stage Direction]
(Research program) -
10. Current operation and maintenance including expendable research equipment, $31,468,600.
15. Construction or acquisition of buildings, works, land and equipment and to authorize Central Mortgage and Housing Corporation to undertake construction of works near the Whiteshell nuclear research establishment for Atomic Energy of Canada Limited, $13,466,300.
L5. Advances to Atomic Energy of Canada Limited in such amounts and on such terms and conditions (including the delivery to Her Majesty, in satisfaction of the advances, of obligations or shares of the company) as the governor in council may approve, to finance the construction of the Douglas Point generating station; to finance the construction of housing and other works near the Whiteshell nuclear research establishment and to authorize Central Mortgage and Housing Corporation to undertake construction of housing and other works for Atomic Energy of Canada Limited, $28,923,000.

[Stage Direction]
A-Department-
1. Departmental administration, $9,913,200.
la. Departmental administration, $337,900.
5. Care, maintenance and custody of standby defence plants, buildings, machine tools and production tooling, $808,100.
5a. Care, maintenance and custody of standby defence plants, buildings, machine tools and production tooling, $23,400.
10. For the establishment of production capacity and for capital assistance for the construction, acquisition, extension or improvement of capital equipment or works by private contractors engaged in defence contracts, or by crown plants operated on a management-fee basis, or by crown companies
Supply-Items Passed
under direction of the Minister of Defence Production, subject to the approval of treasury board, $1,521,500.
15. Grants to municipalities in lieu of taxes on crown owned defence plants operated by private contractors, $164,000.
20. To establish qualified sources for the production of component parts and materials, subject to the approval of treasury board, and to authorize commitments against future years in the amount of $450,000, $350,000.
20a. To establish qualified sources for the production of component parts and materials, subject to the approval of treasury board, and to authorize, notwithstanding section 30 of the Financial Administration Act, total commitments of $1,200,000 for the foregoing purposes during the current and subsequent fiscal years, $100,000.
25. To sustain technological capability in Canadian industry by supporting selected defence development programs, on terms and conditions approved by treasury board, and to authorize, notwithstanding section 30 of the Financial Administration Act, total commitments of $40,000,000 for the foregoing purposes during the current and subsequent fiscal years, $10,000,000.
25a. To sustain technological capability in Canadian industry by supporting selected defence development programs, on terms and conditions approved by treasury board, $3,500,000.
B-Crown Companies-
30. Expenses incurred by Defence Construction (1951) Limited in procuring the construction of defence projects on behalf of the Department of National Defence and procuring the construction of such other projects as are approved by treasury board, $2,320,000.
30a. Expenses incurred by Defence Construction (1951) Limited in procuring the construction of defence projects on behalf of the Department of National Defence and procuring the construction of such other projects as are approved by treasury board, $300,000.
Canadian Arsenals Limited-
35. Administration and operation, $4,000,000.
40. Construction, improvements and equipment, $391,900.

[Stage Direction]
1. Salaries and other expenses, $40,725,200. Construction or acquisition of buildings-
5. Construction or acquisition of buildings, works, land and equipment, $3,243,500.
28902-5-339
[Stage Direction]

.
[Stage Direction]


Monday, December 2, 1963