1963-12-09

[Stage Direction]
Second report of standing committee on mines, forests and waters-Mr. Godin.

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

[Stage Direction]
Mr. H. M. Batten (Humber-St. George's)
presented the second report of the standing committee on debates, and moved that the report be concurred in.
given to hearing the owner's arguments without going through the expense of an appeal?
3.	How many who have not accepted the expropriation value are veterans buying under the provisions of the Veterans' Land Act?
4.	On expropriation of properties of veterans buying under the Veterans' Land Act, with an interest rate of 3.75%, is provision being made on a repurchase value at the same interest rate, or an additional allowance to compensate for any difference?
5.	Will any department protect a veteran in this matter or make legal services available to the veteran?
Mr. Dupuis:: The reply to this question is somewhat over a page in length and includes many names and lot references. Perhaps the house would be agreeable to it being taken as read and printed in Hansard.


Mr. Speaker:: Is the house agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Peters: 1.	With the raising of the water level in lake Timiskaming, how many farmers and property owners received compensation for the change in the waterline?
2.	How many property owners are still eligible for compensation?
[Editor's Note: For text of reply see below:!
1.	Yes. Properties in the greenbelt within one half mile of the Leitrim public school which is assumed to be the centre of the Leitrim area which have been expropriated and settled by the national capital commission are listed below. Amounts of settlement were based on individual appraisals of each property. These appraisals used value to the owner to establish the amount and reflect the relative advantages and disadvantages of location.
West half of lot 14, concession V East half of Lot 15, concession IV
nil.
3. How much compensation was paid by the	Name	Acreage	Pricefederal government to property owners along the shores of lake Timiskaming as a result of high	R. Clarke	1.5	$19,000water damage between the years of 1950 to 1960 and	H. G. Clarke	150.0	$150,000I960 to 1963?	E. Stewart	50.0	54,000


Mr. Badanai:: 1. One hundred and sixty	West half of lot 15,	, concession V	property owners received compensation following the construction of this dam which was	Name	Acreage	Pricecompleted in 1911. All eligible claims were	K. P. Benson	.8	$33,000settled by 1922, and no payments have been	C. N. Jordan	5.0	22,500made since.	C. Whitmore	13.0	43,0002. None.	N. M. Ritchie	1.9	26,5003. None.	East half of lots 14 and 15, concession IV	* NATIONAL CAPITAL COMMISSION EXPROPRIA-	Name	Acreage	PriceTION, LEITRIM AREA	G. W. Kemp	117.5	$135,000


Mr. Winch: 1.	Has the national capital commission expropriated properties in the Leitrim area and, if so, on what basis was expropriation valuation based and, what prices have been paid on various properties in that area in accordance with their location?
2.	How many owners have not accepted the expropriation figure and, what consideration is being
2.	Within the aforesaid area, settlement has not yet been reached with one owner, Mr. Harold G. Clarke, for a small holding in the east half of lot 15, concession IV, consisting of four and a half acres, who was offered $31,300 in full settlement of his claim. For

Questions
some time the national capital commission's staff has been awaiting a decision from Mr. Clarke's solicitor as to whether the amount is satisfactory.
3.	Nil.
4.	Financial assistance made available to a veteran under part I of the Veterans' Land Act bears interest at the rate of 3J per cent. Loans made under part III of the act bear interest at 5 per cent. When a property is expropriated, the veteran concerned may elect to have the director redisburse all or part of the compensation moneys for the purchase of a substitute property and continue his contract with the director on the said substitute property. If he does so elect, the same interest rate or rates apply as applied prior to expropriation.
5.	Although legal services are not made available, the veterans land administration will provide assistance to a veteran in settlement negotiations to the extent of the administration's opinion, based on appraisal data, of the value of the property concerned.


REPORT ON WORLD FAIR
Mr. Fisher: 1.	Is it the government's intention to report on or before December 20, 1963, on the Montreal world fair (1967) as required by statute?
2.	Are there any other requirements of the particular statute that have not been observed as of November 6, 1963?


Mr. Pearson:: 1. Yes.
2.	No.


CULTIVATED LAND, LONG PLAIN INDIAN RESERVE, MAN.
Mr. Enns: 1.	How many acres of land are there on the Long Plain Indian reserve in Manitoba?
2.	How much of this is under cultivation and operated by (a) residents of the reserve (b) non-Indians off the reserve on lease?
3.	(a) What are the terms of the lease (b) to which office are the moneys paid (c) do all the residents benefit from this arrangement?
4.	Can residents on the reserve arrange to operate any portion of the land under cultivation for their own use?


Mr. Munro:: There are two reserves by this name in the Portage la Prairie Indian agency, Manitoba, Long Plain Indian reserve No. 6 and Long Plain Sioux Indian reserve No. 6A. The following is the information as it applies to both reserves:
1.	Long Plain Indian reserve No. 6, 7,745.25 acres; Long Plain Sioux Indian reserve No. 6A, 1,317.10 acres.
2.	Long Plain Indian reserve No. 6, (a) area cultivated by Indians, 1,262 acres; (b) area cultivated by non-Indians on lease, 3,053 acres.

Long Plain Sioux Indian reserve No. 6A,
(a)	Area cultivated by Indians, 131 acres; (b) area cultivated by non-Indians on lease, 254 acres.
3.	Long Plain Indian reserve No. 6, (a) seven leases, \ share of crop; one lease, J share of crop; one lease, cash rental of $1,000 per annum; (b) Portage la Prairie Indian agency office; (c) Yes.
Long Plain Sioux Indian reserve No. 6A, (a) three leases \ share of crop; two leases total cash rent of $188.50 per annum; (b) Portage la Prairie Indian agency office; (c) Yes.
4.	Yes.


C.N.R. RESERVATIONS, CHARLOTTETOWN, P.E.I.
Mr. Macquarrie: 1.	Has the Canadian National Railways discontinued allotting sleeping car space on the Ocean Limited train No. 1 for reservations through its Charlottetown office and, if so, for what reason was such decision made?
2.	Is it now necessary to reserve space on coach cars on this train and, if so, may such reservations be made at Charlottetown?


Mr. Mcllraiih:: The management of Canadian National Railways advise as follows:
1.	Yes. With the introduction of an expanded teletype network for passenger reservations, all space in sleeping cars is held by the reservation office at the station where such cars originate. This was done in the interest of providing the best possible service to the greatest number of customers.
2.	Yes.


C.N.R. SEGREGATION OF INDIANS
Mr. Howard: Since January 1, 1960, has Canadian National Railways engaged in the practice of segregating native Indians in separate cars or particular sections of cars on its railway operation and, if so (a) upon what lines and during what times was this practice engaged in (b) is the practice still in effect and (c) what was the reason for such practice?


George James McIlraith: No.


PROMOTION OF SEASONAL EMPLOYEES
Mr. Bell: 1.	Is it the policy of the civil service commission to promote seasonal employees who are employed for specified periods under section 51 of the Civil Service Act in periods when such employees are not employed?
2.	If so, is such a policy consistently followed in all competitions involving such classes of employees?
3.	If not, when and under what conditions are such promotions made?


Mr. Pickersgill:: I have been given the following answer by the civil service commission:
1.	Where it is considered that qualified candidates might be found among seasonal

employees, it is the policy to admit such employees to competitions regardless of whether the competition is or is not held during a period in which they are required to perform their duties. A seasonal candidate, who was the successful candidate could be promoted during the period in which he was not required to perform his duties, as well as during the season in which he was employed, but the promotion in either case would be effective only from the date on which he assumed his new duties.
2.	Yes.
3.	Not applicable.
Note: The wording of the first part of the question has been discussed with Mr. Bell and it has been established that section 51 of the Civil Service Act is not applicable in the context of this question.


CHARLOTTETOWN, P.E.I. WHARF
Mr. Macquarrie: 1.	When is it expected to complete the construction of the new Department of Transport wharf at Charlottetown ?
2.	When will construction of the departmental buildings on the wharf commence?
3.	Does the government contemplate constructing a new wharf for general commercial purposes?


John Whitney Pickersgill: 1. Approximately May 31, 1964.
2.	The requirements of the Department of Transport for the buildings on the new wharf at Charlottetown are now before the accommodations committee of the treasury board. As soon as authority is obtained, the plans can be drawn by the Department of Public Works and the work could be put in hand.
3.	Not at the present time.


EXTENSION OF BONUS ON WINTER HOUSE CONSTRUCTION
Mr. Scott: 1.	Has the government received representations from groups and/or individuals requesting an extension of the qualifying period for completing winter-built houses under the $500 bonus program and, if so, who were the groups, and/or individuals, making such representations?
2.	What was the government's response to such representations?


Mr. MacEachen:: 1. Representations have been received from the national house builders association and a few individuals requesting an extension of the period for completing houses being constructed under the winter house building incentive program.
2. That, since the program is designed to increase employment in the house building industry in the winter months, the date for final completion of houses will remain at March 31, 1964.
Questions



REPAIRS TO SUPPLY VESSEL &quot;NANOOK&quot;

['1. With reference to the proposed construction of a heavy water plant in Canada, what were the 5 points upon which the original tender proposals were to be predicated and did all of the four companies submitting proposals fulfil these requirements in their original submissions?\n\n2.\tWhich of the four companies originally submitting tenders prior to the closing date of May 31 proposed a combination heavy water-power plant?\n3.\tDoes the proposal of Deuterium of Canada Limited call for an integrated electric power and heavy water plant?\n4.\tIf so, which Nova Scotia utility company is involved in the production and distribution of this power?\n5.\tHow many tons of coal will be used by the plant per year?\n6.\tWill the government subsidize all coal used in such a combined or single plant?\n7.\tHow much subsidy will the federal government pay on the coal?\n8.\tWhich company will supply the coal for this plant and receive the government subsidy?\n9.\tWhich engineering firm will design and build the plant for Deuterium of Canada Limited?\n10.\tHas this engineering firm any experience in this field?\n11.\tHave the types of plant and process they intend to use ever been used commercially to produce heavy water?\n12.\tIf the engineering firm has not had any experience and/or the process has never been used commercially, does Deuterium of Canada Limited know what it will cost to design, build and operate this plant?\n13.\tWhat price per pound of heavy water did the respective bidders submit in their May 13 proposals?\n14.\tWhat price has been agreed to in the final arrangement with Deuterium of Canada Limited?\nAnswer: 1. (A) The five points are:\n(1)\tA.E.C.L. would make available by way of licence to any applicant the proposal of which was to be accepted Canadian patent No. 574293, issued on the 2nd day of April, 1959, relating to heavy water manufacture, on a royalty free basis to 1st June, 1970, but subject to the payment of a royalty of 2 per cent of sales price thereafter.\n(2)\tHeavy water would be required to be produced in such quantity as to guarantee a supply of not less than 200 tons per year for a period of five years dating from the commencement of delivery, the first complete lot of 200 tons to be available for delivery on or before the 31st day of March, 1966.\n(3)\tA.E.C.L. shall have the first option to purchase any part or all of the first 1,000 tons of heavy water produced, such option to be exercised from time to time as and when heavy water becomes available for delivery.\n(4)\tThe price per pound of heavy water that would apply for the first five years of production must be quoted f.o.b. plant in Canadian funds. A price of not more than $22 per pound would apply to all deliveries during the aforesaid five year period. In assessing proposals, the price or prices quoted will be an important factor in any decision that may be reached; no proposal to which a price in excess of $22 per pound is incidental will be considered.\n(5)\tIn addition to the price factor, the degree of Canadian participation in any such project\n\nwill have an important bearing on any decision reached by the government. Each proposal must, therefore, contain details disclosing\n(a)\tin the event the applicant is\n(i)\tan individual, the full name and address of such individual, his nationality and, if not a natural bom Canadian citizen, his country of origin and the name, (if other than his own), under which he carries on business;\n(ii)\ta partnership, the name under which the partnership carries on business, the full names and addresses, the nationality and, if not a natural born Canadian citizen, the country of origin of all partners; or\n(iii)\ta corporation, and if it is contemplated that the applicant, if not a corporation, will form a corporation for the purposes of the project, the head office of the corporation or projected corporation, the laws under which it was or would be incorporated, and the extent of Canadian participation in the capital structure and direction thereof;\n(b)\tthe sources of capital to which the applicant has immediate or potential access;\n(c)\tthe degree of Canadian content in terms of labour and materials that would be incidental to the construction and operation of the plant and facilities incidental thereto;\n(d)\tthe contemplated location of the plant;\n(e)\tthe size of the plant, in terms of output, including information with regard to any increase in size contemplated in the foreseeable future; and\n(f)\tthe source of energy for the operation of the plant.\n(B) No.\n2.\tDynamic Power Corporation specified the use of a combination heavy waterpower plant. Deuterium of Canada Limited and Western Deuterium Limited contemplated the possibility of using a combination heavy waterpower plant.\n3.\tSee 2. It is understood that the Nova Scotia power commission has undertaken to arrange for the supply of steam to Deuterium Canada Limited.\n4.\tSee answer to 3.\n5.\tIt is understood that approximately\n106,000\ttons per annum will be used to generate the steam for heavy water production.\n6.\tA residual fuel oil equalization payment could be payable under P.C. 1963-957 for all coal used in the power plant.\n7.\tThe residual fuel oil equalization payment will depend on (a) application being made, and (b) the rate would be approximately 90 cents per ton of coal under present conditions.\n8.\tNot known.\n9.\tNot known. Burns and Roe Inc. did the engineering submitted in the proposal.\n28902-5-356\nOrders for Returns\n10.\tYes.\n11.\tYes, such a type of plant has produced heavy water in commercial quantities, but improvements are contemplated.\n12.\tN/A.\n13.\tIn the case of two proposals the bids quoted were qualified by conditions that rendered it impossible to calculate the net price. The lowest price that met the conditions of the invitation, namely, $20.50 per pound, being the price quoted by Deuterium of Canada Limited, has already been made known.\n14.\t$20.50 per pound.']
George James McIlraith: Tenders due at 3 p.m. E.S.T. November 13, 1963, were called for repairs to C.C.G.S. Nanook. Tenders were received as follows: Ferguson Industries Ltd., Pictou, N.S., $88,173; Saint John Shipbuilding and Dry Dock Co., Ltd., East Saint John, N.B., $105,155; Halifax Shipyards, Halifax, N.S., $140,449.
No contract has been awarded as yet. Because of very extensive damage consideration is being given to whether the ship should be restored or modified for a different use.



Mr. Caouelte: 1.	What was the cost to the Canadian government of (a) the construction and installation (b) the operation and maintenance, of the St. Sylvestre radar station for each year to date?
2.	Since the establishment of this station, what was the total of the salaries paid (a) to persons of Quebec origin (b) to persons of origins of other provinces (c) to persons of foreign origin?
3.	What, if any, was the amount of American aid?


Mr. Cardin:: 1. (a) $2,196,000. (b) From 1954-55 to June 12, 1961, an average of $1,150,000 a year; from June 12, 1961, to date, an average of $1,670,000 a year.
2.	From 1954-55 to June 12, 1961, an average of $280,000 a year; from June 12, 1961, to date, an average of $285,000 a year.
The records contain no information as to the various pay schedules of civilian employees mentioned in (a), (b) and (c). However, according to a recent report, out of 91 civilian employees at the St. Sylvestre station, 90 come from Quebec and one from New Brunswick.
3.	Under the 1951 Pine Tree system agreement, total American aid was $14,900,000 as capital investment; and, from 1954-55 to June 12, 1961, an average of $710,000 a year for operation and maintenance. This last figure includes the $280,000 mentioned in reply to question 2 above.


INCREASED MEDICAL TRAINING FACILITIES
Mr. Orlikow: Have consultations been carried out with the provinces for the purpose of reviewing training facilities in medical schools and in particular to (a) determine the extent of the need for increased medical training facilities (b) consider additional financial subsidies as an incentive to increase the

Questions
training facilities (c) institute long range planning for coping with the growing shortage of medical personnel in the years ahead?


Miss LaMarsh:: A major study supported by the royal commission on health services was concerned with medical education. It is understood that the commission has received the report and will probably be commenting on its findings.
The importance of training arrangements for a great many of the health professions received consideration in briefs submitted to the royal commission. When the comments of the commission have been received on medical education, they will be thoroughly studied by the department.


MALE NURSES IN ARMED FORCES
Mr. Scoll: Do the Canadian armed forces permit male nurses to enlist in said armed forces and, if not, for what reasons are they prohibited from enlisting?
Answer: Male registered nurses are not accepted for commissioning in the nursing branch of the Canadian forces medical service for administrative reasons which have been explained to the male nurses' committee of the registered nurses' association of Ontario. However, serving male personnel with the necessary technical and personal qualifications may progress to commissioned rank in the medical administrative field.


INFANT MORTALITY AMONG ESKIMOS AND INDIANS
Mr. Orlikow: What is the infant mortality rate (the number of deaths among each thousand babies born alive) among the Indian and Eskimo people in Canada?


Julia Verlyn (Judy) LaMarsh: Infant mortality per 1,000 live births during the past 3 years:
1960	1961	1962Indian	79.0	76.2	74.7Eskimo	210	185	193


LIFE EXPECTANCY OF ESKIMOS AND INDIANS
Mr. Orlikow: What is the life expectancy at birth for males and females in Canada of Indian and Eskimo origin?


Julia Verlyn (Judy) LaMarsh: The data on Eskimos is not exact enough to permit a precise estimate of a true life expectancy index, but a rough estimate places it between 30 and 40 years, probably nearer 30 than 40.
An estimate based on mortality experience in 1961 and 1962 would place the life expectancy at birth of a female Indian at 57-59 years and a male Indian at 54-63 years.


REVENUES FROM U.S. OIL INVESTMENTS IN CANADA
Mr. Laiulippe: Does the federal government derive any benefit from American investments in the oil companies in Canada and, if so (a) in which provinces, and in what amounts for the last three years (b) what are the revenues from the properties involved (c) what were the American investments in oil properties or companies in Canada during the last five years?

Answer: (a) and (b). Data are not available in the form requested. The federal government derives benefits from United States investments in the oil companies established in Canada, just as it does from other companies in Canada, whether they are Canadian or foreign companies, (c) In the main, the book value of United States investments in the Canadian oil and gas industry increased from $2,063 million at the end of 1956 to $3,434 million at the end of 1961. That increase includes new capital of American origin as well as accrued profits of United States investors. The capital expenditures made by companies in question, in the country itself, can be financed also through depreciation and depletion allowances, and through capital obtained in Canada.


STUDY OF AIR AND WATER POLLUTION
Mr. Latulippe: 1.	Are funds voted to the Department of National Health and Welfare for the study of air and water pollution in Canada and, if so, what is the amount of those funds and, how are they divided?
2.	How many employees are working on this problem?
3.	Does the department intend to complete such studies of this matter before long?
4.	Is there any federal-provincial co-operation with regard to the study of this matter and, if so, what form does it take?


Julia Verlyn (Judy) LaMarsh: 1. Yes. Funds for the study of air and water pollution are provided in the 1963-64 estimates of the Department of National Health and Welfare. These studies involve the occupational health division, the public health engineering division and the sanitary bacteriology section of the laboratory of hygiene. Expenditures of approximately $85,000 relate to air pollution and $60,000 to water pollution.
2.	Fourteen employees are working on air pollution studies, six engaged full time and eight part time. Twenty employees are working part time on water pollution studies.
3.	Air and water pollution studies are continuing programs.
4.	There is close federal-provincial cooperation in the organization, planning and conduct of air and water pollution studies.

Questions
Assistance is being provided by the federal government under the national health grants and, on request of the provinces, services of the Department of National Health and Welfare are made available for analysis and special projects to supplement provincial facilities.


CANADIAN RELATIONS WITH BOLIVIA
Mr. Lalulippe: 1.	How many Canadian citizens are living in Bolivia at the present time?
2.	What branch of the Canadian embassy in Bolivia deals with Canadian missionaries in that country?
3.	What are the main commercial relations between Canada and Bolivia and what amounts have been involved in the last three years?
4.	What Canadian companies own property in that country?
5.	What is the approximate value of such properties?


Mr. Martin (Essex East):: 1. There are approximately 100 Canadian citizens who reside in Bolivia at the moment, and whose names are written down on the registers of the Canadian embassy.
2.	The Canadian ambassador in Peru is also accredited as Canadian ambassador in Bolivia; there is no branch of the Canadian embassy in Bolivia. At La Paz, it is the British embassy who supervises, at the local and immediate levels, the interests and the property of Canadian citizens, and naturally, of Canadian missionaries.
3.	The commercial relations between Canada and Bolivia are regulated by the clause of the most favoured nation. This privilege has been granted by Canada by an order in council dated June 20, 1935.
The amounts involved in the last three years are as follows:
	Imports	Exports
	from	to
	Bolivia	Bolivia
I960	$ 433,000	$ 323,0001961	883,000	353,0001962	957,000	362,0004.	There are no official registers kept by the government and relating to Canadian investments in Bolivia, with the exception of confidential information.5.	(See 4).


STEEL EXPORTS TO AMERICAN MOTORS CO.
Mr. Lalulippe: 1.	Has Canada exported any steel to the American Motors Company since June, 1961 and, if so, how many tons and what was its value?
2.	In what provinces did these exports originate?
3.	What revenue has the government derived from these exports since 1961?

Answer:	The information requested in
questions 1, 2 and 3 cannot be supplied because in the Statistics Act, the section concerning secrecy prohibits the disclosure of information which would reveal details about an individual or a particular business.


*LAST SHIPS OUT OP CHURCHILL
Mr. Diefenbaker: 1.	On what date this fall did the last ship leave the port of Churchill?
2.	What were the names of the last five ships to depart, and the respective dates of sailing?
3.	Did any of the said ships suffer ice or other damage and, if so, what are the particulars thereof?


Mr. Canlin:: The national harbours board advises as follows:
1.	October 20, 1963.
2.	M.V. Camellia, October 5, 1963; M.V.
Sills, October 5,	1963; M.V. Meerdrecht,
October 8, 1963; M.V. Warkworth, October 12, 1963; M.V. Deborah, October 20, 1963.
3.	No ice or other damage to the above named ships has been reported to government agencies.


* INCOME TAX LIABILITY ON AWARD TO NAZI VICTIM
Mr. Fairweather: Has the government reviewed the ruling of the income tax appeal board published on November 28, 1963 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 and, if so. is any legislative or other action contemplated to nullify the effect of said ruling?


Mr. Garland:: By judgment rendered on September 11, 1963 the tax appeal board decided that the life annuity payable to Phillip Koller by the government of West Germany is properly subject to tax under the Income Tax Act. To exempt this type of annuity from tax would require an amendment to the legislation which would ordinarily be introduced by the Minister of Finance.


APPLICATIONS FOR INCREASED BROADCASTING POWER
Mr. Rideout: 1.	Did the letter of Messrs. Stewart, Jamieson and Ouimet, addressed to the Secretary of State and tabled in this house on October 1, 1963 have any bearing on applications for increases in broadcasting station power output?
2.	Is the board of broadcast governors now hearing any applications for increase in power, the granting of which would result in wider broadcasting coverage and, if not, when will such applications be heard?
3.	Will the Department of Transport at present accept applications for increases in broadcasting power and, if not, on what date will the department again accept such applications?

Questions


John Whitney Pickersgill: 1. Yes. The recommendation regarding applications tor television licences was intended to apply to applications for increases in power in so far as these would result in the extension of alternative television service.
2.	No. Such applications would not be heard until after July 1, 1964.
3.	While the department would not refuse applications for technical consideration it is not passing them on to the board of broadcast governors as there seems to be no object in doing this until such time as the board is once more prepared to hear them.


APPLICATION FOR GRANTS FOR COLD STORAGE WAREHOUSE, NORTHWESTERN QUEBEC
Mr. Laprise: Were applications received, during the present year, from the government of Quebec or other organizations for grants toward the construction of a cold storage warehouse in northwest Quebec?


Mr. Hays:: No.


*C.B.C. SCHOLARSHIP GRANTS
Mr. Pigeon: 1.	Did the Canadian Broadcasting Corporation grant scholarships during 1963 to students who were the winners in such programs as "Affrontement de colleges" and, if so (a) what amount has been granted to date (b) what is the number of scholarships granted to date?
2.	Were the provinces consulted before such scholarships were granted?


Yvon Dupuis: I am informed by the Canadian Broadcasting Corporation as follows:
1.	The C.B.C. French television network carries an educational quiz program called F-MA in which teams of students representing classical colleges participate. Cash awards are given as prizes to competing teams to be used at the discretion of the student councils of colleges to provide scholarships for worthy students.
(a) and (b). From February 3, 1963, when the program started, to June 2, and from October 27 to December 1, 48 cash awards amounting to $11,450 have been given by the C.B.C. to competing teams.
2.	No. The choice of the teams is made in close consultation with the Federation des colleges classiques, which is a private organization.


HEAVY WATER PLANT
Mr. Thompson: 1. With reference to the proposed construction of a heavy water plant in Canada, what were the 5 points upon which the original tender proposals were to be predicated and did all of the four companies submitting proposals fulfil these requirements in their original submissions?

2.	Which of the four companies originally submitting tenders prior to the closing date of May 31 proposed a combination heavy water-power plant?
3.	Does the proposal of Deuterium of Canada Limited call for an integrated electric power and heavy water plant?
4.	If so, which Nova Scotia utility company is involved in the production and distribution of this power?
5.	How many tons of coal will be used by the plant per year?
6.	Will the government subsidize all coal used in such a combined or single plant?
7.	How much subsidy will the federal government pay on the coal?
8.	Which company will supply the coal for this plant and receive the government subsidy?
9.	Which engineering firm will design and build the plant for Deuterium of Canada Limited?
10.	Has this engineering firm any experience in this field?
11.	Have the types of plant and process they intend to use ever been used commercially to produce heavy water?
12.	If the engineering firm has not had any experience and/or the process has never been used commercially, does Deuterium of Canada Limited know what it will cost to design, build and operate this plant?
13.	What price per pound of heavy water did the respective bidders submit in their May 13 proposals?
14.	What price has been agreed to in the final arrangement with Deuterium of Canada Limited?
Answer: 1. (A) The five points are:
(1)	A.E.C.L. would make available by way of licence to any applicant the proposal of which was to be accepted Canadian patent No. 574293, issued on the 2nd day of April, 1959, relating to heavy water manufacture, on a royalty free basis to 1st June, 1970, but subject to the payment of a royalty of 2 per cent of sales price thereafter.
(2)	Heavy water would be required to be produced in such quantity as to guarantee a supply of not less than 200 tons per year for a period of five years dating from the commencement of delivery, the first complete lot of 200 tons to be available for delivery on or before the 31st day of March, 1966.
(3)	A.E.C.L. shall have the first option to purchase any part or all of the first 1,000 tons of heavy water produced, such option to be exercised from time to time as and when heavy water becomes available for delivery.
(4)	The price per pound of heavy water that would apply for the first five years of production must be quoted f.o.b. plant in Canadian funds. A price of not more than $22 per pound would apply to all deliveries during the aforesaid five year period. In assessing proposals, the price or prices quoted will be an important factor in any decision that may be reached; no proposal to which a price in excess of $22 per pound is incidental will be considered.
(5)	In addition to the price factor, the degree of Canadian participation in any such project

will have an important bearing on any decision reached by the government. Each proposal must, therefore, contain details disclosing
(a)	in the event the applicant is
(i)	an individual, the full name and address of such individual, his nationality and, if not a natural bom Canadian citizen, his country of origin and the name, (if other than his own), under which he carries on business;
(ii)	a partnership, the name under which the partnership carries on business, the full names and addresses, the nationality and, if not a natural born Canadian citizen, the country of origin of all partners; or
(iii)	a corporation, and if it is contemplated that the applicant, if not a corporation, will form a corporation for the purposes of the project, the head office of the corporation or projected corporation, the laws under which it was or would be incorporated, and the extent of Canadian participation in the capital structure and direction thereof;
(b)	the sources of capital to which the applicant has immediate or potential access;
(c)	the degree of Canadian content in terms of labour and materials that would be incidental to the construction and operation of the plant and facilities incidental thereto;
(d)	the contemplated location of the plant;
(e)	the size of the plant, in terms of output, including information with regard to any increase in size contemplated in the foreseeable future; and
(f)	the source of energy for the operation of the plant.
(B) No.
2.	Dynamic Power Corporation specified the use of a combination heavy waterpower plant. Deuterium of Canada Limited and Western Deuterium Limited contemplated the possibility of using a combination heavy waterpower plant.
3.	See 2. It is understood that the Nova Scotia power commission has undertaken to arrange for the supply of steam to Deuterium Canada Limited.
4.	See answer to 3.
5.	It is understood that approximately
106,000	tons per annum will be used to generate the steam for heavy water production.
6.	A residual fuel oil equalization payment could be payable under P.C. 1963-957 for all coal used in the power plant.
7.	The residual fuel oil equalization payment will depend on (a) application being made, and (b) the rate would be approximately 90 cents per ton of coal under present conditions.
8.	Not known.
9.	Not known. Burns and Roe Inc. did the engineering submitted in the proposal.
28902-5-356
Orders for Returns
10.	Yes.
11.	Yes, such a type of plant has produced heavy water in commercial quantities, but improvements are contemplated.
12.	N/A.
13.	In the case of two proposals the bids quoted were qualified by conditions that rendered it impossible to calculate the net price. The lowest price that met the conditions of the invitation, namely, $20.50 per pound, being the price quoted by Deuterium of Canada Limited, has already been made known.
14.	$20.50 per pound.



QUESTIONS PASSED AS ORDERS FOR RETURNS


YUKON TERRITORY


Mr. Nielsen: With respect to the operations of the Department of Public Works in the Yukon Territory since April 8, 1963 (i) how many contracts have been entered into by the Department of Public Works with any person, firm, or corporation, for the construction of public works, the performance of services, the supply of goods, or the acquisition of buildings, or works by the government, any agency thereof, or, any crown corporation (ii) to which persons, firms, or corporations were such contracts awarded (iii) in the case of each contract, what was the contract price or cost (iv) in the case of each contract, was there a public tender called (v) in the case of any of such contracts where there were no public tenders called, why were such tenders not called (vi) in the case of any such contracts for which no public tenders were called, to which person, firm or corporation were the contracts awarded (vii) in the case of any such contracts where there were no public tenders called, by what authority were the same awarded (viii) in the case of any such contracts, did any of them remain incompleted and, if so, what was the reason (ix) in the case of any such contracts which have not been completed, is it the intention of the government to have the same completed and, if so, by whom (x) in the case of any such contracts which remain incomplete and which the government intends to have completed, what will be the additional cost of completion, if any, in each case?
Return tabled.



UNEMPLOYMENT INSURANCE COMMISSION BOARDS OF REFEREES

Mr. Barneii: 1.	How many boards of referees, as established by the unemployment insurance commission, are in existence in Canada?
2.	In what city or locality does each of these boards of referees have its headquarters?
3.	Over what geographic area does each of these boards of referees exercise jurisdiction?
4.	What remuneration is currently being paid (a) to chairmen (b) to other members of boards of referees?
5.	During each of the last three fiscal years, what was the cost of operation of each of the boards of referees in Canada?
Return tabled.

Inquiries of the Ministry



HISTORIC SITES AND MONUMENTS


[Stage Direction]
Oh the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, in the absence of the hon. member for Prince Edward-Lennox (Mr. Alkenbrack) who is most interested in this question, and in view of the urgency of inquiry being made, I would like to ask the Acting Prime Minister, since the home of Sir John Macdonald at Kingston is now for sale, whether the government would consider taking action to secure this home as a national memorial, where Canadians could do honour to one of the great architects of confederation.


Hon. Lionel Chevrier (Acting Prime Minister):: Mr. Speaker, I think the question the right hon. gentleman has put is a reasonable one which should be given consideration by the government, and it is one which I shall ask my colleague the minister of northern affairs to give his attention to at once. I shall also draw it to the Prime Minister's attention as soon as he returns.



REPORTED INTENTION OF B.C. COMPANY TO FREEZE PRICES AT PEAK

[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquiilam):: Mr. Speaker, may I direct a question to the Minister of Justice. I wonder whether he noted in this morning's paper the report of the B.C. Sugar Refining Co. Ltd. who, in their annual report, show a net profit of $2,780,000, which is an increase of $591,000 over the previous year. In this report the president of the company also says it is the intention of his company to freeze sugar prices as of October 18 which, if I recall correctly, was when they were at their peak.
I believe the restrictive trade practices branch was going to look into the question of sugar prices to see if there was any collusion about price fixing. Will the minister undertake to have this matter gone into at the same time?


Lionel Chevrier: Yes, Mr. Speaker. I have not had the report to which the hon. member refers brought to my attention until now, but I shall draw it to the attention of the director of research in the combines investigation branch.


Thomas Clement (Tommy) Douglas: As a supplementary question, how soon does the minister expect to be able to make some statement as a result of the investigation of the restrictive trade practices branch into this whole question of sugar prices?
[Mr. Barnett. I


Lionel Chevrier: There are two ways in which this can be done. I have not disposed of my estimates yet. The house has not been too generous with item No. 1, although I must say hon. members were very kind in their reception of the statement on security. The other manner in which it could be disposed of is by a report but, as my hon. friend knows, no information is made public until such time as a report has been made, and I shall have to ascertain from the director whether a report is about to be issued or not.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Secretary of State for External Affairs. Would the minister mind informing the house what progress he is making with respect to the sale of the Columbia river to the United States?


Paul Joseph James Martin: Mr. Speaker, I presume what the hon. gentleman had in mind was what progress was being made in the discussions which have to do with the Columbia river treaty project. These discussions began this morning. They will be resumed at 3.30 p.m. and will be continued later in the day, and perhaps tomorrow.



TRANS-CANADA AIR LINES POSSIBLE LEGAL ACTION AGAINST PRESIDENT BY SUD AVIATION

[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, I should like to put a question to the Minister of Justice. In view of the fact that Sud Aviation will probably sue the president of T.C.A., does the minister intend to take the necessary steps to prevent T.C.A. from being sued jointly and severally?


Lionel Chevrier: Mr. Speaker, like my hon. friend, I listened very closely to the announcement which was made on the radio this morning concerning the possibility of a lawsuit. However, before I do anything, I shall wait to see how things turn out because the hon. member's question is highly hypothetical.


Gilles Grégoire: Mr. Speaker, I have a
supplementary question. I asked the Minister of Justice more particularly whether he intended to take the necessary steps to

prevent T.C.A. from being sued jointly and severally, if such legal action were taken?


Mr. Speaker:: Order. This question is hypothetical.


Mr. R. W. Prillie (Burnaby-Richmond):: supplementary question, Mr. Speaker. Does the Minister of Justice think the hon. member for Lapointe should be included in the action for having provoked these outbursts?


Gilles Grégoire: Mr. Speaker, my question is not hypothetical. It is just that I would not want T.C.A. to be involved, if such legal action were taken.


Mr. Speaker:: Order. I said the question was hypothetical; and if it was not hypothetical, it was certainly largely imaginary as of the moment.


Mr. Maurice Cole (Chicoutimi):: Mr. Speaker, I should like to direct a question to the Minister of Transport, but in his absence I shall put it to the Acting Prime Minister.
Following the statements of Mr. McGregor, president of T.C.A., to the effect that he would no longer submit plans for the purchase of aircraft for government approval, can the Acting Prime Minister assure the house that this same Mr. McGregor will no longer ask parliament to make up the deficits of T.C.A.?


Lionel Chevrier: Mr. Speaker, I think that a somewhat similar question was put to the Prime Minister last week and he replied at that time that he would like to read the report of the sessional committee on railways, air lines and shipping before making a statement in this connection. Personally, I have nothing to add to that statement.



REQUEST FOR APPOINTMENT OF FRENCH SPEAKING DIRECTORS

[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolielle-L'Assomplion-Montcalm):: Mr. Speaker, I would like to direct my question to the Acting Prime Minister. Is it the intention of the government to rectify the situation which prevails at T.C.A. and to suggest the appointment of some French speaking directors, since there are none at the present time?


Lionel Chevrier: Mr. Speaker, I thank the hon. member
28902-5-3561
Inquiries of the Ministry for Joliette-L'Assomption-Montcalm for having asked that question. The government will consider that matter in due course.


Louis-Joseph Pigeon: Mr. Speaker, I have a supplementary question. In view of the false statements made by Mr. McGregor, president of T.C.A., with respect to the Caravelle, is it the intention of the government to suspend the president of that company, who contributes to the deterioration of relations between France and Canada?


Lionel Chevrier: Mr. Speaker, I believe that that question is definitely out of order, as it contains in its preamble words and epithets which are contrary to the standing orders.


Gilles Grégoire: Mr. Speaker, I should like to ask a supplementary question. I would like to know what the Acting Prime Minister means by in due course? When he says that he will consider the appointment of the French speaking directors in due course, what does he mean by that?


Lionel Chevrier: These words are clear and precise and I am quite sure that my hon. friend understands their meaning.


Gilles Grégoire: That is a loophole.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Barry Maiher (New Westminster):: Mr. Speaker, I have a question I would like to ask the Secretary of State for External Affairs. It was announced over the week end that President Johnson of the United States has ordered an early start to be made in negotiations for a new Soviet-American cultural agreement. My question is, is Canada giving thought to making an early effort toward reaching a similar agreement?


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, I thank the hon. gentleman for giving me notice of his question. The government attaches importance to the cultural exchanges between Canada and the Soviet union on a basis of fair and reasonable reciprocity, and welcomes the progress which has already been made in this direction. The Canadian embassy in Moscow has been active in facilitating these exchanges. The question of further development of reciprocal exchanges is under study and the possibility of an agreement is not excluded. On the other hand, hon. members will appreciate that there are a number of implications, financial, administrative and other, which are receiving attention.

Inquiries of the Ministry


CUBA-APPEAL OF CANADIAN AGAINST SENTENCE
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I hope the hon. gentleman will be less prolix in answering the question I am about to ask. Has the minister had any word from the government of Cuba relative to the appeal on behalf of the Canadian who was sentenced to 30 years imprisonment?


Paul Joseph James Martin: Mr. Speaker, the appeal was disallowed and the government is giving this matter consideration. I have to see the Cuban ambassador later today.


John George Diefenbaker: On what date was the disallowance; is the minister in a position to say that?


Paul Joseph James Martin: I think it was on Friday, Mr. Speaker. I am not sure; it was Thursday or Friday.


UNITED STATES
[Stage Direction]
On the orders of the day:
Mr. Marcel Lessard (Lake St. John):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. What steps does he intend to take to inform the government of the United States that, for some years, we have had general elections in Canada, that the hon. member is himself Secretary of State for External Affairs and that the Prime Minister of Canada is the Right Hon. Lester B. Pearson?


Paul Joseph James Martin: Mr. Speaker, I think that the facts upon which my hon. friend has based his question are very well known, not only to the officials of the United States' government, but by all Canadians as well. Actually, everybody knows that the present Prime Minister is the head of the Canadian government and that he has done much to maintain peace and encourage friendly relations between Canada and other countries.


Hon. Paul Martineau (Poniiac-Temisca-mingue):: I wonder if the minister would inform Mr. Pierre Salinger of what he has just stated.


Mr. George Muir (Lisgar):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It has been partially answered in response to a previous question, but would he tell the house whether he would be willing to inform the President of the United States that the Prime Minister is not

the foreign minister of Canada but is serving temporarily as its Prime Minister?


Paul Joseph James Martin: Mr. Speaker, I welcome this question because it gives me the opportunity to say it was quite apparent two weeks ago when the Prime Minister was in Washington that the new President of the United States regarded him as a very important spokesman in matters which concern not only our two countries but the peace of the world, because the Prime Minister was the second head of government to be received by the new President.


BOLIVIA
[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. Can he give the house any information regarding the three Canadians who are allegedly being held as hostages by certain elements of the population in Bolivia?


Hon. Paul  Marlin@Secrelary of Stale for External A.ffairs: Mr. Speaker, in answer to this question I may say that the British ambassador in Bolivia, with whom we have been in close touch, Canada not having a mission there, has confirmed the news reported by the press that a number of persons, including three Canadians and four United States citizens, have been forcibly detained by striking miners in Bolivia. Both the press and the ambassador have identified two of the Canadians as Raymond Brousseau and Aurele Falar-deaux, both presumed to be from Kirkland Lake, Ontario. The name of James McNamee of Kingston, Ontario, has also been given in the press but this has not yet been confirmed by the British ambassador. Although it is not certain, there was a report from the British ambassador that Robert Morrison of Ottawa was detained, but a later report now says that he has been released.
It appears that some but not necessarily all of the 21 persons detained by the miners are being held as hostages in order to secure the release by the Bolivian government of two trade union leaders. We have asked the British ambassador to call again on the Bolivian government with instructions to make strong representations to that government to ensure the safety and the release of the Canadians.
Our ambassador in Peru, who is also accredited to Bolivia, is going to La Paz tomorrow morning, the earliest time he can reach that city, and he will of course do everything possible to help the Canadians who have been detained.


TRADE WHEAT  LOSS RESULTING FROM CONTAMINATED SHIPMENTS
[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I would like to address a question to the Minister of Trade and Commerce and ask him what the current situation is with regard to the contamination found in several cargoes of Canadian wheat. I would also ask him whether these can be cleaned. If not, will the loss be charged to the Canadian wheat board fund, or who will suffer this loss?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: Mr. Speaker, there have been no claims against the Canadian wheat board by any of the recipients of this grain. My colleague the Minister of Transport has been in charge of a thorough inquiry into the causes of the glass being found in the grain. It would be possible for the Minister of Transport to make a statement when he returns on Thursday. I could also make a statement, if the hon. gentleman would like to have it, before that time.


TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, I have a question for the Minister of Transport, but in his absence may I direct it to the acting minister.


John Whitney Pickersgill: I am the acting minister.


Robert Muir: Is the acting minister in a position today to inform the house which mainland port this government is going to designate for the new proposed ferry to Argentia, Newfoundland? As the Secretary of State is the acting minister, I am sure he will have a very good answer for us today since he is from the Atlantic provinces.


John Whitney Pickersgill: Mr. Speaker, I do not think a definitive reply can be made until the Minister of Transport is back in his place.


NATIONAL DEFENCE
[Stage Direction]
On the orders of the day:
Mr. Jack A. Irvine (London):: Mr. Speaker, may I direct a question to the Minister of National Defence. What disposition is to be made of buildings and property to be closed
Inquiries of the Ministry out by the Department of National Defence, particularly H.M.C.S. Prevost, London? Are they to be declared surplus and sold?


Mr. Speaker:: That is a question for the order paper.


POLICY STATEMENTS BY MEMBERS OF ARMED FORCES
[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Minister of National Defence. It has reference to the appearance last Friday of Group Captain Lee, who I believe is the minister's public relations officer, on a national television network. In view of this appearance can the minister say whether it is government policy to permit serving officers or men to state or explain government policy announcements?


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, it was not a national network but rather just a local network, and he was explaining the effect of the changes on this immediate area. In view of the pressures of the day and as Group Captain Lee is associated with my office, I authorized him to make that statement on my behalf.


Thomas Clement (Tommy) Douglas: A supplementary question along the same lines, Mr. Speaker. Has the minister's attention been drawn to the article which appeared on the front page of Saturday's Ottawa Citizen quoting an informed source as giving information regarding certain intended reductions in defence expenditures? I am not objecting to the reductions in defence expenditures, but I want to ask the minister if this informed source is the same gentleman to whom reference has just been made. The article appears under the by-line of Mr. Dave McIntosh, and there have been similar articles in the past which have turned out to be very accurate. Are these statements coming from this gentleman in the defence minister's office?


Paul Theodore Hellyer: Mr. Speaker, that would not be the same source, because that one was not very well informed. As I indicated in my statement to the house, there are some adjustments which will be announced following consultation, but they are minor adjustments. This particular story is a very great exaggeration of anything that would be contemplated.


Erik Nielsen: A supplementary question, Mr. Speaker. In view of the minister's reply, could he inform the house whether government policy with respect to serving members of the forces has now been changed so that they can explain or state government policy?

Inquiries of the Ministry


Paul Theodore Hellyer: There has never been any prohibition since this government took office against service officers explaining matters of detail having to do with service requirements.


Mr. Donald Maclnnis (Cape Breton South):: A further supplementary question, Mr. Speaker. Is the Minister of National Defence, of all ministers, not aware of the restrictions placed on serving officers by their own rules and regulations?


John George Diefenbaker: I should like to ask the Minister of National Defence whether it is now in order for any regular officers in the armed forces to make observations and public statements regarding matters that are controversial. I might also ask him if this Group Captain Lee, who was very recently a wing commander, is now public relations officer to the minister?


Paul Theodore Hellyer: As I said earlier, Mr. Speaker, there has been no determination that serving officers are not to give to the public information of a factual nature having to do with their duties. I cannot say whether or not this was the practice under the previous administration, but I have some reason to believe it was not. However, it always has been since the change in government.
Group Captain Lee is a special assistant in my office, and in carrying out his duties he is often called upon to amplify statements of fact in respect of determined policy. What he was doing the other day was strictly in line with his duties.


John George Diefenbaker: Will he be interpreting for the minister? Will he be this silent source of certain information that goes to the press?


Paul Theodore Hellyer: I resent the implication here. This is a job which is carried out in many departments and is necessary to the proper administration of the department in providing information to the various media, as well as conducting other office routine on behalf of the minister. It is a function which is carried out in all ministers' offices. I would not want the implication to be carried abroad that there was anything unusual in the carrying out of these duties by Group Captain Lee who, incidentally, carries out his duties well.


John George Diefenbaker: I simply ask the minister this. Can he point to one example, under the British parliamentary system, where a serving officer becomes an interpreter for a minister?


Thomas Clement (Tommy) Douglas: May I ask a supplementary question?


Mr. Woolliams:: Let him answer that one.


Malcolm MacInnis: May I ask the minister if he is aware of the fact that in the defence committee when questions are put to serving officers which touch upon matters of policy, the serving officers will not attempt an answer?


Paul Theodore Hellyer: Mr. Speaker, I think if you will examine the evidence given before this special committee on defence by the chiefs of the three services, you will find that there are rare occasions when there was any interference in respect of answering questions, and then only when they related to matters of unresolved government policy when the minister, who has the responsibility, took over the questions.


Thomas Clement (Tommy) Douglas: May I ask a supplementary question. Would the minister agree that the functions of such an officer are certainly not to announce any reductions in expenditures, which ought to be done by the minister in this house?


Paul Theodore Hellyer: Quite so; and none was, I can assure you.


Erik Nielsen: I have a further question to the Minister of National Defence. I wonder if the minister could inform the house whether Group Captain Lee is paid by the government, by the air force, or by the minister? Will the minister, when he answers, say whether Group Captain Lee is still a serving officer or a politician's aide?


Paul Theodore Hellyer: Mr. Speaker, I object to this question, to the manner in which it was put forward. Group Captain Lee is paid by the Royal Canadian Air Force and his pay, like the pay of all other personnel, civilian or service, in the department, comes out of departmental appropriations. I might say, for my hon. friend's benefit, that this is not a precedent. The previous minister of national defence had a special assistant, Lieutenant Colonel Christian, who was seconded to the minister's office. There have also been precedents for serving officers making statements. When the previous administration was in office Vice Admiral Brock went on television to explain certain developments, and I think it should be set clear nothing we have done in recent times is in any way a precedent which is not in accordance with parliamentary principles and practices.


Malcolm MacInnis: Mr. Speaker, a question for the Minister of National Defence. At future meetings of the defence committee will it be the prerogative of the defence committee members to insist upon an answer from any witness that may appear-


Some hon. Members:: Order paper.


Mr. Byrne:: Mr. Speaker, I submit that this is a hypothetical question dealing with questions committee members might be asking.


Mr. Speaker:: The hon. member was halt way through his question, and I was waiting for the whole question to decide whether it was in order.


Malcolm MacInnis: I was waiting for a little order so I could make myself heard. The hon. member for Kootenay East rose to his feet, again without recognition from the Chair, which is a habit on that side. My question to the minister was this. At future meetings of the defence committee will members of that committee be in a position to insist upon an answer from any witnesses appearing, when they make the statement that they do not want to answer because it is a matter of policy?


Paul Theodore Hellyer: Mr. Speaker, it would depend on the witness. If he was a serving officer he would be required to answer questions of fact.


ADOPTION OF RECOMMENDATIONS OF GLASSCO COMMISSION
[Stage Direction]
On the orders of the day:
Marcel Lessard: Mr. Speaker, I should like to direct a question to the President of the Privy Council.
Since the Prime Minister made him responsible for the implementation of the Glassco commission report, could the President of the Privy Council inform the house whether he made recommendations to the Minister of National Defence regarding improvements to and even a reorganization of his department in order to cut down administration costs as it was done recently in other sections of that department? Did the President of the Privy Council make recommendations to the Minister of National Defence on that matter?


Hon. Maurice Lamonlagne (President of the Privy Council):: No, Mr. Speaker.


FLIGHTS OF NUCLEAR ARMED U.S. PLANES OVER CANADA
[Stage Direction]
On the orders of the day:
ITranslation1
Louis-Joseph Pigeon: Mr. Speaker, may I put a question to the Minister of National Defence?
Can the minister tell the house whether U.S. bombers equipped with nuclear weapons are authorized to fly over Canadian territory and to use Canadian bases?


Paul Theodore Hellyer: Mr. Speaker, there are intergovern-
Inquiries of the Ministry mental agreements in respect to the use of Canadian air space by United States aircraft. If the hon. gentleman is referring specifically to the strategic air command, they do fly certain flights over Canadian air space flom time to time by authority of the Canadian government.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, it has always been my understanding that even under that agreement they have to have prior permission from Canada for all individual flights.


Paul Theodore Hellyer: That is correct. Every individual flight is cleared on a daily basis.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Eldon Mattison Woolliams: should like to address a question to the Minister of Justice. Some two weeks ago the hon. gentleman's parliamentary secretary said a report would be made with reference to Banks leaving the jurisdiction while on bail. Could we be graced by that report now? Further, when will Banks be brought to trial?


Lionel Chevrier: As to the last part of the question, the hon. member probably knows that counsel appeared before the judge in Montreal and a date for the trial was fixed. I do not have the date in my memory now, but I believe it is some time early this month. As far as the first part of the question is concerned, I will have to make inquiries.



ALLEGED MISCARRIAGE IN COFFIN CASE

[Stage Direction]
On the orders of the day:
Mr. Gerard Girouard (Labelle):: Mr. Speaker, I should like to ask the Minister of Justice a question.
Since the charges made by Jacques Hebert concerning the Coffin case do not concern only the administration of justice, as the minister indicated last week, but also concern directly the criminal law; in short, since that charge is laid against an indictment based on circumstantial evidence, does not the minister think that his department should make its own investigation in order to give reassurance to the Canadian people with regard to the conclusiveness of well-founded circumstantial evidence? I might add that this seems to be the opinion in the broad legal circles in which I move.


Lionel Chevrier: Mr. Speaker, the hon. member is to be congratulated for moving in such broad legal

Inquiries of the Ministry circles. However, I have to tell him that I have nothing to add to the answer I gave last week concerning this case, because everything that happened in the past, both in the procedures and at the trial, took place under provincial jurisdiction. Although the Criminal Code is enacted and approved by this house, the fact remains that the matter, as far as the administration of justice is concerned, comes under the provinces.
However, I might add that Mr. Hebert has been kind enough to send me a copy of his book and I have asked officers of my department to be good enough to read it-as a matter of fact, I am reading it myself- and to please bring to my attention any aspect of this matter which could come under federal jurisdiction. When I get that report, I shall take this question into consideration.


Gilles Grégoire: Mr. Speaker, I should like to ask a supplementary question on this matter, precisely the question I asked the other day in the absence of the Minister of Justice.
Since a crown corporation which is responsible to the federal government-the C.B.C.- undertook a public investigation of the Coffin case on television, is the Minister of Justice of the opinion that this corporation should have the help of experts and officers of his department?


Lionel Chevrier: Mr. Speaker, I think this does not change at all the answer I have just given, because if this crown corporation decides by itself to present a program on television, it is its business and the government has no reason to interfere with the internal operations of this corporation as it was announced on many occasions by the Secretary of State.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Gene Rheaume (Northwest Territories):: I wish to direct a question to the Acting Prime Minister. In view of the endorsation by the Prime Minister of a certain book over the week end, could the hon. gentleman tell the house by how much this publication was subsidized by the Liberal party of Canada?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Lawrence E. Kindt (Macleod):: In the
light of the declaration by the leader of the Social Credit party last Thursday that he and his group would support the government on condition that plans to promote full employment for all Canadians were put into effect,

will the Acting Prime Minister now inform the house of the government's plans for full employment and tell us when they will be placed before parliament?


Lionel Chevrier: I think the answer to that question is clear. All one has to do is look at the things which have been done by the government thus far and compare this with the present economic activity of the country so as to ascertain what has been done by the government in this respect.


Lawrence Elliott Kindt: A supplementary question. Were the remarks of the Acting Prime Minister based on employment figures as given by the dominion bureau of statistics, and was his comparison made in relation to former periods comparable with the present period?


Lionel Chevrier: Although this is a matter of debate, I do not hesitate to tell the hon. member that first of all it has to do with the gross national product, which is on the increase as my hon. friend should know-


Erik Nielsen: Less than last year.


Lionel Chevrier: -and also with the unemployment figures, which show an improvement compared with the same period last year.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of Transport, but in his absence I will direct it to his parliamentary secretary. I refer to question No. 1,705 on the order paper, which was placed there on November 19 last. This is the type of information that could probably be obtained in a few minutes, and since there is a hearing before the board of transport commissioners in this matter very shortly I should like to get the information as soon as possible.


Jean-Charles Cantin: Mr. Speaker, I will take the question as notice.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Horace Andrew (Bud) Olson: I should like to direct a question to the Secretary of State for External Affairs and ask him if the government has imposed additional restrictions in respect of trade with South Africa

in keeping with the decision taken by the security council of the United Nations last week?


Paul Joseph James Martin: 1 have already dealt with this question. I announced an arms embargo in answer to directions of the security council last summer. With regard to the decision of the security council last week, I indicated on Thursday or thereabouts that the government would give consideration to the recommendation made by the security council pursuant to the Norwegian resolution.



PENITENTIARIES


[Stage Direction]
On the orders of the day:
Harold Edward Winch: should like to ask the Minister of Justice an important question which has remained unanswered for several months. Is the minister now in a position to inform the house whether the commissioner of penitentiaries has completed his investigation into the riots at St. Vincent de Paul and the reported attacks by guards on the alleged leaders of the riots? If so, will the minister make the report available to the house for consideration and discussion?


Lionel Chevrier: I have not seen the commissioner of penitentiaries for about a week. He is in western Canada, or was last week. I do not know what the position of the inquiry is, but just as soon as he returns I shall ask him and report to the house.


Harold Edward Winch: May I ask a supplementary question. Does it take over three months to make this investigation?


Lionel Chevrier: I am not familiar with the terms of the investigation, other than what I have already reported to the house in connection with another investigation, and I am not sure to which of these investigations my hon. friend is referring. If he is referring to the case which was tried in the Montreal court, I have already made a report on that matter. If he is referring to another investigation, I am afraid I shall have to inquire from the commissioner.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. R. R. Soulham (Moose Mountain):: May
I direct a question to the Acting Prime Minister. In view of the statement made by 28902-5-357
Inquiries of the Ministry the Minister of National Health and Welfare this past week end to a meeting of the Manitoba farm union that there was a possibility of some Canadian insurance companies going bankrupt, is the government investigating to see if this is a serious possibility?


Hon. Walter L. Gordon (Minister of Finance):: Perhaps I might answer that
question. The record of the Canadian insurance companies is one that Canadians can be proud of. There has been no suggestion that the policyholders of any Canadian company are in any danger whatever of losing their rights and benefits.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: I should like to direct a question to the Minister of Industry which arises out of a press dispatch dated December 7, which states that Seaboard Power Corporation, owned by the Dominion Steel and Coal Corporation, has been chosen to supply power for the heavy water plant close by. My question is, is Dominion Steel and Coal Corporation to be responsible for supplying both coal and the production of power for this heavy water project?


Hon. C. M. Drury (Minister of Industry):: The final arrangements as to who is going to supply the coal and who finally will provide the steam have not yet been made. It is difficult, therefore, to give a categorical answer to the hon. member's question.


Robert Norman Thompson: May I ask a supplementary question. Would this be considered a mistaken bit of information that has been published in this Canadian Press dispatch?


Charles Mills (Bud) Drury: Mr. Speaker, it will be mistaken or not, depending on how the final arrangements work out.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
John Alfred Irvine: I have an urgent question for the Postmaster General. I understand from representations made to me that the casual Christmas employees at the London post office have had their pay reduced from $1.43 to $1 per hour in the middle of their eight weeks of special employment. Would the Postmaster General inform me if this reduction in pay is general in all post offices in Canada, or just in this isolated instance?

Inquiries of the Ministry [Translation]


Hon. Azellus Denis (Posimasler General):: Mr. Speaker, I wish to thank the hon. member for telling me beforehand that he would ask that question.
In reply, I must say that temporary employees hired during the holidays in urban offices in Canada are paid as follows: sorting helper, $1 per hour; mailman's helper, $1.25 per hour; mail handling helper, $1.25 per hour. All other occasional help is still getting $1.43 per hour.
It may happen that some people work occasionally to replace regular employees who are absent and that their employment is terminated when the regular employees come back to work. If those people are subsequently hired to help during the Christmas season, they are paid according to the wage schedule I have just given.

As far as the London employees referred to by the hon. member are concerned, the postmaster at London informs the department that seven persons who were employed as casuals at $1.43 per hour in November, replacing absent employees, were released because the absent employees returned to duty, and these seven people have now been offered re-employment as Christmas helpers at $1 per hour.


Harold Edward Winch: Mr. Speaker, I would like to ask a very definite question of the Postmaster General because of the month we are now in, and I speak from experience of almost 30 years in opposition, 10 of them in this house. This being the month of December I would like to ask the Postmaster General, with regard to temporary appointments in the Post Office Department over the Christmas period, to whom do we, particularly in opposition, tell our applicants to apply for temporary work? Is it to the man who is named as the counsellor in my riding, the defeated Liberal candidate, or is it to the employment service?


Azellus Denis: Mr. Speaker, there are many ways to apply for positions at Christmas. First of all an applicant may go to the post office and apply. Second, he can seek work through the employment bureau, and there are also some members of parliament who recommend applicants. They can also write to the Postmaster General himself who will refer the names to the respective post offices. There are so many ways that I think the hon. member can rely on any one of them to recommend applicants.


Harold Edward Winch: Which is the speediest way for an opposition member to get results?
[Mr. Irvine.)


Azellus Denis: The speediest way, Mr. Speaker, is to ask for the job in September or October, not when it is too late.


Harold Edward Winch: I am speaking about three or five days of employment over the Christmas period. You say to apply in September?


Azellus Denis: Usually after the opening of the schools the students go right back to the post offices and file their applications. I am sure practically all of them are taken on with great pleasure.


Marcel Lessard: Mr. Speaker may I ask the Postmaster General a supplementary question?
Would the minister not think that the N.E.S. is the best and sole place which should be used by the applicants for employment?


Azellus Denis: Mr. Speaker, precisely. We contacted all the N.E.S. offices and all the people who went there got a job, at least in Montreal.


Eugène (Gene) Rhéaume: I have a supplementary question for the Postmaster General. When he suggested hon. members have applicants write to him, what will his address be after Christmas?



REDISTRIBUTION


[Stage Direction]
The house resumed, from Tuesday, December 3, consideration in committee of the following resolution-Mr.	Pickersgill-Mr..
Batten in the chair:
That it is expedient to introduce a measure respecting the office of representation commissioner and to define the duties of the commissioner under the said measure, in addition to those assigned to him under the Canada Elections Act and under a measure to provide for the establishment of electoral boundaries commissions to report upon the readjustment of the representation of the provinces in the House of Commons and to provide for the readjustment of such representation in accordance therewith; to provide for the salary and expenses of the commissioner; to provide for the appointment of a substitute commissioner and for the payment of his salary and expenses; to authorize the commissioner to appoint such officers and employees as are necessary for the conduct of his office and to engage on a temporary basis persons having technical or specialized knowledge of matters relating to the work of the commissioner; to increase the salary of the Chief Electoral Officer of Canada and to effect certain other changes in the Canada Elections Act consequential upon the said measure; and to provide for the payment out of the consolidated revenue fund under the authority of the said measure of all amounts required for the payment of salary and other expenses under the said measure and under the measure to provide

for the establishment of electoral boundaries commissions, including expenses of administration thereunder.
John George Diefenbaker: Is the minister going to say anything at this time?


John Whitney Pickersgill: I think at the meeting of representatives of the parties there was an understanding that it was thought the debate on this matter was concluded; that we would, if there was agreement of the house, pass the resolution and give first reading to the bill, which would stand over until next Monday for debate.


John George Diefenbaker: Mr. Chairman, I think that is correct.
Resolution reported and concurred in.
Mr. Pickersgiil thereupon moved for leave to introduce Bill No. C-126, respecting the office of representation commissioner and to effect certain consequential amendments to the Canada Elections Act.
Motion agreed to and bill read the first time.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, on a point of procedure, now that we have given first reading to the bill respecting the representation commissioner would it not be appropriate to revert to introduction of bills and thus introduce the two bills on redistribution at the same time? We fully understand there is not to be debate on both bills at the present time, but possibly both bills should reach the light of day at the same time.


John George Diefenbaker: In that connection I do not think we are agreeable.


John Whitney Pickersgill: I am afraid I am not agreeable either, because I do not think the bill is ready for distribution, but I hope it will be available tomorrow.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
The house resumed, from Monday, June 3, consideration in committee of the following resolution-Mr. Gordon-Mr. Batten in the chair:
That it is expedient to bring in a measure to authorize the Canadian National Railway Company to make capital expenditures and to supply the financial requirements of Trans-Canada Air Lines and other affiliated companies (i) in the year 1962, not exceeding $156,500,000 and (ii) in the year 1963, not exceeding $157,000,000, and to make certain capital expenditures and enter into certain contracts prior to July 1, 1964; to provide for the financial requirements of Trans-Canada Air Lines in an amount not exceeding $31,800,000, either by means of loans from Her Majesty to the national company or by means of issues of securities of the national company, authorized and guaranteed as to
28902-5-357i
Canadian National Railways interest and principal by Her Majesty, the cash proceeds by either method to be used only for the financial requirements of Trans-Canada Air Lines, the capital needs of the national company itself being met entirely through the sale of preferred stock to Her Majesty and from reserves for depreciation and debt discount; to authorize Her Majesty to continue to purchase until December 31, 1964, Canadian National Railway Company 4 per cent preferred stock in an annual amount not exceeding 3 per cent of the gross revenues on the loan of $100,000,000 to the company authorized by the Canadian National Railways Capital Revision Act of 1952; to authorize Her Majesty to make loans to the Canadian National Railway Company and Trans-Canada Air Lines to meet deficiencies in operating revenues to June 30, 1964, any such loans to be repaid from revenues of the railway company and Trans-Canada Air Lines or, if revenues prove insufficient, by subsequent deficit appropriation by parliament; and to raise the limit on the Canadian National Railway Company's authority to refund matured, maturing and callable securities from the present level of $230,000,000 to $480,000,000.
John Whitney Pickersgill: I wonder if I could just say a word. It was also suggested, at the meeting that was held after the Prime Minister's statement on Friday, that there might be general agreement that this resolution too would be dealt with without debate, the bill given first reading, and the bill stood over for a week, until after the committee on the C.N.R. would have met. If that was agreeable to the house it was clearly understood that there would be no attempt from this side of the house to restrict in any way, on any technical points, the freedom of debate.


John George Diefenbaker: Mr. Chairman, I think that is acceptable, provided matters that it would not ordinarily be permissible to discuss on second reading can be taken up by hon. members and their right to do so will not be challenged. There is, of course, the very important matter of the recent acquisition by Trans-Canada Air Lines of certain aircraft.. The disputes that have arisen in connection therewith and the questions asked today indicate there are many phases of that matter which certain hon. members would like to discuss.
So long as it is clearly understood that when the bill comes up for second reading there will be no challenge, as the Secretary of State has said, to the right to proceed afield and deal with matters that under ordinary circumstances could not be dealt with under the rules with regard to second reading, the suggestion is acceptable.


John Whitney Pickersgill: Mr. Chairman, perhaps I may say a word in reply to the right hon. gentleman. The necessary freedom would probably be greater on clause 1 of the bill when we were in committee than it would be on second reading. But I can give the assurance to the house that no exception will be taken on any technical grounds at either of those stages-that is, on second reading,

Canadian National Railways which after all is governed by certain rules, or on clause 1 of the bill-to any discussion that would be permissible at this stage of the proceedings.
If that could be the understanding it would certainly expedite the business of the house. I might also remind hon. members that the estimates of the Department of Transport have not yet been concluded, either, so that any questions that conceivably might not be in order at this stage would probably still be in order on the minister's estimates.


John George Diefenbaker: Mr. Chairman, that last qualification disturbs me a little. I hope it was not meant to be other than just a statement made for the purpose of completing the speech the hon. gentleman was making, because I have found the Minister of Transport, when asked questions, invariably concludes that they are loaded. We do not want answers of that kind. We want to be in a position to ask questions that will be answered, loaded or unloaded.


John Whitney Pickersgill: I assure the right hon. gentleman that it is merely an additional opportunity.


Gilles Grégoire: Mr. Chairman, I wish to point out to the Secretary of State (Mr. Pickersgill) that many pieces of legislation concerning railways are now under study either by the committees or by the house.
Moreover, vote No. 212A of the Department of Transport's estimates, which deals precisely with subsidies granted to the Canadian National Railways, has been submitted to the sessional committee on railways, air lines and shipping.
Since the president of the Canadian National Railways is to appear before the committee this week, I wonder whether it might not be wise for the Secretary of State to make available to the members of this sessional committee all the necessary information, so that when we come back to the house to study the legislation, the most important questions will have already been threshed out by the committee.
Mr. Chairman, I would like to avail myself of the circumstances to remind the Secretary of State that he already promised us something concerning a certain legislation. And even if we raised the question of privilege in that regard, the problem I am referring to-and the Secretary of State is well aware of what I mean-has not yet been settled to our satisfaction. Therefore, I ask the Secretary of State to look into that matter at the same time.


John Whitney Pickersgill: Perhaps, since I am a member of this committee and have a certain function in it, I can be more certain that what I say here will apply, than it might elsewhere. I am sure, however, that having the bill rather than the resolution will make no difference so far as the inquiry is concerned. In fact having the bill available will mean that hon. members can take the bill with them into the committee and will have an opportunity there to ask Mr. Gordon any questions respecting the bill before it comes to us for second reading, which will not be before next Monday.
Resolution reported and concurred in.
Mr. Sharp (for Mr. Gordon) thereupon moved for leave to introduce Bill No. C-127, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system for the period from the 1st day of January, 1962, to the 30th day of June, 1964, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.
Motion agreed to and bill read the first time.



EMERGENCY GOLD MINING ASSISTANCE ACT


Hon. W. M. Benidickson (Minister of Mines and Technical Surveys) moved: the second reading of Bill No. C-124, to amend the Gold Mining Assistance Act.
He said: Mr. Speaker, I think perhaps the house will not expect too much of an explanation this afternoon on this amending bill, because on November 27 as we were coming to the end of the session I took the precaution of explaining to the house the purposes of this bill.
The bill amends the assistance that has been available to gold mines since 1948. In brief there are only two matters of substance or change in the amending bill. One is that the assistance will continue for a term of four years. This is the longest term that has ever been offered in an amending bill. The other matter is the reference in the statement I made, as reported at page 5144 of Hansard, respecting a denial in about 18 months hence of assistance to new gold mines, where employees would not normally evolve around an existing community that was dependant upon the gold mining economy.


Paul Raymond Martineau: Mr. Speaker, I must congratulate the minister for the brevity of his statement, because I expected he might have gone into

further detail in regard to his bill, particularly in regard to some of its new provisions. The minister's statement of November 27 was welcomed by the gold mining communities inasmuch as it removed any doubts as to the possibility of the gold mining industry not relying on the assistance which they had been getting, particularly since 1958, at an increased rate. Since the coming into force of the emergency provisions I believe a total sum of close to $170 million had been paid up to the end of 1962. That assistance not only contributed but I think in most cases enabled the gold mines to remain in operation and produce for Canada the metal which is a source of great wealth. It also contributed in a very striking way to the prosperity of large sectors of our country.
I would have liked the minister to give the house some explanation about the restrictions which would apply to new mines after July 1, 1965. That particular provision has been questioned with anxiety by the gold mining communities and also by prospectors generally throughout this country. It could, I think, lead to a curtailment of the operations of a very vital industry for Canada, and I am afraid it will have a dampening influence on prospectors and mineral exploration. It may foreshadow within a few years a notable decrease in the amount of assistance which the government will be giving to the gold producers.
The main reason this provision has given rise to anxiety is that in its application it may defeat a most laudable objective, namely an extension of gold mining activities to other areas throughout Canada. Surely this country has not reached the stage where it feels it has a sufficient supply of gold. There is a saying which the minister must often have heard; "Gold is where you find it". Does this provision mean that if in the future a new discovery of substantial proportions is made outside the established gold mining communities, and a mine is established it will not qualify for assistance? If that is so I think the mining people are justified in viewing the provision with great alarm.
I was surprised that the minister did not amplify his statement in this respect this afternoon, and I hope he will do so before the end of the debate, because this is an important matter. I do not think this is the sort of measure which should be whipped through without adequate scrutiny. There is, I feel, something abnormal in the fact that the government must give emergency assistance to an industry which has contributed so much to the wealth of this country and which is producing a metal that is sought throughout the world. Throughout the centuries gold has been the one product which
Emergency Gold Mining Assistance Act has always been in demand. It could always fetch its price. Yet despite this, and despite the fact that there is a world shortage of the metal, the gold mining industry has to be treated as a depressed industry requiring emergency treatment.
Of course we know the reason for this situation. It is because there has not been an increase in the price of gold since 1933, at which time the price of gold was raised from $20.62 an ounce to its present price of $35 in United States currency. Since that year, despite mounting costs and inflation throughout the world and despite the ever increasing demand for gold, the price has remained unchanged. This has been one cause of high prices in many countries and of a decline in activity, not merely in mining activity but economic activity generally. To my mind this measure, welcome as it is in its principles, and necessary as it is to the degree that it provides assistance to the gold producers is still nothing but a palliative, nothing but a stopgap.
It would seem according to informed observers, people in financial circles and experts who have made a special study of gold and its price, that the real solution to the problems of the mining industry and also, perhaps, to the slackening in the economies of several of the leading industrial nations of the world, would be an increase in the price of gold. There is a very good case to be made out in favour of such an increase at this time. One reason is that there exists a world shortage of the metal. Supplies of gold, including annual production, are insufficient to look after the normal needs of trade and commerce, and insufficient to accommodate public purposes.
To give the house an example, let me point out that in 1962 the combined governments of the western world were able to purchase only $325 mililon worth of gold out of a fresh supply of some $1,550 million. Most of the supplies which were purchased by the governments of the western world went to meet the normal demands of trade and commerce. A much larger share went into the hands of hoarders and speculators who for several years made a practice of accumulating gold in the belief that soon the world price will have to be increased.
The supply is short in Canada and it is short in the United States. As a matter of fact, in 1962 the United States had to earmark some $12 billion of its supply of gold simply to back up the United States dollar, which left only about $3 billion for normal interchange. In addition, it must be remembered that foreign demands on United States currency amount to some $15 billion and, of course, if all those demands were required
5602	HOUSE OF
Emergency Gold Mining Assistance Act to be met in gold, as they have a right to be met if the creditors insist, the United States gold stock would be almost entirely depleted.
There have been potent reasons why the United States should resist the world wide demand for an increase in the price of gold. To accept it would be tantamount to a devaluation of the United States currency. Nevertheless the advantages to be derived from an increase in the price of gold are obvious. There would be an immense stimulation of trade and industry. Unemployment would be reduced. More aid could be given to underdeveloped countries.


Mr, Pickersgill:: Why did you not do it
when you were in office?


Paul Raymond Martineau: I will give an example, one which might at the same time answer the very intelligent observation just made by the Secretary of State. His interventions are always intelligent. They are always in the interests of shortening our debates and getting his legislation passed more smoothly. I take this occasion to congratulate him on his subtlety.
In any event, the Secretary of State asked me why this was not done while we were in office. In doing that he displayed an astonishing amount of ignorance, because a decision of that kind does not depend on the Canadian government. It makes no difference which party is in office; it is not the province of the Canadian government to increase the world price of gold. That can only be done by the power which controls the international market for gold and which controls the price on an international scale, that is the United States government. I am sure the Secretary of State knows that very well. But last year, in 1962-since the Secretary of State did bring this matter up, and because it is pertinent to the debate-the Canadian government of that day did devalue the Canadian dollar by a small amount, to 92J cents in relation to the United States dollar. We know that this devaluation has already had, and will continue to have, as the figures for foreign trade reveal, a stimulating effect on the Canadian economy. It benefited Canada's foreign exchange position and, of course, resulted in an increase in our trade earnings.
Similar benefits, but on a much larger scale, would derive from an increase in the price of gold to say double its present price, making it $70 U.S. an ounce, which would amount to a devaluation of United States currency by half. An increase in the price of gold, the advantages of which I have just outlined, would help most industrial countries


in the world but they would help Canada in a very particular manner because Canada is one of the primary gold producing countries of the world. The latest gold production figures I have are for 1961 although the minister may have the 1962 figures; but I would point out that in 1961 production of gold amounted to 4,425,000 ounces. Canada, of course, is a developing country with vast potential mineral reserves still untapped. There is no doubt that, as occurred in 1933 and later after the world price of gold was increased, a great new wave of mining exploration would follow today if the world price were increased. This would result in new gold discoveries which would help to alleviate the world shortage of gold and would bring new prosperity to Canada and create new communities where today only wilderness exists.
Not only the gold mines would benefit from the new mineral exploration and prospecting, which would be sparked in this way, but there would also be discoveries of other minerals, thereby enhancing Canada's position as one of the leading countries of the world in mineral production. In turn, secondary industries and the economy in general would greatly benefit from such a move.
Most people who have studied the situation are in agreement in saying that this is the one single action that could contribute most to Canada's prosperity. Perhaps I might give an example of the contribution one single mine can make to the economy of the country. Let me take Dome Mines Limited of South Porcupine, northern Ontario, which is not far removed from my own constituency. In 1961, this mine bought supplies from 126 communities in Canada broken down in this way: 82 in Ontario, 22 in Quebec, 9 in New Brunswick, 6 in Nova Scotia, 2 in Saskatchewan, 2 in Alberta, 2 in British Columbia and 2 in Manitoba. These purchases were made from a total of 622 companies. This means that in addition to the very worth-while contribution arising from the production of gold by this mine, gold being in great demand, as I have said, the benefits from the operation of this one gold mine are spread out in an intricate network throughout the entire country.
In my own constituency we had a notable gold producer which ceased operations a few years ago, not because it could not survive financially but because the reserves had been depleted. I am referring to Belle-terre (Quebec) Gold Mines Limited. My constituency has along one border and on its fringe the pre-Cambrian shield which extends through northwestern Quebec and northern Ontario and in which are found the

majority of Canada's gold producers. I often wonder what would have happened to our country during the dark and deepest days of the depression if it had not been for this vigorous industry which provided employment for so many people and also provided an impetus, encouragement and inspiration to the rest of the country which at that time was stagnating under the severity of a world-wide depression.
Because of the reasons I have just mentioned I believe the time has come for the government to initiate talks with the United States government and perhaps also with the world monetary fund officials in order to have the situation fully examined and to reach conclusions that might influence the United States government to decide to take the imperative step of increasing the price of gold. As I said at the beginning, Mr. Speaker, we are happy that the legislation is being extended but we hope it will not result in the initiation of a policy on the part of the government that will lead to the discouragement of mineral exploration, because if that were to happen it would be a very sad day for the industry, for the mining communities and for the country as a whole. I am looking forward to further explanations from the minister when he closes the debate.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, we are very happy to have the opportunity again to support the Emergency Gold Mining Assistance Act and its extension for another four years. We do this knowing that the minister must be having certain difficulties with his conscience because of not having made the act permanent rather than emergency legislation. I think all who are interested in gold mining will agree that the industry is not likely to go ahead under present circumstances but that gold production is very apt to become a dying field of endeavour, and therefore the emergency that was apparent 17 years ago will still be apparent until the last one of the gold mines closes down.
We are very sympathetic to the position the minister takes in stipulating in the new legislation that assistance will not be provided to new areas developing gold production if it results in the establishment of new communities, but rather for the development of producers in areas already dependant on gold mining.
I believe the minister is to be congratulated on having learned one lesson which the Canadian people learned at considerable expense in the case of Elliot Lake where assistance was given to the development of a new
Emergency Gold Mining Assistance Act mining field and the creation of a town without making sure that the industry would continue to be able to exist over a period of years.
I agree with something that the last speaker said but I would point out that he had the opportunity and failed to do anything about changing the price of gold. It is very easy for me to say this is a worth-while endeavour and that the price of gold should be increased, because I think this would solve the problems of many of the producers in my area and would have a favourable reaction so far as many of the producers in other areas are concerned. However, we are all aware of the fact that Canada as a prime producer of gold is dependant upon the international monetary fund, and more particularly the United States, for the price of the product.
I might give an example of something that happened years ago when I was a miner, and the president of a union that was on strike and had been for a number of years. I visited the president of this small independent company for which I worked. The company owned three gold mines. I went to the United States to discuss the matter of settling the strike with the president. I thought that the company I had worked for was quite a sizeable one but I was very impressed by the fact that while he was the president of the company he was also considered, in the United States city in which he lived, to be the largest real estate holder in that area. In addition, he was the head of one of the largest legal firms in that city and had many other interests besides gold mining.
The only reason I was able to see him was that I was naive enough to think that I should be able to do so. When I arrived in his office I told his receptionist that I wanted to see the president, giving his name. She asked me if I had an appointment and I said no. She said, "Who will I tell him is asking for an appointment?" I gave her my name and I said, "You can tell him I work for him in Timmins". When she told him that he decided he had better find out whom he was employing in Timmins, because I imagine he never considered any of us in the gold mining field to be his employees.
We discussed the matter of increasing the price of gold, and it is not quite as simple as the miners or some of the mines sometimes think. He said to me, "I have a little money tied up in gold mines and I should like to see the price of gold go up but if the price of gold goes up you can easily figure out what this is going to mean to me in dollars and cents in relation to my real estate". It is easy for us to think only that Canada is in the
5604	HOUSE OF
Emergency Gold Mining Assistance Act position of producing gold, and we are not really too interested in the stockholders. The stockholder, of course, has to make a profit or he is not going to be interested in the particular field, but over a period of years the stockholders have made sizeable profits from many of the existing mines. The contribution made to the nation has been dealt with by the previous speaker. It is a contribution that cannot be overemphasized. It is not generally known that there are many other industries in Canada dependant upon the gold mining industry in one way or another. It is interesting to ride on the trains and, in talking to the engineers, learn that during the depression they worked for the gold mines under some sort of hoisting licence, and then were able to go back to the running trade after the depression. The same thing is true in so far as the manufacture of cable and other supplies is concerned.
There is much more gold, I am sure, under the pre-Cambrian shield than has been mined. It is necessary, in my opinion, for the Canadian government to go to the international monetary fund and demand an increase in the price of gold. We really cannot separate gold from the other monetized metals, but I think the time has come for Canada to decide whether or not we are getting proper value for the gold we export at $35 an ounce, or whether the Canadian government should stockpile it. We have never really objected to the mines stockpiling gold, and I want to talk about that later in connection with McIntyre. One time they were mad at the government and they stockpiled gold.
We have said many times that they are using this scheme to low-grade their property. This is a matter of great concern to the miners who are dependant on that ore. However, that is not the purpose of my intervention today. First of all, I believe the minister should remove the word "emergency" from this measure. We would be quite happy to move an amendment when we reach the committee stage, because I think the minister will agree that unless something happens we do not foresee at the moment, there is really no possibility at the end of four years of not having to extend this legislation.
I think we have an obligation to the communities because the communities have been literally unable to do anything for themselves. Not long ago the representatives of these communities came to Ottawa and, at the invitation of the minister, I sat in on the presentation of the briefs by the representatives of these communities. I should like to quote one sentence from one of the briefs. In the conclusion, the brief refers to the fact that the mines in these communities have derived $170 million in aid over the past


16 years. They want this continued because they have not been able to arrive at any other solution. The brief reads as follows:
Beyond this immediate question, however, we have tried to persuade you and your colleagues and fellow members, that the time is opportune for an imaginative reappraisal of the whole scope and purpose of the legislation as an instrument of national economic development.
As an aside, I would say that I am sure this could be revised in many ways. However, I presume the only way they want it revised is upward. However, the brief reads as follows:
Economic growth is the core of much of your policy thinking these days, just as it was of ours in, for example, the 1958 study of the gold mining community. Diversification has proved to be a rocky road to economic growth in the gold towns, until already the areas around Timmins, Val d'Or, and Rouyn-Noranda have been defined by your government as being so depressed as to be eligible for special federal assistance in business development. Most of the gold mining communities are in equal difficulty. Considering the gamut of local, national and international considerations bound up in gold mining, we would conclude this submission by calling to your attention the tremendous impetus to economic growth which would flow from a truly positive approach to the extraction of our gold resources.
Well, there is a difference of opinion even amongst the representatives who came to Ottawa. I am happy to say that my area may be just a little more progressive, a little more advanced in its thinking, than they are in Porcupine and some other areas. This is true for a very simple reason which does not relate to a difference in people or a difference in areas. The only difference is that many of the gold mines in Kirkland Lake have closed down, and those that have not closed are in the process of informing their shareholders and everyone in general that they are on the verge of closing down. The problem in this area, therefore, is immediate so far as the producers are concerned. They have made other suggestions which I believe the government is considering. I hope the Minister of Mines and Technical Surveys (Mr. Benidickson) will keep in touch with the Minister of Industry (Mr. Drury) because it is my opinion that this money we are paying out in the form of emergency gold mining assistance would be better paid for the development of secondary industry. If we are going to take care of the transition period, I would say that the $17 million we will be paying this year could be better used in the development of secondary industry.
We have been interested in some of the things that have happened. One of the most interesting developments has been that of the McIntyre mine, which has adopted an archaic attitude toward some of its companies. This company may talk about the

earnings of employees over the years, but at the same time they do not say much of what has been paid to shareholders or what the company, as an entity, has earned. The company has undertaken some development, but that has not any relationship to the amount of money the company has taken from the emergency gold mining assistance fund. The nearly quarter of a million dollars which has flowed from the fund to this company, in my opinion, has not been in keeping with the amount of profit the company has earned.
I suggest we should be interested in this matter. In 1962 we gave McIntyre $1,064,000 in aid. Then, that year McIntyre had a profit of $5,330,760 on which they paid income tax of only $67,586. I suggest that this is a cause for some alarm when we know that some of the smaller producers in adjacent areas are paying half of their total profit in income tax. As an example I cite the case of Cisco in the Gowganda area, a silver producing mine. I want to compare these two mines for the benefit of hon. members. In 1962, Cisco had a profit of $469,000, a little less than half a million dollars, on which they paid income taxes of $224,000, almost a quarter of a million dollars. McIntyre made $5.5 million of profit and yet only paid $67,586 in income tax. I think there is a great disparity between the two which we should think about.
The people of the community are of the opinion that the department has not the facilities to really ascertain upon what the emergency gold mining assistance is being paid at McIntyre. I have a statement here, and I will read some of it. It is to be found in sessional paper 88A of November 1962. We have in the Gowganda area a silver producing mine called Castle, which in 1958 was made a division of McIntyre mines. This mine has been making a very large profit and, according to the figures, has been paying about half a million dollars or so to McIntyre each year. We are of the opinion that the greater the loss at Castle, the more E.G.M.A. will be earned because costs have risen at McIntyre. This is not a separate branch, it is a division of McIntyre itself. If you make a calculation of the E.G.M.A. that has been paid to McIntyre, you will find a sizeable increase each year since Castle was made a division of McIntyre.
Why should we be interested, one way or the other? One of the reasons is that McIntyre has been living in the dark ages so far as their employees are concerned. The gold mining industry has paid the lowest wages of any mining industry in Canada. I think, Mr. Speaker, you would be interested in this, that the gold mines paid the lowest
Emergency Gold Mining Assistance Act wages; silver paid a better wage, as did copper, zinc and the other base metals. The highest wage in the mining industry accrued to the iron miners, the lowest base metal we have in the mining industry. It looks to be the case that the higher the price of the product, the more precious the metal, then the lower are the wages in the industry. There is a definite relationship all up the scale.
The silver mining industry has been organized for some time. The two mines in Gowganda were organized last year by the united steel workers, and Siscoe made an arrangement in keeping with the wages in the silver mining industry. The Castle, owned by McIntyre, is run by an old mining baron by the name of Campbell, who for many years has had a connection with the Castle mine and who is an engineer with McIntyre. He has always kept his finger on the pulse of the gold mining area at Castle, but since the contracts were not agreeable the Castle closed down. This has meant that the McIntyre is showing a loss of $500,000, which will probably be made up by increased amounts under E.G.M.A., which means that the E.G.M.A. payments will be higher in 1964 because the Castle closed its operations.
I do not know if we can bring any pressure on this company to divorce itself from the wing of McIntyre, so that the miners can be re-employed, but we are going to make it really miserable for McIntyre until they allow the only silver company in my area to meet with the employees and make some arrangements.
The former minister got himself involved in this matter of surveys, but mining is a very difficult proposition. I laid a charge one time on information that was given to me regarding a particular stope at the McIntyre, which was one of these high grading stopes. The department said they would investigate it and report the findings of their investigation. However, according to my information, this investigation was never made, and it is also my information that if they are going to do this surveying they will have to borrow the men from the provincial department of mines because there are very few people in the department who can go underground and do the physical work involved.
Here is a letter sent out on February 28, 1962, from the head of the taxation and legislation section of the Department of Mines and Technical Surveys, to Mr. P. B. Mc-Crodan, manager, McIntyre Porcupine Mines Limited, Schumacher:
Dear Sir:
T. W. Verity and W. J. Beard inspection engineers, will visit your mining property on or about March
5606	HOUSE OF
Emergency Gold Mining Assistance Act 23, 1962 to carry out duties in connection with the Emergency Gold Mining Assistance Act with respect to the designated year 1961.
Would you kindly prepare certain relevant information and plans prior to the visit. A "List of Data" and a copy of an inspection report form are attached for your guidance and convenience in the preparation of the information.
Yours truly,
E. C. Hodgson Head,
Taxation and Legislation Section.
Well, Mr. Speaker, I worked for a long time in the mines and one of the greatest complaints miners had was the fact that in Ontario, when a safety check was going to be made at a mine, the mine was phoned up and told on Friday night about the check. Finally, because of our complaints, the government realized this was not a fair process, because all the men were taken off the work they were doing and were put to work making the mine safe so that the inspector would not get himself killed when he walked through it.
The department finally quit notifying the mines, but the inspectors came up with a different gimmick. An inspector would visit a mine the day before, bring his clothes and hang them in the dryer, which very fact indicated he was going to do the inspection there next day before he went anywhere else. We do not believe in this kind of inspection.
I mention the McIntyre in this connection, because not only have they played around with silver but they are now concerned with a new copper project. They have been fortunate enough to develop a copper body by accident. They were doing development work for gold in a gold mining area, and fortunately found themselves with a very large low-grade copper project close to their gold workings. I suggest that these mining inspectors were not, in 1962, able to do an evaluation for 1961 of the costs of production in that mine because they were not in a position to take into consideration the cost division between the development in copper and the development in gold.
We know that in 1963 the mine is ready to go into production. Now, we want to be very fair to the department because they have had requests to operate this as a separate mine, but after hearing briefs on the subject they have decided it is not a separate mine, and they are not going to allow the three year tax period from the development. I note that on September 9, 1963 they wrote to McIntyre Porcupine Mines as follows:
In examining the application submitted by your company for assistance for the period January 1 to June 30, 1963 it has been noted that a deduction of costs applicable to the copper mine has been made from the costs of producing gold listed on


the ''General expenses at mine" sheet. This together with a number of items showing increases in costs has raised the problem of providing a suitable means for the examination of the division of costs made between the production from the McIntyre gold mining unit and the McIntyre copper mining unit.
Would you be good enough, in the third quarter application for 1963 and subsequent applications, to submit detailed information on the cost of production from the copper mining unit in a manner similar to that used in the presentation of the cost of production of gold through the use of sheets number 1, 2, 3, 4A, 4B, and 5, schedule II.
The application for the second quarter of 1963 has been approved for advance payment in the amount of $210,495.25. In arriving at the amount of advance due, a holdback rate of 25 per cent was applied in view of the possible changes in the division of costs between copper and gold. Your attention is also drawn to an error in subtraction in the amount of $100,000 which was made in the computation of the amount of advance due in the application as submitted.
It was very nice that they should draw this small matter of $100,000 to the attention of the mine. I did not think McIntyre had that kind of accounting system and would make that kind of mistake. But, Mr. Speaker, you will see this is causing a great deal of concern. My concern is not so much in presenting difficulties to McIntyre in getting E.G.M.A., but in the fact that I think they are damned crooks so far as their employees are concerned. If they do not straighten up their affairs with their employees, then we shall be after them because the employees really are the communities. The employees working in these mines provide their communities with all the taxes they need for municipal services. The mines pay very little taxes and buy a very small amount of their materials locally, mostly on a wholesale level, so that it is the wages of the people they employ which provide the lifeline for the communities.
If McIntyre start playing around with their employees they are going to be in trouble with me, with the E.G.M.A. inspectors, and I am sure with the minister. Our avowed purpose in supporting E.G.M.A. is not that it is a cure-all for keeping life in these communities, but that it is a stopgap measure to keep the communities in existence until we can arrive at a system of providing them with industrial assistance as an alternative to gold mining.
So long as Canada is not interested in handling gold as an export commodity, and treating it as a mint commodity which the government itself is going to sell, then we are not interested in mining gold. We do not care if we have gold in our stockpiles because we do not use it as backing for money. It is the same as if Ford were manufacturing cars in Canada and were exporting them to

Emergency Gold Mining Assistance Act
the United States at a set price, and the reason the set price is there is the reason we are supporting E.G.M.A. assistance to these communities.
Therefore, we are giving advance notice that we are going to war on McIntyre until they decide they are going to do something about their employees. This company has several hundreds of millions of dollars in its portfolio, to invest in various forms across the nation, and every red cent of it was built up on the money it earned on the work, labour and resources that the Canadian people has had in the gold mining industry in the Porcupine area. The company has an obligation, because the miners are only earning $1.25 an hour, and they are working underground for that low wage. The base wage in most of the iron mines is well over $2 an hour. There are sweepers getting close to $2 an hour in the base metal industry. Therefore, Mr. Speaker, we are not asking for anything extra and certainly nothing in keeping with the occupation in which they work and the hazards under which they work. We are not asking for anything more than is due to the communities that were built around them. We are pleased, therefore-despite what I say about McIntyre-to support E.G.M.A. We think the controls being exercised by the department are probably not strong enough or active enough, however, to curtail a company that is perhaps out to beat the department.
This government is anxious, no doubt, as other governments have been, to keep the industry alive with this emergency gold mining assistance. I am not sure in my own mind that McIntyre has not abused the purpose of this act. To illustrate the attitude of these people I should like to read this letter. This is a letter that goes in to the department quarterly, four times a year. It is from McIntyre Porcupine Mines, Limited and says:
We enclose herewith, in quadruplicate, application of this company for the six months period ended June 30th, 1961 for assistance under the Emergency Gold Mining Assistance Act.
Will you please give this claim your usual prompt attention and forward your cheque for $308,268.09 at your early convenience.
In other words, "Get cracking; my money is due". People do not write like this when their pension cheque is overdue. This is the attitude they use to the communities, to the government and to everybody with whom they deal. When they go to arbitration they speak of the master and servant arrangement; they go back to laws that have long been repealed. Therefore we think there has to be much closer supervision of a company that appears to be increasing over the years with the assistance of E.G.M.A. and which we find is in a position to make over $5 million profit.
I think a legitimate question to ask is, why should we be making a donation of $1 million to this company, when the profit they are making is so considerable? If they can prove this is for the production of gold and there are other factors involved, I think this is perfectly all right. But I suggest that when this copper project goes into operation we will have the same difficulty with the new product, with regard to getting better wages out of this company, because they will continue to use gold as the reason for not paying decent wages, instituting any pension plan or doing anything for the community or the people.
In closing, Mr. Speaker, I should like to congratulate the minister, and I hope all hon. members will support the idea of not allowing new gold mines to develop outside those areas where gold is already a major production factor. This means, as I understand it-and I hope the minister will correct me if I am wrong-that if new mines can be found in Matachewan, Kirkland Lake or Timmins, these gold mines will be supported under the same type of arrangement-


William Moore Benidickson: With a proper margin of profit.


William Arnold Peters: Yes, of course, taking into consideration the cost of production and other factors. But we hope this will not be extended into new gold mining areas if such were found on the outskirts of Ottawa or somewhere else, and particularly in areas more remote, for the simple reason that we want this matter of emergency gold mining assistance to produce benefit and assist the welfare of the gold mining communities as long as those communities are dependant on this industry as their source of income.
We also ask the minister to give complete co-operation to the Minister of Industry in searching out, through surveys and whatever means are available, all possible avenues for developing secondary industry in these areas so that sooner or later these communities will find themselves again in the self-supporting position which they desire, and which 1 think the Canadian people desire for them.


Robert Norman Thompson: Mr. Speaker, on the basis that the better you know your subject, the shorter your speech will be, I can say that I know the gold subject very well. However that is not exactly the case and I shall be very brief in my comments. I do wish to go on record as supporting the extension of the Emergency Gold Mining Assistance Act, because we believe it is essential for our gold mining industry in Canada at the present time.
5608	HOUSE OF
Emergency Gold Mining Assistance Act
The world situation in regard to the supply of gold is rather critical. For over 20 years now, in fact for almost 30 years, the price of gold has been at a fixed rate. The cost of living in all parts of the world has increased rapidly during this period of time, but the price of gold has not increased. From one aspect this has caused a great deal of pressure upon the gold market of the world, and it is becoming obvious that the price of gold will have to be increased in the not too distant future if this commodity is to continue to form the basis of international exchange, as it does at the present time.
There is no doubt that on an international basis we are in trouble with the gold standard, even as we were in trouble with the gold standard on an internal basis in 1935. This situation is forcing a new policy to develop in regard to international settlements. However, until this comes about I think the gold market will continue to be very strong as far as the need of the world for more gold is concerned. Certainly in Canada we should be doing all we can to increase, rather than decrease, the amount of gold produced. In other words, because of the short demand on gold today the demand for gold will continue for some time, even though the previous speaker mentioned that gold in its relative importance as a trading commodity may eventually go out of the picture altogether.
This brings me back to the point that it is important that the E.G.M.A. policy be continued, and we support the government in extending it at this time. I am particularly grateful to the minister for including in this extension of the Emergency Gold Mining Assistance Act new mines which might come into existence within the next 18 months; that is, up to June 30, 1965. This means that new mines in the process of being developed at the present time are protected as well as mines which are actually in production. This is not the place to debate this matter at the present time, but I believe it is important that the government restudy and reassess its entire policy of taking care of the gold mining situation. I believe that the inevitable developments which will take place within our own economy as far as gold is concerned and also internationally, as far as the use of gold is concerned, demand that some more satisfactory policy be worked out to cover the gold mining industry. In the meantime there is no alternative but to extend the present policy, which is being done in this piece of legislation.
I do not wish to belabour the point any further, Mr. Speaker, but I repeat that we give our support to this bill. At the same time we urge the government to initiate immediately a study of how our over-all gold


policy can be improved upon. We support the provision that new mines coming into operation in the next 18 months will also be covered by this assistance.


Mr. M. W. Martin (Timmins):: Mr. Speaker,
it is too late in the day and too late in the season to take up too much time on the bill before us today. However there are a few things I should like to say. I wonder whether the government has really come to grips with this problem of gold, or whether they have just sort of swept it under the rug for another four years. After all, if we look back over the history of the Emergency Gold Mining Assistance Act we see that it goes back some 16 years now. I would like to know from the government just what has been solved in those 16 years. Are we any closer to a solution of the problems of the gold mining industry today than we were 16 years ago, in 1948, when this act was first passed? Furthermore, over those 16 years has the government really done any housekeeping on this act? Have they given an appropriate accounting of their stewardship in regard to the $175 million or $180 million of the taxpayers' money that has been spent in this industry?
I was rather shocked two or three years ago when the hon. member for Timiskaming (Mr. Peters) and myself dug into this matter and we found that over the years money had been paid out and there was not even an inspector on the payroll of the federal government to inspect these mines and see whether the money paid by the government was in fact being earned by the industry.
Like Caesar's wife, the industry was beyond suspicion and its word was accepted for everything. That has not been the experience of the gold miners who have worked for this industry over the years. It has not been the experience of the gold mining communities which have been dependant on this industry. These companies are not the knights in shining armour that we might think them to be, when we consider that the federal government is paying hundreds of millions of dollars into an industry without making arrangements for proper supervision and inspection to see how this money is being used.
My hon. friend from Timiskaming (Mr. Peters) has pointed out that the wages paid in the gold mining industry are still the lowest paid in any mining industry in Canada. I think this is something the government should think about, as it pays out this money over the years. I think responsibility rests on the shoulders of this government to make a closer check on this industry than has been made in the past. My hon.

Emergency Cold Mining Assistance Act
friend from Timiskaming also mentioned the subject of safety. I think the records will show that gold mining is as dangerous an industry as any in the country today.
There is another aspect of this question to which the Minister of National Health and Welfare (Miss LaMarsh) might turn her attention. I was asked, rather jokingly, by some people in Toronto at one time whether everyone in the Porcupine area was on the provincial welfare payroll. I admit that a great many are. The percentage of those in the gold mining areas who have to fall back on the welfare arrangements of the provinces and the municipalities is probably higher than it is elsewhere. This, I say, is a direct result of the neglect shown by an industry which is shirking its responsibilities and shifting them on to the shoulders of the municipal taxpayers who, in turn, are the employees of the industry. I have in my files many hundreds of cases of men who have been injured or who have lost their health working in the gold mines. They have been shed by the industry like old clothing and they have had no choice but to fall back on the municipality for assistance. I think this is a scandalous state of affairs; it is a situation which the federal government should look into before it opens the purse strings to subsidize this industry for another four years.
I think, too, that the government should look back over the 16 years during which this act has been in operation. I believe it will be found that gold production has not been sustained by this measure. Gold production has declined considerably, compared with the figures for production when the act was first passed. I do not see how the government can honestly feel that the extension of this act, now, for another four years is going to bring about a solution to this problem, any more than the legislation which has been in effect for the last 16 years has succeeded in doing so. I think we would do well to consider the state of the Canadian reserves at this time. Instead of having gold as the basis of our reserves, reliance is increasingly being placed on United States dollars with all the danger this implies to our economy. I wonder whether the government has really come to grips with this problem, or whether it has just lifted the rug and swept it underneath for another four years, feeling that the job is done.
I say that the job is not done. I think the government would be most unwise to think that this problem is solved for another four years; because it is not. As I said in this house about two weeks ago, I think it is time we adopted a new policy with regard to gold. The government should not say that
the job is done, simply because this subsidy has been extended for another four years. We should look at this problem again; we should try to come to grips with it, and make provision for a much better solution than we have reached to date.


Mr. D. M. Fisher (Port Arthur):: The one question I wanted to bring to the attention of the minister really relates to the schedule, and since the schedule introduces a new principle into the bill I think that on second reading I can discuss it in some detail though, normally, I would not be able to do so at this stage of the bill.
In the schedule we find a list of the communities which will be able to take advantage of the act, particularly in relation to the date 1965 which, in a sense, is a cut-off date for any new mines established in areas which are not what might be called old mining communities. There is one community which is not in that list, and its absence causes me some concern. It is the community of Beardmore, Ontario, which is not far from Geraldton. There is a rich little mine there named the Leitch gold mine which is coming to the end of its productive life. Because of the quality of the ore produced at this mine it has rarely been in a position in recent years to come under the provisions of the Emergency Gold Mining Assistance Act. The fact remains that this is an old gold mining community in which a considerable number of people earn their living from mining. Some of the other mines in the area, such as Northern Empire and a couple of others whose names I cannot immediately bring to memory, have been gold producers in the past and have taken advantage of this assistance. I think the minister will be able to acknowledge the truth of this from his own experience. It is not so many years ago that the Howey mine went out of production there, but the recrudescence, if I may call it that, of Red Lake causes us to realize how many lives these gold mining communities have. It looked as though Red Lake was a dead camp and unlikely to come to life again, but events proved differently. There is no question that in the general geological structure around Beardmore which runs to Geraldton, 50 miles away, a town which comes under the provisions of the act, there are prospects, which have some reality, that another producing mine may be discovered in the foreseeable future.


William Moore Benidickson: If the hon. member will look at clause 3 he will see there is the right to add.


Douglas Mason Fisher: The minister says clause 3 makes provision for the right to add. My point is, really, that Beardmore is a gold
5610	HOUSE OF
Emergency Gold Mining Assistance Act mining community at the present time and its mines have been able to take advantage of E.G.M.A. in the past. My suggestion is that it should be in the schedule now.


William Moore Benidickson: I would agree.


Douglas Mason Fisher: That is the main point I want to make.
I follow mining developments in the Northern Miner, as most people do, and there is one point which was raised in it, not too long ago, which I have brought up on previous occasions when this item was before parliament. It relates to this whole question of profits made by mines which receive assistance under this measure. I do not know what the way out of this dilemma may be. In the past it has been put to me this way by individuals-and this is the way in which it is put in the Northern Miner: certain shareholders in gold mining properties become incensed when dividends are not declared on their shares, despite the fact that companies have a profit margin as a result of gold mining subsidies. This point is made, somewhat crassly, in the Northern Miner for November 28 at page 78. A writer from the United States says:
I think that recipients of the government's costaid should distribute any profits to their shareholders and not use this money to buy one another's shares on the exchange. I feel that if a new gold subsidy is to be enacted it should state that the companies that do not pass this along to their shareholders should not be entitled to it. I own shares in both Lake Shore and Wright-Hargreaves but for many years have not received any return on this investment. Also, the price of these shares continues to sink so that I am also faced with a very heavy loss.
This is not a very important point, but it does show the dilemma of free enterprisers when any company is receiving assistance from the government. It is for this reason I should like to support the generalization of my hon. friend from Timmins (Mr. Martin) when he said the Emergency Gold Mining Assistance Act does not solve anything. We are presented with a continuing problem which causes trouble in the mining communities and in the capitalistic world of the mining promoters, and I would like the minister to consider putting the mines, forests and waters committee to work in an effort to come up with something better than E.G.M.A. I think our main consideration should be the communities involved.
We intend to support this measure and we have no severe criticism to make, but I do wish to remind the minister again about the Beardmore problem.
Motion agreed to and bill read the second time.


John Whitney Pickersgill: Mr. Speaker, before you put the motion to go into committee of the whole, I believe the hon. member for Wellington South would be willing to let us go on with public business if there was general agreement to do so. Otherwise he intends to proceed with his motion. I wonder what the feeling of the house would be.


Douglas Mason Fisher: Mr. Speaker, I would not mind, only I have a motion stacked up behind that of the hon. member which I have been waiting for four years to have debated in the house. The motion relates to the office of ombudsman. I do not want to have to beat the hon. member for Wellington South into going ahead, but I am going to insist that he do so unless the house leader can come up with some suggestion as to how this hour can be given to us at some other time before the end of the session.


John Whitney Pickersgill: I would be very glad to accept the hour between 11 and 12 on December 21 and listen to the hon. member for that whole hour, if that would be the general wish of the house. Much as we enjoy listening to the hon. member for Port Arthur, I think most members of the house would like to get the business of the house completed so that we can prorogue at Christmas. I appeal to the big heart of the hon. gentleman. When an hon. member who really has an opportunity to speak is willing to forgo it, the hon. gentleman might forgo his hypothetical chance, because he is third on the list.


Douglas Mason Fisher: I am ready to go on today.


John Whitney Pickersgill: Apparently there is unanimous consent minus one.


Mr. Howard:: Minus two.
The house in committee of the whole on Bill No. C-124, to amend the Emergency Gold Mining Assistance Act-Mr. Benidickson-Mr. Lamoureux in the chair.


The Chairman:: It being five o'clock I do now leave the chair for the house to proceed to the consideration of private members' business, pursuant to section 3 of standing order 15.


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



INDUSTRY


[Stage Direction]
On the order:
Notice of motion-Resuming consideration of the proposed motion of Mr. Peters:
[Stage Direction]
That, in the opinion of this house, the government should consider the establishment of a national location of industry council for the purpose of directing new industry into those regions of the country which are dependant on a narrow industrial base and those which are areas of surplus manpower; and empowering the national location of industry council, in co-operation with the monetary and fiscal authorities, to offer incentives to attract new industry to such regions when requested by provincial and municipal governments.
William Arnold Peters: Mr. Speaker, I should like to refer to item No. 19 under this order and draw your attention to the fact that it is headed: "Resuming consideration of the proposed motion of Mr. Peters". I refer to the debate that took place on November 18. I may say I have checked the standing orders and so on and find that the position is a very unique one. As found on page 4482 of Hansard of November 18, when this motion was discussed, it will be seen that just before the debate concluded the Acting Speaker on that day said:
Order. I should point out to the house that if the hon. member for Timiskaming speaks now he will close the debate. The hon. member for Essex West (Mr. Gray).
The fact is that I proceeded to speak at that time and closed the debate. It will be seen that farther down the page the Acting Speaker said:
Is the house ready for the question? Moved by Mr. Peters that-
The Acting Speaker had started to put the question when the fact that it was six o'clock was drawn to his attention. I submit that is no reason for interrupting a vote and this matter should have been voted on at that time. However, because it was not I would ask your direction, Mr. Speaker, on how we can go about concluding this matter, inasmuch as it only involves a vote that should have been taken. There can be no more debate. I am of the opinion that the situation can be remedied if you will call this item now.


Mr. Deputy Speaker:: Of course, the understanding of the Chair is that the items can only be taken in the order that they appear on the order paper, and the item to which the hon. member refers is not the first item under notices of motion. I appreciate the particular difficulty which is now brought to the attention of the Chair by the hon. member. Perhaps the Chair might be given the opportunity to look into this problem before private members' business is called again, but I would suggest that at the present time, in view of the fact that the item in question is not the first item to be considered, it should be left where it is for the time being.


William Arnold Peters: Mr. Speaker, I will agree that I am in the wrong in not having raised this
Estate Tax Act
matter previously, and certainly I am in the wrong in not having demanded that it be completed at that time. However, I do think it is not a satisfactory arrangement to have this item appear in this position. This is not in accordance with the rules, and I would ask unanimous consent that we proceed with the vote on this matter now.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: There is not unanimous consent. Therefore we have to proceed according to the terms of standing order 18, section 1, which reads as follows:
All items standing on the orders of the day, except government orders, shall be taken up according to the precedence assigned to each on the order paper.


William Arnold Peters: Mr. Speaker, when you are examining this matter I would ask you to give some consideration to the procedure which resulted in its being placed in this position, because in my view the vote should be taken. When the Speaker calls it six o'clock and leaves the chair he automatically concludes any debate, with or without the consent of the house. However, 1 suggest that our business should be conducted in a more orderly fashion, and I would ask you to give consideration to that factor because when a vote is to be taken the normal procedure is for the vote to be proceeded with before the Speaker leaves the chair. If you were to leave the chair now I presume that by your act of leaving the chair you would be calling it six o'clock, but I do not think that would be in keeping with our parliamentary practices.


Mr. Clancy:: Mr. Speaker, the hon. member who has just spoken-


Mr. Depuly Speaker:: Order.


Gordon Drummond Clancy: -sat for six minutes after the Speaker had called for him to stand up.


Mr. Depuly Speaker:: Order. The hon. member for Wellington South.



ESTATE TAX ACT


Mr. A. D. Hales (Wellington South) moved:: That, in the opinion of this house, the government should give consideration to amending the Estate Tax Act to provide for payment in appropriate cases of estate tax assessments by instalments so as to reduce the number of "forced sale" liquidations of estate assets, which in many cases have resulted in the loss of Canadian ownership and control of Canadian business enterprises.
He said: Mr. Speaker, I appreciate the opportunity to present this notice of motion

Estate Tax Act
at this time. It is difficult at times to get the opportunity to express one's views in the house and I appreciate having the opportunity on this occasion.
The Estate Tax Act, which came into force on January 1, 1959, was designed to replace and bring up to date the old dominion succession duty act. There is, however, one section in the new Estate Tax Act which I do not believe carries out the intention of the house. I refer to the payment of succession duties.
As hon. members know, as the act now stands these taxes must be paid in ordinary cases within six months after death. My notice of motion is in these terms:
That, in the opinion of this house, the government should give consideration to amending the Estate Tax Act to provide for payment in appropriate cases of estate tax assessments by instalments so as to reduce the number of "forced sale" liquidations of estate assets, which in many cases have resulted in the loss of Canadian ownership and control of Canadian business enterprises.
I believe a good argument could be put forward with respect to whether death duties are necessary at all. Only 1.5 per cent of the national revenue is derived from this source and in my opinion these taxes have a very crippling effect on the economy of the country. They certainly do not encourage a person to save and build up an estate. However, they are with us and probably always will be.
Therefore I think the government should give consideration to, first of all, extending the time of payment of succession duties from six months to five years and, second, making it possible to pay these taxes by instalments. As my motion deals with the payment of estate tax assessments in instalments I shall limit my remarks to this point alone.
It is of paramount importance to Canada to arrange the taxing statutes so as to encourage the retention in Canada of the ownership of Canadian enterprises and to encourage the development of capital within Canada. When the demands for taxes become confiscatory and so require the liquidation of a business at a sacrifice price, serious problems result. I submit that this is one of the reasons certain taxpayers are forsaking Canada and also why control of much of our heritage is being sold to foreign investors.
When the owner dies, in the case of a privately owned enterprise, six months is too short a time in which to secure the necessary funds to pay the succession duties. The widow or some member of the family may wish to carry on the business, but the payment of succession duties within six months is too great a drain on the capital reserve. Provided that a non-liquid estate furnishes the proper security and interest is charged on

this sum, Mr. Speaker, I am in favour of permitting the payment in instalments.
May 1 remind the house again of the difficulties of continuing family or small businesses or making a satisfactory sale of the business after the death of the owner. It does create real problems. Imposing the payment of succession duties within six months, only creates further problems and causes a forced sale, the loss of ownership, often to foreign investors.
I think I should draw the attention of the house to another hardship-the payment of these taxes within six months of death causes. When the survivor, in many cases a widow, has to make a forced sale of stocks or bonds, sales have to be made at low market value and this creates serious problems for the survivor, particularly in the case of a family owned corporation.
Another hardship that is often created by imposing the present regulations under the Estate Tax Act occurs in rural areas. I know of a case where the father, the owner of a large farm stocked with purebred cattle, died without a will. Within six months, the wife passed on, leaving two sons who had worked along with their father to build up this herd of purebred cattle. Not having the ready capital to pay the succession duties, which were quite large, they were forced to hold an auction sale. This purebred herd, which took years to build, was dispersed. The results, therefore, are detrimental to the building of a sound, agricultural economy in Canada. To say the least, it is disheartening to the survivors.
In conclusion, I say what I said at the beginning, that the estate tax, in respect of the payment of succession duties, should be amended to make death taxes payable in instalments, with interest in approved cases. Several representations have been made previously to the government on this matter by the national council of women of Canada, the estate planning council of Toronto. These organizations have presented briefs to the royal commission on taxation. I hope many members of this house will endorse their views on this very important matter and the government will give serious consideration to the amendment of the Estate Tax Act.


Mr. E. J. Benson (Parliamentary Secretary to Minister of Finance):: The hon. member for Wellington South (Mr. Hales) in his motion implies that the necessity to pay quickly an estate tax on the value of estate property in the form of an equity in a business enterprise that contributes a significant portion of the capital of that business forces the business to raise capital by selling out, often to non-Canadians, to a degree sufficient to change the ownership and control of the business. He

also implies that if the tax due could be paid in instalments, the number of such cases would be reduced.
Although the hon. member for Wellington South is not too precise in his motion, he is presumably thinking of a business that is closely controlled, perhaps by a family group, a business that is not usually listed on the stock exchange. This government, and previous governments, have given a good deal of thought to the possible importance of the situation envisaged by the hon. member. Although individuals have from time to time asserted that there is a problem, it has been found difficult to assess its extent because there has been little or no evidence, documentary or otherwise, submitted to the government. Sometimes a family owned business is sold shortly after or shortly before the death of a principal stockholder, but it is not known whether this is because of the problem of finding enough cash to meet his estate tax liability in respect of his shares, or whether there is no one in the family who is willing or able to carry on the direction and management of the business. It is also not known to what extent such businesses are sold to non-Canadians or for what reason. What is known is that, as of last December the industrial development bank, which was given additional powers in 1961, partly with this possible situation in mind, had not made any loans or purchased shares with a view to resale or entered underwriting agreements, specifically in order to prevent the forced sale of a business because of estate taxes. Again, however, this is not completely conclusive because the industrial development bank has made loans to businesses under second and third generation ownership, to assist in the growth or consolidation of such businesses and it is not possible to be certain in how many of these cases forced sale of the business would have been thought necessary if financing had not been available from the industrial development bank. In this regard, I would refer the hon. member for Edmonton West (Mr. Lambert), No. 648, which appeared on the order paper, and was answered earlier in the session.
Assuming that there is or was a liquidity problem, it would appear that the facilities of the industrial development bank are available in appropriate cases to solve it. In addition, there is already in the Estate Tax Act, section 16, a general provision that permits postponement of payment of tax in cases of undue hardship or excessive sacrifice. In so far as section 16 of the Estate Tax Act permits the minister to defer payment of taxes in cases of hardship which may be deemed to occur if payment is demanded too quickly, this situation may be covered. This might be useful in those rather unusual cases where
Estate Tax Act
the estates in question do not include enough of other assets, such as insurance or readily marketable securities to pay the tax, or where a loan on the assets of the business cannot be obtained. In most cases, such assets would be available in the estate of a reasonably prudent person, unless the value of the shares of the company and the tax thereon was very substantial indeed. As a matter of fact, estate planning has become more and more important during recent years, and I believe that more and more businessmen are providing for just such a situation as that envisaged by the hon. member.
There is, of course, another provision, section 15 of the Estate Tax Act, which provides for instalment payments in certain cases where the greatest liquidity problem arises. I am thinking of an estate where the sole or main asset is in the form of any income right, annuity, term of years or life or other similar estate. Generally speaking, I refer to a situation where there is a right to income in the future but no capital with which to pay the tax at present. There is not, however, any special provision for cases where there is capital but it is tied up in a family business. If a special provision were inserted in the Estate Tax Act to provide for instalment payments in such cases, this would be unfair to the estates of decedents whose property was in other forms, such as portfolio investments or real estate, or in the case of the farmer to whom the hon. member referred. Also, this would mean additional delays in the settlement of the estates affected and possible retention of the control of assets for a long time by the tax authorities.
There are also at least two other important considerations in assessing this proposal. One is that the provision of more time by allowing instalment payments of tax would likely not be of much help in meeting really large amounts of tax imposed on a large holding in a large company, for example, the holdings of Sir James Dunn in Algoma steel. The only way to be helpful in such a case, if no large liquid assets outside the business were built up over a period of time, would be to ignore the top rates of estates tax for this kind of situation. This would, of course, mean discrimination in favour of large estates and consequently could hardly be contemplated unless the rates were reduced for all estates.
The other consideration is that whatever was done in the way of relief would be offset to a considerable degree in the provinces that levy a succession duty-Ontario, Quebec and British Columbia-unless such provinces followed the federal government's lead. Another point which I think should be raised is that, beginning in 1964, the federal government has

Estate Tax Act
agreed to turn over 75 per cent of the succession duties collected to the provinces of Canada. This would mean that such a resolution, if it were considered by the government, would have to be done in consultation with the provinces, who would naturally be affected through their revenues if the payment were spread out over a longer period of time.
It should be mentioned that cognizance of this problem has been paid in the income tax law, which permits companies with large surpluses to get out the surplus by paying a modest tax, at a rate of 15 per cent, on certain conditions. In this regard I would refer the hon. member to section 105 of the Income Tax Act. The remaining tax-paid surplus can then be used to meet estate tax.
I would like to refer the hon. member to a memorandum submitted to the royal commission on banking and finance by Dr. A. K. Eaton, on October 23, 1962, and I would take the liberty of quoting from it:
It was suggested that comment might be offered in this memorandum on the problem of meeting payments called for under death duties (presumably federal estate tax and provincial inheritance taxes). The question relates not to the absolute burden of the tax but the problem of arranging affairs to have sufficient liquid assets on hand to meet the payments within the required time. Possibly the main point of concern here is whether death duties in Canada have the effect of driving the family type of business into selling out- assets or shares-to public companies, particularly foreign public companies, in order to meet tax obligations. If this were so, it would be regarded as bad.
Perhaps as a general rule it can be said that insurance is the greatest source of liquidity in estates in Canada. The addiction of Canadians to insurance is something to marvel at. It is very useful, however, as a source of ready cash to meet death duties. Normally also, most estates will show fairly substantial holdings of marketable securities, bonds which have a ready market and stocks of a type and diversity that create no problem upon fairly quick realization.
The greatest liquidity problem arises, of course, in estates where the sole or main asset is in the form of "any income right, annuity, term of years or life or other similar estate". Here, the federal law allows the tax applicable to such property to be spread over six years without interest. There are no such special provisions relating particularly to the situation where the main asset is a closely held family business-a going concern. There is, of course, a general provision in the law which gives the minister discretion to postpone tax (with interest up to 5 per cent) if he thinks the payment of it would cause "undue hardship or excessive sacrifice". It is not to be expected, however, that the necessity of selling out a family business at a fair price, where no preparation had been made by the deceased for meeting taxes on his death, would be regarded by the minister as either hardship or sacrifice. It would probably be looked upon as just plain carelessness.
In approaching this question of liquidity in the case of closely held family businesses, there is no point in attempting to sidestep the fact that death duties are very high in Canada. Plenty of family businesses are worth $1 to $2 million. The tax (federal and provincial combined) on $1 million is just over $300,000 and on $2 million, it is nearly

$800,000. From a $5 million estate, the tax would take close to half (54 per cent rate applies on excess over $2 million). Quite clearly, the so-called liquidity problem can be quite acute for estates of this size made up mainly of a single asset, a family business.
For smaller businesses, the problem is not nearly so acute. For a business worth $160,000 ($60,000 exemption for married), the tax would be $19,000. The man might have insurance enough to cover this and his son would be able to take over the business unimpaired.
An estate made up of a $260,000 business would have to pay $44,000 tax. Ordinary life insurance might not be expected to take care of all of this, so a trust company might have to be called upon to arrange for a mortgage on some of the business property for, say, $25,000. This should be practicable with no particular problem of retaining family control. Mortgage interest will, of course, cut into the flow of income to his heirs but this has to be expected. At the same time, the interest charge against the business is a deduction in computing profits for corporate tax purposes.
At the $560,000 level the problem is getting a bit worse. Here, nearly $150,000 will have to be found. Insurance can no longer be counted on to take care of much of the tax unless the deceased had been foresighted enough to have over the years taken out an insurance endowment policy specifically to meet death duties. Mortgages of higher amounts may have to be resorted to. Even so, it is reasonable to assume that up to the half million mark, there is no very good case for saying that the tax forces people to sell out a family business to a public company.
For a business of $750,000, the tax is just over $200,000, which calls for some pretty substantial financing. It would, however, still allow for a fairly reasonable equity-debt ratio for the business if a large portion of this tax liability were raised through mortgages.
Interest, of course, would be cutting deeply into earnings of the heirs but if the business were fairly profitable with good prospects, there should be no real hardship. Still, not a very good case could be made for abatement in tax provisions.
It is for estates of $1 million up that the so-called liquidity problem becomes acute. It was mentioned above that for a $1 million estate, the tax is over $300,000, for $2 million, nearly $800,000 and for $5 million, about $2.5 million. One cannot expect that tax money in these proportions will be available without careful planning a long time ahead. For the $5 million estate, it is too much to expect to have business as usual after the government has taken away half of it. Such a family business could only be continued as such if over a period of a good many years the proprietor had systematically built up a heavy position of liquid assets outside the business. He may have decided long ago that it was not worth it and accordingly, today finds himself among those who complain about taxation closing up his family business, having to sell out to pay tax. It is, of course, next to impossible to get a decent price for unlisted minority shares in a family controlled business.
Dr. Eaton continues on, and in the final paragraph of his submission he says:
Today the corporate tax on income up to $35,000 is only 21 per cent, with a 20 per cent dividend tax credit. This is fairly lenient tax treatment. The proprietor of the business can then gradually create tax paid undistributed income on hand and thus put himself in a position to borrow money on mortgage from his business and provide liquid funds for meeting estate tax. It is suggested here

that the way has been paved as far as is reasonably possible to enable family control of businesses in Canada to be maintained.
This was a submission by Dr. A. K. Eaton who used to be deputy minister of finance. To sum up, it would seem to be very difficult to ascertain or define the "appropriate cases" to which the hon. member refers in his motion, without discrimination; that the industrial development bank has been placed in a position to give the assistance envisaged by the motion in deserving cases; and that it is doubtful if anything more can be done without extensive revision of the provisions of the Estate Tax Act dealing with the time for payment and the rate structure, and without provincial co-operation.


Herbert Wilfred Herridge: Mr. Speaker, I rise to support the motion moved by the hon. member for Wellington South (Mr. Hales). Little did I think when I used to pal around with his uncle at college in 1909 that I would be supporting a motion of his in the House of Commons in 1963. Before proceeding I must congratulate the parliamentary secretary on his magnificent and curate-like reading of the liturgy prepared by the income tax department for this motion. I thought he did it very well. In fact he reminded me of a curate preaching a sermon to a questionable couple he has just married, and he is not quite certain about the future life they will lead.
First, let me say that the hon. member has introduced this motion as a result of discussions with his constituents and a knowledge of the hardship that has been experienced. I do not quite understand the resistance offered to the motion by the parliamentary secretary, in view of its very reasonable terms. I shall not read all the motion but it asks for consideration to be given "to amending the Estate Tax Act to provide for payment in appropriate cases of estate tax assessments by instalments so as to reduce the number of 'forced sale' liquidations of estate assets ..."
It is asking consideration for a problem many people face. I listened carefully to what the parliamentary secretary read. He used several arguments and mentioned the industrial development bank as a source to borrow money. Let me remind him the time limit is six months, and it usually takes from a year to two years to negotiate a loan from the industrial development bank. I know that, because several constituents of mine have mentioned their problems to me.
Then he said there was a provision which provides for postponement of the payment of these death duties in cases of hardship. Mr. Speaker, just try it, and see how long it takes you to get the question of hardship recognized
Estate Tax Act
by the department. I must say that the parliamentary secretary speaks from the viewpoint of the Department of Finance. From listening to his remarks, on that point, and the others which he read, I take it there is a complete lack of understanding that this is a problem faced by a good many people in small businesses and on family farms.
The parliamentary secretary read at great length from a submission prepared by Dr. Eaton, and suggested one should arrange one's affairs in such a way as to have liquid assets to meet these taxes. Does not the hon. gentleman know that you can be farming on quite a small scale, and successfully in that you are paying your way, and you can be running a small family business successfully but very often such operations, carried on in some cases from generation to generation because they provide a living for the families concerned, have made very little profit at the end of the year? These are the persons who are affected. Dr. Eaton suggests, through using the hon. gentleman as his mouthpiece this evening, that in such cases insurance should be taken out by the families concerned. But very often there is not sufficient profit to provide the insurance required to meet these death duties, which can be quite substantial and have increased rapidly in recent years. There are many properties that were considered in the first instance to cost very little but which have developed throughout the years, and because of inflated values now have a very much higher value than was the case ten years ago.
This presents a problem to the small business people or the family farm. I know what I am talking about because I have spoken to constituents who fear this sort of thing. I am quite sure that the hon. gentleman who introduced this motion is also aware of this problem, and has met persons who have suffered because of the present Estate Tax Act. We are not talking about the wealthy people with whom the hon. gentleman was more concerned, because he mentioned persons who had $500,000 or $1 million. We are concerned with the little people. This particular problem does not arise with large organizations; they have liquid assets such as bonds and shares that can be sold. It is when one has to sell a family concern or farm that real hardship is created. These small businesses and farms have to be sold to meet the present taxes.
In supporting this motion, Mr. Speaker, I claim that the present law does not give consideration to the immediate responsibilities of the heirs and the problems they face, particularly in the smaller income groups that have been mentioned. Second, the present

Estate Tax Act
legislation gives no consideration to the economic value to the country and the community of these small businesses and family farms, and in some cases small industry. I know small saw mill operators who have carried on quite successfully, not making much money, employing men from year to year and investing capital now and again in order to continue their operation. These people do not make much profit. They are people whose God is not the almighty dollar. They like to accept their responsibilities to the community. There is no consideration given to the economic value of these small businesses, family farms and so on. With those few remarks, Mr. Speaker, I conclude what I have to say, because I know there are other hon. members who wish to express their support for this very reasonable and practical motion.


John Cole: Mr. Speaker, the house is considering now a motion which we are very happy to support, and I wish to congratulate the hon. member for Wellington South (Mr. Hales) for having introduced it.
The motion urges the government to amend the Estate Tax Act in order to prevent the forced sale liquidation of many family business enterprises. In fact, Mr. Speaker, how many family businesses or industries, for instance, have been liquidated in Canada, especially in French Canada, owing to the implementation of the unfair Estate Tax Act? It would be really interesting to gather such information, because I know that we have suffered greatly from that situation, we of the province of Quebec, owing to the family type of business so popular in that province.
Mr. Speaker, family businesses have always been popular in the province of Quebec because they are consistent with French humanism. That is why most businesses or industries in Quebec are owned by families.
To date, we have many times witnessed the liquidation of businesses because the heirs or the executors had to sell some properties in order to pay estate duties. If legislation to provide for instalment payments of succession duties were enacted, it could help to correct a situation which has been truly disastrous, I would say in Canada, especially in French Canada.
And at this stage of my remarks, may I recall a great historic event to the attention of the house? It is that in 1760, just prior to the transfer of Canada to England, French Canadians had almost 100 million pounds of fiduciary money in circulation. Now, after the transfer of Canada, they were almost entirely
[Mr. Herridge.)
dispossessed owing to the new currency introduced in the country by the invaders. And it is only through the amount of work done by French-Canadian families that family, commercial and industrial wealth was restored and that there was gradually developed a type of family business which, as I just said, was consistent with French humanism, with the French type of business.
Today, many businesses are turning to the Anglo-Saxon or capitalistic type of company because there is a propaganda urging French Canadian industrialists and businessmen to operate as public companies, especially to protect themselves against the problem of succession duties.
In my opinion, it is very unfortunate that
we have to change this type of business which was the backbone of our people. However, for our own protection, we have to move toward this type of public companies, otherwise we would go on losing what we have succeeded in gaining, as we lost perhaps hundreds of millions of dollars in the past.
I hope that the commission which is inquiring into fiscal matters-I believe it is the Carter commission-will come up with practical solutions to reduce succession duties, for it is illogical that so many people and families who have acquired some property should be dispossessed in such a drastic fashion.
I feel that family property is sacred and I submit that governments have no right to dispossess families that way. That is why the Social Credit party is happy to support this motion which would slightly improve the present taxation system. We must go further than that, however; we must enact new legislation to bring about a considerable reduction in succession duties and taxes.
If all hon. members would take the trouble to examine the development of the monetary system throughout the ages, they might come to understand a little more easily how we passed, for instance, from the premonetary period to the bimetallism period, then to the fiduciary currency period and on to the credit money we have now in 1963-and God knows that credit money is practically the only one in circulation nowadays. Then we could proceed with monetary reforms allowing us to reduce the burden of enterprises, individuals and families.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I will only take a few moments to bring forward some of the reasons for my great interest in this motion. As a matter of fact, it was with a certain feeling of nostalgia that I listened to our genial hon. friend, the

parliamentary secretary to the Minister of Finance (Mr. Benson) give reasons that I have heard many times in this regard. I will not be at all reticent, Mr. Speaker, in telling the house that over the years I have advocated the principle of this particular motion. However, as with many other things, one sometimes has to wait a little longer for the better things in life.
I was interested, first of all, in the alternatives that the parliamentary secretary to the Minister of Finance indicated were available to businessmen under the Industrial Development Bank Act. I fully appreciate the attempt which was made in amending the Industrial Development Bank Act, but let me say this: it does not go far enough. I was fully aware that there have been no applications for this type of loan under the act. I know that in one case where application was made to protect a financial business worth at that time an estimated $3 million it was subsequently sold for $20 million. True, we are dealing with a big asset, but it is one where there had to be a sale and it was sold to foreign investment merely by reason of fear of the estate tax and the impossibility at that time of making adequate provision.
Dr. Eaton has a very theoretical and nice sounding proposition in the lengthy quotations we got from the parliamentary secretary, but this presupposes that owners of a concern are master of all the factors and that they can plan to the nth degree. Let me assure him that I am concerned with companies where one cannot do so. I can cite the case of one of our better growth companies, controlled by four men in their forties, which had to be sold to what I am sure was foreign capital because the principal shareholder could not get any insurance. He was uninsurable. This was a growth company where there were no accumulated reserves. The principals drew good salaries but their capital was tied up in the shares of that company and its subsidiaries. If you cannot get a term insurance with a buy-sell agreement, how can you protect the interests of the estate and the remaining shareholders who must make some provision for eventualities? There was no doubt in my mind that against the potential assets of the principal shareholders of this company there was going to be a substantial tax assessment. I know of other cases where Canadians have lost control. I am not going to name the companies; they come through knowledge acquired in my legal practice.
I would draw to the attention of the parliamentary secretary the discussion which took place in the taxation section of the Canadian bar convention this year. There were any
Estate Tax Act
number of representations in this regard. I find that most of the arguments against the principle are of an administrative nature. I would say that, in the case of a company, where there is an opportunity of getting an extension under section 16, there may not be too much sympathy shown on the part of the Minister of National Revenue. This is being realistic. It is my view that we should be able to make the appropriate changes in the act to provide for these cases, not only those referred to by the hon. member for Kootenay West (Mr. Herridge), but the much larger growth businesses of this country. I know at least half a dozen good companies which had to be sold. There was such an attractive offer of outside capital and, by that, I mean foreign capital, that on balance they said: Why put up with the worry about estate tax? Let us get the money now and we shall be able to sleep a lot more easily.
The parliamentary secretary spoke about the difficulties of retention of control. I think in the case of most of these companies the surviving owners are prepared to pay at least a proportion of the estate tax that is due. The balance can be put even on a basis of ten years, on annual instalments with interest. There is no doubt in my mind that with the continuing shareholders or the remaining shareholders carrying on the business, the business will stand a better chance of success than if it were to pass into other hands.
Now I come to this matter of payment to the provinces and the suggestion that the provinces would have to be consulted. But have they acquired a vested interest? I would say it goes only to the question of moneys paid in to the crown under the heading of estate tax or succession duties, and that a vested interest is not acquired in any estate whether within the boundaries of a particular province or otherwise. I am sure the act does not provide for that, nor do any of the agreements and, therefore, I cannot see that this question of the consent of the provinces would have anything to do with the matter. The provinces will ultimately get the money. This was an argument which did not carry much weight as far as I am concerned.
I think we have canvassed this problem sufficiently. I do feel that sufficient reason has been shown that the appropriate amendments should have been made to the act or at least been more seriously considered in the past. I am sorry the parliamentary secretary came to us with a speech or memorandum prepared on the basis of a closed mind in this regard rather than with a conciliatory, "we will have a good look at it". I think we should take a much better look at this question than we

Emergency Gold Mining Assistance Act have in the past, and I would ask members of the house to consider the resolution on that basis.


Mr. S. Perry Ryan (Spadina):: When I first read the motion of the hon. member for Wellington South to amend the Estate Tax Act, the words "forced sale" intrigued me. As to the allegation that the severity of this act resulted, in many cases, in the loss of control of Canadian companies to foreigners, my first reaction was that this was not so. After looking into the matter I remain unconvinced. There have been some cases where the necessity of paying estate tax and provincial succession duty has been cited as the reason, or an additional reason, for selling a controlling interest in a company to foreigners or to a foreign company. This seems strange when one knows that any company with good management can easily make arrangements to pay the taxes due to both jurisdictions.
When one hears such talk he should consider whether or not an excuse is being given by an incapable or disinterested heir for his failure to assume an unexpected or unwanted responsibility. I would say from my own experience that in almost every case of such a sale the real reason is that death has brought about an unusual circumstance. There has been a change of management or there has been no management left whatever.


Some hon. Members:: Six o'clock.



EMERGENCY GOLD MINING ASSISTANCE ACT


[Stage Direction]
House resumed consideration in committee on Bill No. C-124, to amend the Gold Mining Assistance Act-Mr. Benidickson-Mr. Batten in the chair.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at 8 p.m.
Clause 1 agreed to.
On clause 2-Act not to apply in respect of certain mines commencing production after June, 1965.
William Arnold Peters: Would the minister explain the new section 4B as set out in clause 2? What is his interpretation of this provision in relation to adding other areas that have been mining areas in the past and are not at the present time?


William Moore Benidickson: Mr. Chairman, is my hon. friend not thinking of clause 3? I did agree


this afternoon that I would readily accept an amendment to the schedule to include Beardmore in the list of communities, notwithstanding that clause 3 would still give the minister a right to add any other community that had not been properly thought of in the bill. The hon. member for Port Arthur explained this matter. Perhaps we overlooked Beardmore, simply on the ground it was not a community with a gold mine that was now getting a subsidy because it has a very high grade mine. However, if a similar circumstance should arise in the future we can add another community under clause 3.


William Arnold Peters: I am really not asking a hypothetical question and it does not concern the Geraldton area. What I have in mind is the development in the last three months of a gold producer in the Matachewan area. Mata-chewan has not been classed as a gold mining area for some time and has not really had anything else since the mines there closed a number of years ago. I understand that Rio Tinto has done considerable development in that area and that within a year or two there is a possibility of a producing gold mine there which will be 14 or 15 miles from the town of Matachewan, but will be making use of the town. It is with that in view that I ask the question.


William Moore Benidickson: I think we recognized it would be very unfair if there had been beforehand investment, thought and work before the time of passing this bill that would not come into fruition in a mine. I think it was on November 27 that I explained we had about 19 months notice of this and my advice is that this is fairly satisfactory. I might tell the committee that since I made the announcement on November 27 I have not had the slightest objection from anybody.


Mr. Baldwin:: Mr. Chairman, I want to make a very brief comment in support of what the hon. member for Pontiac-Temiscamingue said earlier in the debate. The effect of clause 2, as I see it, will not only be restraining but restricting with regard to the exploration and development of areas, particularly in the Northwest Territories to the north of my constituency where areas have been predicated initially upon this type of industry. I think we can look at the matter this way. It is not only a question of the actual moneys expended and the contribution to the economy in respect of the mining operation. In my view this can be regarded as simply the fuse which brings about a far greater explosion. The addition to the gross national product, when you consider the moneys expended and the exploration and development, is very substantial.

Small Businesses Loans Act
Today in the Northwest Territories the search has been extended far beyond places like Yellowknife, and it is my fear that if this clause is passed and retained it may well lead to a very substantial reduction in the rate at which exploration is now taking place. In the light of the fact that the Great Slave Lake Railway will shortly be at the south shore of the lake, I think the people in the Northwest Territories feel that as a result of the combined rail-truck rate that will be available, exploration will be substantially increased; but I am afraid that in the face of this particular restriction in this legislation it is very likely that expansion may not take place. I wanted to put my views on the record in support of what the hon. member said, because I think they are the views of many people in the Northwest Territories.


[Stage Direction]
Clause agreed to.
Clause 3 agreed to.
On clause 4.
William Moore Benidickson: I can't, but perhaps my colleague would move the amendment.


John Whitney Pickersgill: On clause 4 my colleague, the Minister of Mines and Technical Surveys, has asked me to move:
That the schedule be amended by inserting therein in the sixth position thereof the words "Beardmore, Ontario".


Lucien Lamoureux: Shall the amendment carry?


William Arnold Peters: Mr. Chairman, I should like to move that Matachewan, Ontario be added to the schedule in clause 4 after Madsen, Ontario.


William Moore Benidickson: I have no objection to that. I think it is the kind of amendment though that might involve an impost on the crown and perhaps will have to be moved by one of my colleagues. We want to be inclusive in this thing but, as I said, on the other hand we have the opportunity under clause 3 to add, if necessary.


John Whitney Pickersgill: I will be glad to take over the hon. gentleman's suggestion and move this amendment.


Lucien Lamoureux: Will the hon. member submit his amendment in writing.


John Whitney Pickersgill: If he will tell me how to spell it I will.


William Arnold Peters: M-a-t-a-c-h-e-w-a-n.


Harold Edward Winch: Do I understand that the Minister of Mines and Technical Surveys is prepared to accept it?


William Moore Benidickson: Yes.


Lucien Lamoureux: Is it the desire of the committee that the amendment now proposed by
the hon. member for Timiskaming should be incorporated in that moved by the Secretary of State? Agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time, now?


Some hon. Members:: By leave.


William Moore Benidickson: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



SMALL BUSINESSES LOANS ACT


John Whitney Pickersgill: the second reading of Bill No. C-122, to amend the Small Businesses Loans Act.


Edgar John Benson: Mr. Speaker, this bill contains amendments to the Small Businesses Loans Act which would enable the banks to continue making business improvement loans under this act beyond the end of the year. The present authority in the act for government guarantees of such loans expires on December 31, 1963. Legislative action must be taken now if guaranteed lending operations are to continue beyond that date.
Hon. members will recall that the royal commission on banking and finance was established in 1961 to undertake a broad review of the functioning of the Canadian financial system. The commission is expected to report within the next few months, and it can be anticipated that the commission has reviewed the whole question of financial facilities available to business, including small business enterprises. We have decided, in the circumstances, not to undertake an over-all review of this act until we can do so in the light of the report and recommendations of this commission. The proposed bill before us is accordingly limited to extending the act for another three years and to some clarifying amendments to the security provisions of this act, which can be usefully made at this time.
The Small Businesses Loans Act was passed three years ago to provide term credit for a wide range of business improvement projects to the proprietors of small business enterprises engaged in manufacturing, wholesale

Small Businesses Loans Act and retail trade, and in service industries. Loans of this type are made by the chartered banks with a government guarantee. The act limits the guarantee in effect during the current lending period, that is since inception to December 31, 1963, to a maximum of 10 per cent of the total of all secured loans made under the act by each bank, provided the aggregate principal amount of all guaranteed loans made by all banks does not exceed $300 million. In effect, this limits the government's maximum contingent liability in respect of losses on business improvement loans to $30 million.
During the first year of operations, in 1961, some 2,800 guaranteed loans totalling $25.6 million were made by the banks to small business enterprises. The number and volume of loans made under the act during 1962 were of similar magnitude, close to 3,000 loans totalling $25.7 million. Complete figures for 1963 are, of course, not yet available.
Turning to the specific provisions of the bill, clause 1 would amend subsection 2 of section 3 of the act to change the date to which guaranteed loans can be made from December 31, 1963, to December 31, 1966.
The Small Businesses Loans Act, like the Farm Improvement Loans Act and the Fisheries Improvement Loans Act, on which it was modelled, runs in three-year periods.
Clause 2 would amend sections 5 and 6 of the act to provide an additional lending period, extending from January 1, 1964 to December 31, 1966, during which guaranteed business improvement loans may be made by the chartered banks on the same terms and conditions as those applying to loans made during the first lending period. It also specifies that the aggregate sum of total business improvement loans which may be made during this period by all banks under the government guarantee is $300 million, the same limit which applied to the first lending period.
Clause 3 of the bill deals with section 8, the security provision of the act. This section, in general, empowers the bank to take mortgage security, including chattel mortgage, on loans made under this act notwithstanding section 88 of the Bank Act. Some questions on the legal interpretation of this section have, however, arisen in the course of lending experience, and it is considered desirable, following consultation with the bankers association, to clarify section 8 in two respects. First, the proposed new section 8 would make it explicit that the Quebec commercial pledge comes within the scope of this section. The commercial pledge is a civil code concept comparable to chattel mortgage, which was made applicable to business by Quebec legislation earlier this year. The second change

in section 8 would make it clear that mortgage securities can be taken not only as direct security for the repayment of a loan, but also in support of an endorsement or a guarantee given by a third party.
I am sure that hon. members will agree that the guarantee provisions of the act should be extended and that a review of its adequacy and effectiveness should be deferred pending the report of the royal commission on banking and finance. I can assure the house that it would be the government's intention to review the provisions of this act in some detail and to propose whatever changes are considered desirable after it has had an opportunity to consider the report of the commission, and that such a review will take into account comments and suggestions which have been or may be made in the house, as well as those of the business and banking community.


Hon. George C. Nowlan (Digby-Annapolis-Kings):: I am sure the house appreciates the statement made by the parliamentary secretary to the Minister of Finance (Mr. Benson) in respect of this bill. This measure, primarily, extends the period of an act which was introduced by the government of three years ago and carries it on for another three years. I am sure the house appreciates the figures which have just been given to us by the parliamentary secretary indicating the number of loans which have been made under this act.
I have a fairly clear recollection of statements which were made when the original bill was introduced. Hon. members said that this bill would be of little effect and that no advantage would be taken of it by the people of Canada. The figures which have been read tonight by the parliamentary secretary show how wrong those statements were, as have most of the statements which have been made by hon. gentlemen opposite. Even the statement made by hon. members opposite when they were in the opposition were to the effect that this act should not be enacted. This was just another one of the steps taken by the preceding government which resulted in expanding the economy of this country, the benefit of which this government is receiving at this moment.


Robert William Prittie: Mr. Speaker, we shall support these amendments, which are very necessary but rather minor. I am pleased to hear the parliamentary secretary state that a more thorough revision of this act is now under way, because it certainly needs it. Some points which I think might well be considered are, a better rate of interest for small businesses receiving loans under the act; the amounts might well be increased; and there is another aspect, that is

that the loans cannot be received for establishing a new business. They are only for existing businesses. There are a number of cases in which people have bought into old businesses, and not very good ones, in order to qualify for a loan under the act. There are a number of things of this nature which I think might well be reviewed.
I was checking the debates on this topic, Mr. Speaker, when the act was amended back in 1961. I noticed two very important Liberals were interested at that time, namely the hon. member for Essex East (Mr. Martin) and the hon. member for Bonavista-Twillingate (Mr. Pickersgill). They made a number of suggestions to the effect that you could improve or strengthen the act. Perhaps the parliamentary secretary would refer those to the minister when this matter comes up for review. They described the act as inadequate and puny in some respects.
I should like also, Mr. Speaker, to mention to the parliamentary secretary that it is one thing to give help to small businesses in the way of loans so that they can become established, but it is another thing to keep them going. I hope that somewhere along the line the Minister of Finance (Mr. Gordon) will consult with his colleague, the Minister of Justice (Mr. Chevrier), with a view to strengthening our anti-combines legislation. I shall not go very far into this tonight, but I want to speak about it again when the justice estimates are under discussion.
It seems to me rather useless to give this aid to small business on the one hand and then leave them prey to very weak combines legislation such as we have now. I should like to suggest, too, that when this department makes a report on the Small Businesses Loans Act they try to make the report a little more complete. I have in front of me the annual report for 1962, which is a very poor document. There is a small amount of statistical material, but that is all. There is not really very much meat here. I think it would be very useful if we could get some examples of the type of business which has been assisted by this measure. This report is very meagre and inadequate.
However, to conclude, I may say I had a speech prepared on the basis of the fact that the legislation needs looking at, but I shall forgo making that speech tonight since we have the assurance that the act will be reviewed after the royal commission on taxation reports. Meantime, we support the proposed amendments.


Horace Andrew (Bud) Olson: Mr. Speaker, we in this party intend to support the amendments that have been proposed by the parliamentary secretary. He said that the
28902-5-358
Small Businesses Loans Act act originally was to be of the same value to small businesses as the farm improvement loans legislation and other acts are to farmers and fishermen. However my experience with the Small Businesses Loans Act indicates it is not administered in the same way as the Farm Improvement Loans Act.
For example, we note there are some minor amendments broadening the basis for security, in the changes that are suggested. Under the Farm Improvement Loans Act a bank takes security only on the piece of equipment that is being purchased. In some cases it is necessary for a farmer to pay down 25 per cent or 30 per cent of the price, while the balance is financed over a period of from three to five years. Even if the farmer's credit rating is blemished a little, he is still able to avail himself of the provisions of the act, and small businesses should receive the same treatment.
I find that in many cases when a small business operator goes to a bank he finds there is no additional consideration given him, even though this act is in force. In other words, if a man's credit rating is not good enough for him to qualify under regular bank requirements for security, he is unable to get a loan under this act. Therefore I am pleased that the parliamentary secretary says the act is going to be reviewed and the basis for security should be broadened and extended. I did not hear him say the review would take place next session, in 1964, but I certainly hope that is the intention of the government. We give credit to whomever it was initiated this act, but I do not believe the practical application of it has been as extensive as was intended.


Mr. Real Caouette (Villeneuve):: Mr. Speaker, we greatly appreciate the amendments contained in Bill No. C-122 which tends to be more beneficial to small businesses in Canada.
In the past three years, many small businesses have been assisted through this legislation which, as the former minister of finance pointed out a while ago, was passed by the Conservative government and is now being renovated by a Liberal administration.
We are not interested in knowing which party did what, but we are greatly interested in the matter of loans granted to small businesses. While many small businesses received assistance, several others did not get any. They were asked to fill out forms, to offer guarantees and then their cases were subjected to unending studies.
The point I want to make is this. We have, for instance, the industrial development bank which assists small businesses and

Small Businesses Loans Act even large ones and which lends money at higher rates than those of the chartered banks but for a longer period.
This bill will allow the chartered banks to ask for more collateral from people and small industries which apply for loans, for expansion purposes or to keep their business going.
How is it that the Bank of Canada, or the industrial development bank asks for a higher interest rate than the chartered banks and how is it that the same industrial development bank does not assume greater risks as far as small industries are concerned?
There are small businessmen, small shopkeepers who are confronted with hardship, who are faced with a dreadful situation, in our country, in every province.
Why does Bill No. C-122 not stipulate that both the Bank of Canada and the industrial development bank are authorized to assume more risks in order to give more help to small businesses, even if hundreds of them have already been helped in the past?
We will certainly support the proposed amendments, but we would like to see the government take action to facilitate access to more credit for small businesses, because the help granted is often inadequate. Then a small industry or a small businessman cannot go very far. The point is to lend them more and at a reasonable rate of interest, that is a rate of interest that will not dispossess them.
Mr. Speaker, we support the proposed amendments, but at the same time we suggest that the government should as much as possible place the industrial development bank at the disposal of these industries and small businessmen, with an adequate and reasonable rate of interest.


Gilles Grégoire: Mr. Speaker, I merely wish to make a suggestion to the Secretary of State so that he will have the time to make the necessary amendment before study in committee.
I notice in clause 3, section 8 (1) (a) (i) of the French version that reference is made to:
.. ,un mortgage grevant des biens immeubles ou meubles...
In the same way, section (b) refers to:
.. ,un mortgage, une hypothcque ou une cession du genre...
It seems that the Secretary of State could amend the French version of the act by using a French word instead of the word "mortgage" written in italics.
In the case of real or personal property, it is rather a "garantie privilegiee".
[Mr. Caouette.l


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, this bill gives me an opportunity to say a few words about the success of the operations under the Small Businesses Loans Act which was introduced in 1960 and became really effective in 1961. The hon. member for Medicine Hat (Mr. Olson) was not sure who introduced it. I would like to tell him it was the former minister of finance, the Hon. Donald Fleming, in 1960, the same year that so much good legislation was put on the statute books.
My hon. friend from Wellington (Mr. Hales) who sits behind me, and who saw I was about to speak, warned me not to forget to tell how important the act has been for the tourist industry. I recall the many times I, and others, had the privilege of advocating assistance for service establishments to improve their accommodation and services to the travelling public. With the introduction of this legislation, and the inclusion of service establishments under it, tourist operations received a substantial lift.
The annual report for 1962 on the Small Businesses Loans Act, which came into our hands within the last few days, shows on page 10, under the heading "Loans to service businesses", that a total of 1,246 loans were made in the amount of $12,313,000. This means that 1,246 tourist operators, restaurant owners, motel and lodge operators have made substantial improvements to their establishments under the provisions of this act, and this accounts in no small part for the wonderful improvement we see in accommodation as we travel throughout the country. Just about the time this act was passed, the travel bureau was making a tremendous effort to reverse our deficit in travel account with the United States. In the year following the enactment of that legislation-although I know it was not entirely responsible-and in this current year there has been a wonderful improvement in our balance of payments in travel account. I will not go into that aspect now, except to state that it has improved. I think the fact that visitors have better accommodation, better restaurants and better facilities throughout encourages them to come to Canada and take advantage of the services that we have to offer.
It is not only the service businesses which have benefited, but also small businesses generally. On the same page of the annual report it is indicated that a total of 923 loans were made to the retail trade, totalling $7,710,000. The significant part of this report in tables 5 and 6 is that while the act was originally intended for the retail trade and small business, several of us who were

particularly interested in the tourist business prevailed upon the government, and in particular the minister of finance, to include service businesses in the act. This was done, and the minister at that time honoured me by acknowledging the efforts I had made. The significant part is that there were actually more loans made to service businesses than to the retail trades, which I think proves the advantage of including the service businesses in this act.
That is all I want to say on the bill, Mr. Speaker. We certainly approve the principle of extending the provisions of the act for a further period of time. There are still shortcomings in the legislation and they have become apparent as the act has been administered. I am glad to hear there is to be a review once again of the Small Businesses Loans Act and I hope we may be able to put it in a little better shape after the experiment of just over two years. The figures I have given of the total amount of loans actually only cover a period of one year, and I think this is indicative of the benefits Canadians have reaped from the Small Businesses Loans Act.


Marcel Lessard: Mr. Speaker, I should like to express my feelings about this amendment to the small business loans legislation.
I am pleased to see that the act is under review. That is why I want to participate in this debate and I should ask the Minister of Finance or his representative to consider how the amended legislation will be applied.
It is probably because this act was encumbered with red tape that it did not help small businesses as much as it should have.
It was a complicated act for those who wanted to secure a loan: they had to submit applications, fill out forms and submit to extensive investigations. I believe that such red tape has prevented many businesses to take advantage of that assistance.
I would like this bill to be considered in the light of the planning which has been proposed by the present government.
I wonder what those celebrated planning experts within the government are waiting for? They have stood in the forefront to sell the idea of planning as being a panacea. I see some of those experts: I see one in particular who has been formerly with the department of industry of the province of Quebec. I wonder what they are doing at the present time in the planning of industry in Canada so as to check unemployment as soon as possible.
Mr. Speaker, I think this Small Businesses Loans Act is a formula through which the
28902-5-358J
Small Businesses Loans Act present government can not only help already established businesses but mainly help towards the establishment of new ones. I think they could give special encouragement if they could provide a special interest rate in the case of businesses which would be engaged in the production of consumers' goods or of some small industrial machinery.
I think the industries setting up in the services sector are also useful. But I think at this time, we mostly need small businesses involved in the production of smallwares which are consumed every day in the country and which can be bought only on foreign markets. All we see is "made in Japan", "made in Italy", "made in France" or "made in England". We seldom see "made in Canada" as far as smallwares are concerned.
That, I believe, is the field of small businesses. In the old countries, the small enterprise is a major factor of stabilization thanks to which unemployment is inexistent, because they develop readily when they have some incentives.
Such encouragement, Mr. Speaker, is up to the hon. members opposite and to the planning officers to give. I think that it is in the matter of interests, that adequate incentive can be given to those small undertakings. They can also be given incentive in terms of taxation. I believe that the income tax reports they have to file to meet the requirements of the government should be simplified.
Mr. Speaker, my suggestion should be taken into consideration by everyone, if we wish that this legislation providing assistance to small businesses meet the purposes for which it is intended, namely to help existing businesses. Furthermore, it is our duty to stimulate our industrialists and to encourage them to invest and establish the industries required at the present time in Canada.


Herbert Wilfred Herridge: Mr. Speaker, I want to make what might be termed a miniature speech. I rise to support the principle and purpose of this bill, which includes some necessary amendments as a first step to further amendments that we look forward to in the very near future. I want to say a few words on this matter because I see the parliamentary secretary is, shall I say, closer to the opposition in respect of the terms of this legislation than he was in the debate that occurred between five and six o'clock and I am going to take the opportunity to make a few suggestions in view of the review promised by the parliamentary secretary on behalf of the government.
This type of legislation was advocated for years by members of this party and we were glad when the former government originally

Small Businesses Loans Act introduced this act and also legislation to improve credit facilities for farmers. We must give them credit for that; they were both steps in the right direction. We look upon this as pilot legislation. This is the foundation upon which can be built an act that really works and serves the purposes for which it was enacted. It requires considerable amendment to meet various types of small business and small industry local conditions and circumstances. I have had some experience of the matter through discussing this act with retailers and small business people who have taken advantage of it, and a great many more who were unable to take advantage of it because of its present terms.
In view of the review that has been promised by the parliamentary secretary I am just going to take a few minutes to lay the groundwork for the philosophy which I think should govern the review when it is undertaken by the government. The development of monopoly control in business, with its consequent effect on small business, has been recognized in Canada for years. As I mentioned before, members of this party sought legislation of this kind for over 25 years in this house. I have read some of the speeches made in the house by the first members of this party. The retail merchants of Canada and other organizations made representations to government after government before they were able to get the legislation accepted by the government, or at least the pilot legislation put on the statute books of Canada. Then the government, commencing in 1956, published a small business manual, which I think was again published in 1957 and 1959. Later the small business branch of the Department of Trade and Commerce was established. The legislation that we are considering this evening followed those steps. I hope the parliamentary secretary is listening, because I want to quote some very good authorities. It may interest him to know that even John Buchan, former governor general of Canada, recognized this problem in his book "Pilgrim's Way" in 1940, in which he has this to say about the basic dilemma that confronts us now:
Somehow or other, we must make our social and economic world more fluid. We must widen the approaches so that honest ambition and honourable discontent may have elbow room. The world must remain an oyster for youth to open. If not, youth will cease to be young, and that will be the end of everything.
I think that is very well put. The problems in small business have been considered in the United States and in other countries for some years. We are not alone in facing this problem. It is one which has developed because of the needs of a changing society. A cabinet committee in the United States made


a report on small business in 1956. I think this is what prompted us to take action. In addition, a good deal of literature has been published on this subject. I wish to conclude by quoting from the United States report I do not often go to the United States for my quotations but I think this one is particularly apt:
Now is the time for all good men, regardless of party, to come to the aid of small business. The good society of the future which we seek in the face of war's terrible sacrifices cannot exist without small business, and small business cannot fulfill its part unless the necessary steps are taken to allow it the opportunity to function. This means giving it access to capital, especially equity capital, the vigorous enforcement of anti-monopoly laws, and encouragement in the way of tax relief or incentives.	.
Once again we must choose. Either we wish to maintain free enterprise, modified in the course of industrial evolution to fit a twentieth century abruptly with our traditions to embrace a society of big business only, with cartelization and monopoly as accepted features.
I think that is very well put when one considers the source of the quotation. Members of this group believe that socially desirable free enterprise, where the genuine element of competition has free play, has a significant and important role to perform within the framework of a democratic and socialist planned economy directed towards definite economic and social objectives and designed to provide peace, plenty and progress for all.
In concluding I suggest that the review which it is proposed to undertake should include an extensive study of the operations of this act across Canada in various regions and in various fields. I have found that in many cases small business people require more information. I was talking to a businessman in Trail this summer. He had spent $25,000 improving his premises and then he applied for a loan under this legislation in order to buy stock. If he had been informed as to the situation he would have borrowed the money to improve his premises and kept his capital to buy his stock. That was unfortunate. I am familiar with other instances of local businessmen, sound men in their own enterprises, who lack an understanding of the operation of this act. I draw this situation to the attention of the parliamentary secretary. Again, I find that some bank managers are not too co-operative. I know four or five cases where businessmen who went to a bank intending to take advantage of the provisions of the act were, to some extent, cold shouldered. As a result, they applied to the credit union in that city to borrow the money that was necessary, in some cases up to $10,000, and without difficulty, because their enterprises were sound. On the other hand, some managers were co-operative and

anxious to inform local businessmen as to the terms of the act and how they could take advantage of it.
I suggest that some of the officials of the department should visit certain regions and become acquainted with the opportunities which exist there for the expansion of small business. In the constituency from which I come there is an opportunity for the expansion of small lumber businesses. Other men are in the logging industry contracting for larger companies. There are opportunities for the expansion of the tourist industry. I know a few tourist operators who have been taking advantage of this act; the loans have been of benefit to them. I know others who could not qualify because of particular circumstances.
In conclusion I would urge, again, that the department send some of these officials out into the field. There is nothing like talking to these people. It would be a good idea to get in touch with businessmen's organizations, chambers of commerce and farmers' organizations interested in business in a small way, in a co-operative way. Thus the officials would get a picture of the numbers and the kind of people whom this measure is intended to serve. It might also be a good idea to have a school for bankers, perhaps one school in each province. The purpose of the act could be explained at these schools, and the suggestions of those attending could be sought. I am sure that in this way we could greatly improve this pilot legislation so that, ultimately, it would perform the function it is intended to perform.


[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-Time after which minister not liable.
Edgar John Benson: I should like to assure all members opposite that I have listened with great care to their representations with regard to this legislation and, like the members of the official opposition who spoke, I believe that this legislation, which they brought in, is good initial legislation. We hope that in the years to come we can make it even better legislation, and I assure them that we shall bear in mind, as well as the suggestions they have made, the suggestions which were made by the hon. member for Essex East and by the hon. member for Bonavista-Twillingate when they were on the other side of the house.


Gordon Harvey Aiken: I wonder if the parliamentary secretary has any information as to the loss ratio under the act?


Edgar John Benson: The losses under this act, up to the report we have here, have been nil.
Small Businesses Loans Act A few losses have been incurred to date, in 1963, but I am informed by the officials that they are infinitesimal.


Thomas Clement (Tommy) Douglas: On second reading the minister gave the figure of the total amount of loans granted. Could he tell us again what those figures were?


Edgar John Benson: They were roughly $25 million and $28 million in the two years which have been completed. There could have been many more loans made under the act, had they been applied for. The total amount of loans which could have been made was $300 million, so it is clear that full advantage was not taken of this measure. Like the hon. member for Kootenay West I believe a greater dissemination of information about this act among the business community would be useful and this could be encouraged by members of parliament, since the act is clearly useful to small business.


Thomas Clement (Tommy) Douglas: In other words, the total amount of the loans made during this period of the act's existence is less than $60 million.


Edgar John Benson: Together with the 1963 figures it would run, I think, in the neighbourhood of $90 million. It could have been $300 million had the loans been applied for and approved by the banks.


Thomas Clement (Tommy) Douglas: Only about 30 per cent of the capacity has been utilized.


Edgar John Benson: That is correct.


Thomas Clement (Tommy) Douglas: In the new period there will be another $300 million of loans which could be granted. I think these facilities would be more fully utilized if there were some publicity given to them by putting pamphlets in the branch banks where they would be readily available to customers. I am sure the parliamentary secretary is fully aware that $80 million or $90 million does not begin to represent the kind of business credit which could be utilized. I should like to ask him a further question. When this measure is under review, what aspects of the act are to be considered-the methods by which the legislation is to be extended? Perhaps the hon. gentleman could say a word about this.


Edgar John Benson: I can assure the hon. member that the entire act will be reviewed. As I mentioned on second reading, the department and the government have been waiting for the report of the royal commission on banking and finance. When that report comes down, the entire act will be reviewed in the light of its recommendations to see how the legislation can be improved so as to better serve its purposes.

Small Businesses Loans Act


Thomas Clement (Tommy) Douglas: Then I take it, it is not the intention to leave such a review until 1966 when the act has to be amended again to provide for another period of loans?


Edgar John Benson: No, it is not.


Horace Andrew (Bud) Olson: I have not heard the parliamentary secretary say, even yet, whether it is expected this will he ready for the next session of parliament.


Edgar John Benson: I would not like to indicate that it would be ready for the next session of parliament. It will be several months before the royal commission on banking submits its report and it is evident that it will take some time for the report to be considered and for the act to be reviewed. I would not like to say it would be in the next session but I can assure the hon. member that it will be as soon as it is physically possible to do it.


Horace Andrew (Bud) Olson: Perhaps the parliamentary secretary would undertake to review the matter to the extent of making some major amendments with respect to the security required under this act. This is one of the greatest problems, and I think it is also one section of the act that is far different from the Farm Improvement Loans Act. If the report that he requires is not available for the next session of parliament, perhaps he can give us some assurance that the basis of security will be reviewed and some amendments brought in at the next session.


Edgar John Benson: The hon. member will realize that I am not in a position to assure him what legislation will be brought in at the next session of parliament. I can assure him that his question with regard to the matter of security will be brought to the attention of the government and will be considered by the government.


Mr. Starr:: Mr. Chairman, I think it is unfortunate that only some $90 million was lent out of a possible $300 million in that period of time. I do not think it has been a case of people not wanting to obtain loans. I believe many businessmen have applied for loans to branches of various banks where managers in some cases were not aware of the legislation or were not willing to make loans under the Small Businesses Loans Act, particularly to those people whose credit was such that they would be eligible for such a loan. I agree with the hon. member for Burnaby-Coquitlam that there should be a conference with the heads of the banks so that they can reach down into their branches, acquaint their managers with the Small Businesses Loans Act and thus give some impetus to the matter. I think it would have a great


effect not only on the expansion of business but also on the economy generally.


Edgar John Benson: I will certainly bring the hon. member's representations to the attention of the officials who are responsible for administering the act.


Thomas Clement (Tommy) Douglas: Is there a booklet or pamphlet that we could get so that the boards of trade in the various constituencies could be circularized? I am not referring to obtaining any tremendous quantity but simply sufficient for that purpose.


Edgar John Benson: I am not sure that there is. I believe there was a pamphlet put out but I am not sure. However, I will look into the matter.


Thomas Clement (Tommy) Douglas: If such a pamphlet were prepared and distributed early in 1964 it seems to me it might result in a much larger number of loans being made in the next three year period than in the last.


Edgar John Benson: I agree that the aim should be to see that the provisions of the act are more fully utilized in the future and I think the hon. member can be assured that with such an active government in power every opportunity will be taken to see that the act is more fully utilized.


George Clyde Nowlan: Mr. Chairman, I might say that the preceding government, which was much more active, issued a booklet and everybody was advised of the nature of the loans which could be made under the act.


Gordon Harvey Aiken: Mr. Chairman, there is one matter I should like to have reported upon, while the royal commission and the government are considering this matter. As the hon. member for Ontario has said, one of the difficulties under the Small Businesses Loans Act is that many bankers do not seem to be fully aware of the loans which are available under this legislation and, furthermore, are somewhat reluctant to use the provisions of the act. I know that in quite a number of instances applications for loans to banks under the act have resulted in the bank making a direct loan without using the provisions of the act. I should like to have an inquiry made from the banks and some report, if possible, as to the amount of loans stimulated by applications under the Small Businesses Loans Act which the bank may not have felt required a government guarantee.
If we had those figures I think we would find that the effect of the Small Businesses Loans Act has probably been much greater than appears in the report. I know of many cases where people wanted loans and the banks felt they were good security risks and

made the loans to them directly, instead of making them under the Small Businesses Loans Act. I think that figure would be very significant.


Edgar John Benson: From my previous experience in professional practice as an accountant I found that in many instances businesses had approached banks for loans under the Small Businesses Loans Act but the loans were made on the credit of the individuals without the banks considering the government guarantee necessary. However, I doubt that the information requested would be available inasmuch as we would only have a record of loans that were actually made and forwarded to the government for guarantee. I doubt that the information could be accumulated.


Gordon Harvey Aiken: I am merely suggesting that the information could possibly be secured in general form, if not in statistical form, if the banks would seek such information through reports from their managers.


Edgar John Benson: I would think that in a general way that might be true.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Bank security.
Gerald William Baldwin: Mr. Chairman, I want to make a very brief observation and ask a question of the parliamentary secretary. I understand that the purpose of clause 3 is to clarify certain doubts that may have arisen with regard to the original legislation, and the clause purports now to include a commercial pledge of movable property as required in the province of Quebec and refers to the types of security that can be taken and also the security given by guarantors. The question which runs in my mind is this. Is this amendment intended to validate securities of this description which might have been taken in the past or is it simply to deal with those which are taken from now on? I have no brief in this matter one way or another, but I think it might be useful to set at rest any doubts that may exist in the minds of those in the banks who may have taken securities of this type.


Gilles Grégoire: Mr. Chairman, I wonder if the parliamentary secretary to the Minister of Finance (Mr. Benson), would be ready to change the words I mentioned a moment ago? I think that the specific term which should be used in both places is the word "guarantee".
The word "mortgage" is in italics; if taken in its English sense, it has one meaning, while in French, it may have quite a different significance.
Small Businesses Loans Act
Even in the English sense, the term may have two different meanings, and I feel that in both paragraphs the words which are used may lead to a misconstruction.
Perhaps the parliamentary secretary would be ready to suggest the replacement of the word "mortgage" by the word "guarantee"?


Edgar John Benson: In answer to the hon. member for Lapointe may I say that I am informed by the Minister of Public Works that the word "mortgage" is a proper word in French. It is in Petit Larousse as a proper word and it is quite proper to be used in this sense.


Gilles Grégoire: Mr. Chairman, the word may be in the Petit Larousse but I will make bold to point out that it is written in two words, with a hyphen. In days gone by, the term was applied to various articles that people deposited in pawn-offices or in religious communities, and for which they had to pay an exorbitant interest rate. A time came when that method was forbidden. Such a method was called in French mort-gage. Today the word does not have the same meaning as in previous centuries; as the word is written in italics, I feel that in the French text it retains its English meaning.


Mr. Deschatelets:: Mr. Chairman, I think that the remarks of the hon. member for Lapointe (Mr. Gregoire) are well founded.
I studied the bill, a little while ago, and I must say to the hon. member that there is a fundamental difference between the civil code of the province of Quebec, which was modelled on the Napoleonic code, and the British common law.
Moreover, as the word "mort-gage" is used in French, I am of the opinion, according to the Petit Larousse, that we would be ill advised to move this amendment tonight as the experts who have reviewed the text have precisely taken into account the differences between the common law and the civil code of the province of Quebec.
Besides, I am convinced that if there had been a serious mistake in the use of the word mortgage, I would support the remarks of the hon. member. But as it comes to use one word authorized by the Petit Larousse, I wonder if it would not be advisable, under the circumstances, to let the text stand as it is now.


Paul Raymond Martineau: Mr. Chairman, with reference to the explanations given by the Minister of Public Works (Mr. Deschatelets) who mentioned the definition of the word "mortgage" as it appears in the Larousse dictionary, I must say that I read this definition which is as follows:

Small Businesses Loans Act
"Gage dont on laisse jouir un crdancier, sans que les fruits dont il profite soient imputables sur la dette."
This might very well be the minister's intention but, in my opinion, it is very doubtful.
I feel that the word privilege should be used instead, because a privilege can encumber personal property and real estate, whereas a mortgage can only encumber real estate.


Jean-Paul Deschatelets: In the province of Quebec?


Paul Raymond Martineau: Yes, in the province of Quebec.
Since this legislation would use a word which does not appear in the civil code of the province of Quebec, I agree with the hon. member for Lapointe (Mr. Gregoire) that we should perhaps substitute the word privilege.


Gilles Grégoire: Mr. Chairman, we accept the word privilege which the hon. member for Pontiac-Temiscamingue (Mr. Martineau) has suggested. The definition he has given is not quite the same as the one I read, but it is good just the same. It would be a pledge left with the creditor who would not enjoy the product.
Now, in this instance, if a man borrowed money from a bank he would not leave the pledge with his creditor. He will just simply continue enjoying the product of his pledge.
However, if we used the word mort-gage, as defined in the Petit Larousse dictionary, the objective of the act would not be served. Obviously, the person who drafted the bill gave a modern meaning to an English word; in this case, "mortgage" applies to both movable and immovable property. Now, in the province of Quebec, there can be no "mortgage" or hypotheque on movables:
Moreover, if you read the bill, you will see that the same words are used twice. Indeed, subparagraph (il) reads as follows:
-a commercial pledge of movable property evidenced by a deed-
Throughout the bill, the word is used three times with both meanings. I feel that the word privilege would be quite adequate and would be agreeable to those who care for accuracy in legal terminology and in language in general.


Mr. Macdonald:: If I may, I should like to point out that not only are we attempting to translate an English word, but we are also attempting to translate an English concept of law. There is no such thing as a hypothec in the province of Ontario. Even in a riding such as that of the hon. chairman, Stormont, there is no such thing. What

we wish to put in by virtue of this terminology is the concept of a mortgage. With a common-law mortgage the title transfers from the mortgagor to the mortgagee, which is unlike a hypothec. When you are referring to a mortgage in English and hypothec in French, you are referring to two different concepts. You have a hypothec in the province of Quebec, but it does not exist in the province of Ontario. For the people using the English language, we have to put in the word "mortgage", and for the French we use "hypothec", but we are referring to two entirely different forms of legal encumbrance.


Mr. Cote (Chicoutimi):: Mr. Chairman, I hope that the subtlety of the French language will not put us on the warpath about this matter-the Wars of the Roses.
I know a big finance company which is named Credit-Mortgage, Credit M-G, Inc., which is related to the Societe Nationale D'assurance and the Societe d'assurance L'Economie, all subsidies of the St. Jean Baptiste Society of Montreal, which, in other respects, takes guarantees or privileges on real property by using the word mort-gage, as indicated a while ago by the Minister of Public Works.
That is why I am personally in favour of this word.


Paul Raymond Martineau: I should like to put to the parliamentary secretary to the Minister of Justice (Mr. Macdonald) a question relating to the definition of a mortgage enjoyed by a creditor.
Is it then the intention of the legislator that the bank, which is the debtor in this case, which grants the loan, takes as security the property of the borrower or of the businessman who obtains a loan in accordance with this act?
Before giving him a chance to reply, I think that he will say: Not at all. If his reply is "Not at all", this word has no longer any meaning, and that is why I suggest that it be striken out and replaced by the word "privilege".


John Whitney Pickersgill: I should like to say a word about that. The hon. gentleman was a privy councillor when this bill was introduced, upon the recommendation of the government of which he was a supporter. They must have had some reason for putting it in at that time. Perhaps the hon. gentleman can tell us.


Paul Raymond Martineau: I think the Secretary of State is making an argument ad hominem. If I am not mistaken, the purpose of this bill

before the committee is to improve the act. The Secretary of State, by his intervention, has certainly not improved either the bill or the general tenor of this debate. I should like the parliamentary secretary, who seems to have much more knowledge of the subject than the Secretary of State, to give this matter his learned attention.


John Whitney Pickersgill: I think the hon. member for Rosedale, the parliamentary secretary to the Minister of Justice, really explained the point. If the bill is looked at carefully, and I am speaking very seriously but without the learning and knowledge of people like the hon. member for Rosedale and the hon. member for Pontiac-Temiscamingue, you will see that the word is in italics. It is in italics because it is obviously meant to be an English word, not a French word. It is not meant to be a translation any more than hypothec, which is put in the English translation, is a normal English word. The law is being made for the whole of Canada, in both languages, and it must contain both concepts, the common law and the civil code. I believe the hon. member for Rosedale really made that point, and that is the reason the word is there.


Louis-Joseph Pigeon: I should like to ask, is it the intention of the minister to suspend the bill and consult Dr. Ollivier, the specialist on this matter?


Gilles Grégoire: Mr. Chairman, the Secretary of State has just clearly indicated that, in this legislation, the word mortgage is used in its English sense. It is thus, by the admission of the Secretary of State himself, an English word which is being used in the French wording of an act. Personally, I am not at all satisfied, not only from the language standpoint, but also from that of the meaning of the civil code, for the word mortgage in English corresponds to the word hypotheque in French, and according to the civil code of the province of Quebec, personal property cannot be mortgaged. But it is said in the act that:
-a mortgage upon real or personal property-
Therefore, not only is it proposed to use an English word, but also it is suggested to use it in a sense that would not be applicable under the civil code of the province of Quebec.
On the other hand, I maintain we are given a general description where it is said:
-a mortgage upon real or personal property-
At that point, the person who wrote the act realized that the sentence was ambiguous and, to be more explicit, he added:
-a hypothec upon real or personal, immovable or movable property-
28902-5-359
Small Businesses Loans Act
He added, in the case of movable property:
-a commercial pledge of movable property evidenced by a deed-
Which means that the first term is a general one. Therefore, instead of using a specific term in a general context, I would use a general term in a general context, that is to say what the hon. member for Pontiac-Temiscamingue suggested: a privilege upon immovable or movable property. Then comes the provision:	hypothec upon immovable
property or a commercial pledge on immovable property.
Then the demands of linguistics and the civil rights of the province of Quebec are taken care of.


Jean-Paul Deschatelets: Mr. Chairman, I think we can credit the hon. member for Lapointe with starting a very interesting debate. We are all very happy to have spent a few moments on that problem. But if he studies this bill closely, I think the hon. member for Lapointe will see that the word "mortgage" has been in the act for the last three years. It has been understood clearly and its meaning well established.
We admit that the hon. member for Lapointe raised a very interesting point, but I feel that, in the interest of all, we should leave the bill as it is, with the word "mortgage".


Paul Raymond Martineau: Mr. Chairman, the argument advanced by the Minister of Public Works is not very impressive, because we are amending this act precisely to improve it and one of the reasons for which we want to amend this clause is that, under the civil code of the province of Quebec, the word "mortgage" is not always applicable. In fact we have the word "mortgage": a mortgage on immovable property. Here are listed a number of ways by which the creditor can be protected in the province of Quebec. As a rule, as there cannot be any mortgage on movable property in the course of business, we agree rather to a conditional sale by which the creditor becomes the owner of the property on condition that the debtor may repossess it by paying back the amount owed.
That is why we are not going to be stopped by the argument of the Minister of Public Works who says: The act was passed two or three years ago and nobody complained about that expression.
If, today, it is advisable to improve this legislation by replacing one word by another, I submit to the committee that we must do so.


Mr. Marcoux:: Could the parliamentary secretary give us the exact definition of

Small Businesses Loans Act "mortgage", and "hypothec" since both terms are used?


Donald Stovel Macdonald: The definition is as follows: a mortgage is the creature of English common law, as used in the other nine provinces; hypothec is a creature of the civil code as used exclusively in Quebec. In a mortgage the title in the property passes from the man who owns the land to the mortgagee, the man lending the money. Under the hypothec the ownership does not pass. From a lawyer's standpoint there are two entirely different concepts arising from two entirely different codes of law, and when the hon. member for Lapointe says mortgage is unknown in the civil code he is perfectly correct. I suggest the reason it is in italics is because it covers an entirely different system of law.


Paul Raymond Martineau: I would like either the Minister of Public Works or the parliamentary secretary to explain what would be the position of a lawyer from Quebec reading this clause. If he refers to the debate which took place when the bill was being studied or adopted by parliament, he will see that the parliamentary secretary to the Minister of Finance stated the reason mortgage was in the French was because "mortgage" was a word recognized in the French language and found in the dictionary Larousse, and then he finds according to that dictionary "mortgage" is quite a different matter from what the bill envisages. Surely it is not the intention of the legislation that the borrower remit to the person who lends the money the goods he must keep in order to make his business operate?


Jean-Paul Deschatelets: I think it is easy to answer. We should be practical in this field because we have to take into consideration that this act has been used for the past three years, and I am told there has never been any complaint, any misunderstanding as to the difference in terms in French and in English. The term is well known, and I think we should go ahead with the bill.


Paul Raymond Martineau: The minister says there has never been any misunderstanding. I say there has been a lot of misunderstanding. I know many people who went to the banks in Quebec to apply for loans under this act and they were told, "We are very sorry. This act is not applicable here because under the civil law in Quebec we cannot get the required guarantee and therefore we must refuse a loan."


Gilles Grégoire: Mr. Chairman, I think the parliamentary secretary to the Minister of Justice tried to confuse the issue a little when he gave a definition of the terms. Further

evidence of the fact is that another crown corporation is called "Central Mortgage" in English and "Societe centrale d'hypotheque" in French. In this case, "mortgage" is given the same meaning in English as hypotheque in French.
However, there can be no hypotheque on movable property in the province of Quebec and if we keep the word "mortgage", we will be going against the civil code of Quebec. If the word "mortgage" is to be applied to both movable and immovable property, I am afraid there will be confusion. In addition, as the hon. member for Pontiac-Temiscamin-gue said a while ago, the use of that word would not always be in accordance with the civil code of the province of Quebec.
I agree with the Minister of Public Works that this mistake has been existing for three years, but this is no reason to allow it to last forever. There is always room for improvement, in my opinion, and if a mistake has been made, let it be corrected and let the wording of the act be improved.
It is not the first time that members of the house have complained of sentences that are too long, of wrong punctuation, of improper terms and mistranslations. It is time to see that such mistakes are corrected. With enough suggestions of this type, the drafters will finally improve the wording and terminology of the statutes.
This is why I suggest that the Secretary of State, the parliamentary secretary to the Minister of Finance and even the Minister of Justice (Mr. Chevrier), who, I am convinced, was appointed Minister of Justice because he was a good lawyer, must admit that I have a good point when I say that the word privilege should be substituted for the word "mortgage" everywhere it is used. By doing so, we would meet the requirements of the language as well as those of the civil code and the common law.


Donald Stovel Macdonald: If I might just refer to that, I agree that the term "hypothec" is used in the French title of Central Mortgage and Housing Corporation, but I suggest that is a form of convenience. This is a technical statute, a legal definition of the type of property, and I would point out that the second line in the English version has absolutely no meaning in English law. The term "hypothec" imparts no legal right under the law of Ontario.


Gilles Grégoire: Mr. Chairman, I would like to know if the Secretary of State is ready to move himself that the word be changed?


Donald Stovel Macdonald: This, I think, illustrates better than anything else that we have two systems of law in this country.


Sylvester Perry Ryan: I would like to point out that at the time of William the Conqueror this word "mortgage" came into the English language from the French. At that time it meant a dead pledge. The French dictionary has the words "mort" meaning dead or lying idle and "gage" meaning pledge or pawn. The word "mortgage" is still in the English language but maybe it is not still in the French language.


Gilles Grégoire: Mr. Chairman, I would have liked to know whether the Secretary of State was willing to change the term in question. [Text]
Mr. Fair weather: It is ridiculous to change the word just because the hon. member for Lapointe does not understand this is a statute designed for the whole country, and not one part of the country. We use one part of the clause for one part of the country, and the other part of the clause for another part of the country. This is bilingualism and bicul-turalism at its best, and I suggest that we get on with the debate.


Horace Andrew (Bud) Olson: I would like to ask the parliamentary secretary if the interest rate has been the same on all of the loans granted, regardless of their size, type of security, or the length of the loans? Is there one single interest rate or are there minimums and maximums?


Gilles Grégoire: Mr. Chairman, before clause 3 is carried, we would point out that we suggested to the government to use a term in keeping with language requirements and that the government is refusing to do so at present.


Edgar John Benson: The maximum rate under the act is 5i per cent. The banks may charge a lower rate but they may not charge a higher rate.


Gerald William Baldwin: Perhaps the parliamentary secretary would deal with the point I raised.


Edgar John Benson: I can tell the hon. member that subparagraph (ii) and paragraph (B) are put in as a clarification. They could not possibly change the legal position of undertakings that had already been made.


[Stage Direction]
Clause agreed to.
Bill reported and read the third time and passed.
28902-5-359$
World Exhibition Corporation Act CANADIAN WORLD EXHIBITION CORPORATION ACT

Jean-Paul Deschatelets: the second reading of Bill No. C-120, to amend the Canadian World Exhibition Corporation Act.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order with respect to this bill. As I have indicated, my interest is solely in a point of order and not in the substance of the bill itself. One of the best known rules of this House of Commons is that a money bill must be preceded by a resolution. All of us who are private members of course know this, for it certainly applies to any bills that we seek to bring in. It also applies to bills brought in by the government. This, I may say, arises not just from a standing order of the House of Commons or from some citation in Beauchesne, but rather from section 54 of the British North America Act, which reads as follows:
It shall not be lawful for the House of Commons to adopt or pass any vote, resolution, address, or bill for the appropriation of any part of the public revenue, or of any tax or impost, to any purpose that has not been first recommended to that house by message of the Governor General in the session in which such vote, resolution, address, or bill is proposed.
That principle is carried forward in standing order 61 of the standing orders of the House of Commons, which says the same thing in standing order language, so that I need not repeat it. This principle is also confirmed in two or three citations in Beauchesne's-rather, I should say it is confirmed in a dozen citations, but I call attention to only two or three of them. I am looking at Beauchesne's fourth edition, citation 243, which says:
All bills providing for the payment of salaries or for any expenditure whatever out of the public funds of the dominion must be first considered as resolutions in committee of the whole.
Similarly citation 355 of Beauchesne's fourth edition says:
Bills involving expenditure of public money or taxation, and all measures involving a charge upon the people must be preceded by a resolution.
As hon. members are aware, Bill No. C-120 is one of a number of bills that first reached us on Friday. We did not know at that time what the bill would contain. I recognize that the point upon which I base my point of order might seem to be a small one, but the principle is one that I think we must recognize. The bill includes provision for increasing the number of directors of the body established by it. Though they do not receive any remuneration, they receive their expenses;
5632	HOUSE OF
World Exhibition Corporation Act but in addition to that I would point out that for the commissioner general and the deputy commissioner general there has been added money for allowances. By the previous act they were provided with salaries but not allowances, but provision is now made for the commissioner general and the deputy commissioner general to receive allowances as fixed by the governor in council. I have read through the bill itself-


John Whitney Pickersgill: Mr. Speaker, I wonder whether I could ask the hon. member a question?


Stanley Howard Knowles: Surely.


John Whitney Pickersgill: Has the hon. gentleman considered who is to pay these salaries?


Stanley Howard Knowles: I cannot say that I have read in detail on that particular point, but it has been provided in this legislation, and the act we are now amending was brought before parliament as a money bill with a preceding resolution.


John Whitney Pickersgill: That was a grant to a corporation.


Stanley Howard Knowles: But the provision for these salaries and allowances is to be made by the governor in council. It is really improper for me to go into the sections of the bill at this point, except to make the reference to the fact that it is the governor in council that fixes the amount of the salaries and allowances these people are to receive. I submit, Mr. Speaker, that if this is the case this bill, even though it is a minor point financially, should have been preceded by a resolution.


Jean-Paul Deschatelets: Mr. Speaker, I will be very brief in commenting on the different points raised by the hon. member. I think he has established very clearly that a money bill should be preceded by a resolution. There is no ambiguity there. But may I point out to the hon. member that on December 20, 1962, the act was passed and in section 11 it is provided that a grant not exceeding $20 million will be paid from time to time to the corporation of the world fair. Bill No. C-120 which is now before us makes a few minor amendments to the act. May I point out to the hon. member that any remuneration not provided for in the previous act will be paid out of the fund voted under that act. We are not looking for any additional funds; the funds have been voted and we are now asking for a few amendments to be made. I do not think that under these circumstances the jurisprudence quoted by the hon. member applies to this bill.


Stanley Howard Knowles: May I point out, Mr. Speaker, that members of the privy council both


present and former will realize that even if additional money is not asked for, the government can only spend money or assign money to those purposes for which parliament has given approval. This applies to estimates; the fact that a total sum of money has been voted does not give the government power to move that money from one item to another.
I submit that the act passed last December stated certain purposes for which this $20 million could be used. One of those purposes was the salaries of these two people. There was no suggestion in that act that any of this money could be used for the purpose which is now spelled out in the bill before us. I submit that even though not another dollar may be necessary to carry out these purposes, what we now have is a bill indicating a purpose which was not envisioned in the previous legislation. That is the nub of section 54 of the British North America Act, that there cannot be such a vote of money for any purposes that has not been first recommended to the house by message of the governor in council. I recognize that there may be no additional money involved. If there is additional money involved, it will have to be brought in in some other way later on. But a new purpose has been imported into the legislation that was not in the legislation when it was introduced last year.


Jean-Paul Deschatelets: Mr. Speaker, may I point out to the hon. member that in the act passed on November 20, 1962 there was provision for the remuneration of officers of the world fair corporation; but no amount was mentioned, this being left to the discretion of the governor in council. I think-


Stanley Howard Knowles: But there was no provision for allowances; that is something new that is being asked for. If it is not something new, why is it being asked for?


Jean-Paul Deschatelets: I only want to add a word to this, Mr. Speaker. I think that once the funds are voted by parliament we should not require a resolution if we wish to bring in amendments to an act. I believe the points of order raised by my hon. friend have no application in this situation.


Horace Andrew (Bud) Olson: Mr. Speaker, perhaps it may be useful if I refer to a reference in Beau-chesne's third edition at page 479 which certainly supports the point of order raised by the hon. member for Winnipeg North Centre (Mr. Knowles) and says:
Another element which places this measure in the category of money bills is that its adoption would mean the transfer of the authority under which appropriated money is to be spent.

Further it says:
When money is voted, the main conditions imposed on its expenditure are embodied in resolutions. All the circumstances concerning its destination lorm part ot the appropriation with which they are considered and if any alteration is to be made it must be by the same process as the original resolution.
Then it says that the circumstances under which an expenditure is to be made are indivisible from that expenditure.


Charles Benjamin Howard: Mr. Speaker, I wonder if at the time you are considering this question you would take this point into account. I raise it specifically because of the contention of the Minister of Public Works (Mr. Deschatelets) to the effect that once an allocation of money is made and set out in the statute, you do not need any further resolution amending or changing the manner in which that money will be spent. I do not have the specific reference, but during the session of 1962-63 when Mr. Speaker Lambert was in the chair I had introduced a bill seeking to amend the Trans-Canada Highway Act to say that moneys expended under that act could be used for the purposes of highways other than the specifically designated trans-Canada highway. The amount of money was provided by a previous amendment to the statute. I in no way sought to have the amending bill changed, or alter that amount of money; merely that it could be expended with the approval of the governor in council for another purpose, another type of highway, in the same way as this bill now before us seeks to say that the amount of money provided by a previous statute can be expended in another way, namely for allowances.
Mr. Speaker Lambert ruled the bill I had introduced to be out of order on precisely the same grounds as the hon. member for Winnipeg North Centre is saying that this bill is out of order. I appealed Mr. Speaker Lambert's decision. We had a division. The Minister of Public Works (Mr. Deschatelets) was then a private member and he and every one of his Liberal colleagues then in the house voted to support the ruling of Mr. Speaker Lambert, though they are now singing a different tune.


John Whitney Pickersgill: Perhaps I may say a word on this. It does not seem to me that the hon. member has drawn a true analogy, because what he was seeking to do on that occasion- and I remember it very well-was to change the purpose for which money could be expended out of the treasury. In this case parliament made a grant of $20 million to a corporation. The grant has been made. There is no suggestion that anything be added to it and there is mo suggestion that the money be used for any other purpose apart from the
World Exhibition Corporation Act world exhibition. All this bill seeks to do is to restrict the manner in which the corporation spend this grant; the governor in council is now asking parliament to restrict the corporation a little further in what it can do with the money.


Gordon Harvey Aiken: We seem to be spending a lot of time discussing a point of order-a point of order which certainly seems to have some basis-and I wonder whether the minister would not consider withdrawing his motion, starting again and putting a resolution on the order paper.


John Whitney Pickersgill: I think we had better hear from the Chair, first.


Gordon Harvey Aiken: I am trying to avoid, if possible, a ruling from the Chair and the chance of a division.


John Whitney Pickersgill: We will accept the ruling
of the Chair.


Stanley Howard Knowles: Would the Secretary of State explain his use of language when he says that what is being asked is a restriction on the powers of the corporation or of the governor in council? Let me stick to this one point. The legislation as enacted last December says, in section 5(1) that the commissioner general and the deputy commissioner general "shall each be paid by the corporation such salaries as are fixed by the governor in council." The proposal is to amend that, so as to make it read "such salaries and allowances as are fixed by the governor in council". It seems to me that this is not restrictive. It seems to me that this is enlarging the way in which this money can be spent.
I could take up other aspects of the bill, for example, the enlarging of the area where the fair could be held. The geographical limits set out in the original act were much more restricted than those proposed in this bill. As I say, I find it hard to understand the language used by the Secretary of State (Mr. Pickersgill). If the bill, were, in fact, restricting the objects on which the money could be spent I would have no point of order, but it is precisely because the bill has brought in at least one new purpose which was not there before, that I think section 54 of the British North America Act comes into play.
In one of the citations which I read-I think it was citation 243-it says further down in the paragraph that if a bill such as the present bill gets into committee and the approval of the governor general has not been given in advance, it can be given at that time. I am not holding out for the suggestion made by the hon. member for Parry Sound-Muskoka (Mr. Aiken) that we should start over again, by having a resolution, if

Business of the House this could be dealt with in another way; but having in mind the express provision of the British North America Act in this regard it seems to me we should be careful. I can see someone coming along later and saying these allowances were paid illegally and we would have another field day for the lawyers.


George Clyde Nowlan: Let us hear from Mr. Speaker.


Mr. Deputy Speaker:: I wonder if it would not be more conducive to good order and progress in the house if we were to let this matter stand and go on with the next item of business. There would, as I understand it, be no delay if the government decided to introduce a resolution to precede the bill; it would not kill the bill in any way. I am not suggesting that if a ruling were made by the Chair it would necessarily be in favour of the point of order advanced by the hon. member for Winnipeg North Centre (Mr. Knowles), but since time is advancing this evening it is the opinion of the Chair that the matter might be allowed to stand until tomorrow and the next order of business called.


John Whitney Pickersgill: I was just rising to make the same suggestion to Your Honour. It was obviously a very debatable point we were discussing-a matter which only the Chair can decide. I may say at once the government is only too happy to abide by whatever decision the Chair may make in this matter but I think it would be helpful if we could, as you suggest, have this matter adjourned until the Speaker has had an opportunity to reflect upon it, and proceed to the next item of business.
Perhaps, while I am on my feet, you would permit me to inquire whether it might be the wish of the house to let us go on for half an hour so that we could hear the hon. lady give her exposition of the important measure which is the next order of business.


George Clyde Nowlan: It is snowing outside now. We do not want any more of it.
On motion of Mr. Pickersgill the debate was adjourned.



PENSIONS


[Stage Direction]
On the order:
Second reading of Bill C-125, an act to amend the Old Age Assistance Act, the Disabled Persons Act and the Blind Persons Act.
Charles Benjamin Howard: Before the hon. lady makes her comments with respect to this bill I think

we would do well to reflect on the suggestion made by the Secretary of State that we should sit half an hour beyond the normal sitting time in order that the hon. lady, or another minister, might make remarks of an introductory nature. Perhaps before we reflect on that suggestion we might consider it to be ten o'clock. This would give the hon. lady a fresh start tomorrow.


John Whitney Pickersgill: Well, I suppose one bows to the inevitable.


Mr. Churchill:: Has anyone called it ten o'clock?
We are prepared to go on for half an hour.


Charles Benjamin Howard: I thought I had made it clear earlier that it should be ten o'clock.


Lionel Chevrier: It is not ten o'clock yet.


An hon. Member:: Thirty seconds to go.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: If it is now ten o'clock, may I ask what is to be the business for tomorrow and Wednesday?


John Whitney Pickersgill: I think, in line with the suggestion made by Your Honour, it would be preferable to go ahead now with the bill on the pensions and then, perhaps, after that Your Honour could give a decision on the point which was raised and we would go ahead with the bill on the world's fair.
Then we would proceed to deal with the other two bills which were indicated by my colleague the Solicitor General, the measure concerning the auditors of the C.N.R. and the Currency, Mint and Exchange Fund Act. If these were to be completed I am sure, by consultation, we could get something more done tomorrow.
I am very grateful for the excellent cooperation there has been today and if we can get at least those four measures done tomorrow I think we can be much more hopeful about the conclusion of the session.


Gordon Minto Churchill: What are the prospects for Wednesday-legislation or estimates?


John Whitney Pickersgill: I think we should take estimates on Wednesday, and I hope to confer with hon. gentlemen opposite about which estimates will be taken. I would hope that on Wednesday the house would agree to sit either in the evening or, if that does not seem possible, at least until seven o'clock so as to make some progress with whatever estimates are before us.


[Stage Direction]
It being one minute after ten o'clock the house adjourned, without question put.
[Stage Direction]
Tuesday, December 10, 1963