1963-12-02

Mr. Speaker:: This past week end, like the one before it, has been highlighted by tragedy. Just seven days after the untimely death of the President of the United States, Canadians were faced with another shock in the air disaster near Montreal that happened with such suddenness and took 118 lives. This crash, the worst in Canada's aviation history, has brought grief to many Canadian homes and has made its tragic impact on the entire nation.
I am sure that hon. members on all sides of the house would want me on their behalf to record their grief and sympathy for the families of those who lost their lives in this disaster.

I am sure that hon. members would not object to my expressing sympathy on their behalf to the bereaved families of those who lost their lives in this tragedy.



STATEMENT BY MINISTER RESPECTING CRASH

Hon. G. J. Mcllrailh (Minister of Transport):: Mr. Speaker, I wish to make a statement regarding the catastrophic accident which occurred at St. Therese, Quebec, on November 29, 1963, involving a Trans-Canada Air Lines DC-8F jetliner operating as flight 831 which departed Montreal at 28 minutes past six o'clock and crashed approximately six minutes later with the loss of 118 lives and complete destruction of the aircraft.
To date the major hub of activity of the investigation which was instituted immediately has been at the crash scene. In addition, immediate steps were taken to secure the area in order that the technical investigation would not be hampered, and in this connection my officials have informed me that the Quebec attorney general's department, the Quebec provincial police and civil defence authorities have rendered invaluable assistance and co-operation. The assistance and co-operation of all organizations in the area has been most outstanding.
28902-5-3394
Investigation of this accident is under the direction of the most senior accident investigator of my department, and temporary headquarters have been established at the Montreal international airport. Because of the very nature of the accident it has been necessary to establish a comprehensive accident investigation organization unique in the history of this country. Experts from every available source have been called in to assist my department in this investigation.
The scope and complexity of the investigation is such that it was necessary immediately to set up six groups of specialists from various fields of aeronautical activity, which include structures group, aircraft systems group, human factors group, operations group, power plant group and historical records and documents group. Personnel to head or work in these groups have been recruited not only from the department and from Trans-Canada Air Lines but also from the national research council, from the security and criminal investigation branches of the Royal Canadian Mounted Police, from the Royal Canadian Air Force, explosive experts from the Canadian army and an expert adviser from the Canadian air line pilots association. In addition the United States federal aviation agency and civil aeronautics board have offered assistance, as well as the manufacturers of the aircraft and engines.
Any aircraft accident investigation of this complexity may be expected to be laborious and time consuming because every possible avenue must be explored fully. For this reason it is extremely doubtful whether I will be in a position to give the house any firm indication of the cause of the accident for some time to come.
The investigation to date indicates that the departure from Montreal was normal in every respect and radio communications between the airport and the aircraft were routine, with no indication whatsoever of the flight crew experiencing any abnormalities. Department of Transport radar operators tracked the aircraft from take-off to a point north of the city, when it disappeared from the radar scope. Communications during this period confirm that the aircraft was following its air traffic control clearance and had passed through 3,000 feet on a climb in accordance with its flight plan.
Beyond this, I am afraid I must advise the house that I am unable to provide any further information at this time.
5312	HOUSE OF
Trans-Canada Air Lines Plane Crash


Hon. Leon Balcer (Three Rivers):: On
behalf of the opposition I wish to thank the minister for having given us an interim report on this tragic accident, and in the name of the opposition I would like to join with the hon. gentleman in offering to the families concerned, the management and the personnel of Trans-Canada Air Lines, our condolences.


Mr. T. C. Douglas (Burnaby-Coquitlam):: Members of this party would like to join in the expression of condolence which has been made by Your Honour and by the hon. member for Three Rivers. We share the deep sense of grief caused by a tragedy which came so unexpectedly to so many homes in Canada. To the families of the passengers and of the crew of the airliner which was destroyed the other evening we extend our deepest sympathy.
I am glad to learn the minister has ordered such an extensive inquiry. I think it would do much to relieve the minds of the people of Canada to have a report at the earliest possible date particularly as to whether there is any defect in the aircraft itself, whether there was any disregard of the air regulations set forth by the air transport board, and so on. These are factors which the public will want to know at the earliest opportunity, and I am sure the minister will press the investigation as speedily as possible.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, on behalf of the Social Credit group in the house I should also like to express our deepest sympathy to the members of all the families who have been struck by the unexpected and heartrending catastrophe and tragedy that took place over the week end. I think this disaster has perhaps hit us harder than it otherwise might have because of the tremendous safety record that our two national air lines have been able to establish through the years.
Whenever travel is involved on the scale that exists in Canada, whether it is in the air, via railroad or by any other public carrier, there is always the danger of accidents claiming the lives of people. Certainly this also applies to the highways, where we are not so impressed by tragedy as we are in this case even though over the year highway accidents take many times the number of lives. We do have something for which we are grateful, however, and that is the safety record which our public carriers have established. This does not detract from the sorrow and grief that the whole nation feels at this time because of this particular tragedy.


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, the members of our party join with the other members of the house to convey our deep sympathy to the members of families bereaved when a DC-8F aircraft of T.C.A. crashed on Friday evening.



On the orders of the day:


Hon. D. S. Harkness (Calgary North):: wonder if the Minister of Transport could inform us whether this crashed plane was carrying a flight recorder, and if there are any regulations concerning the installation of that type of equipment in this large transport plane.


George James McIlraith: I	should	like	to	check the	answer, but Ibelieve it	was	not	carrying a	flight recorder.I	should	like	to	check the	question fully
and give an answer tomorrow.


Mr. John N. Turner (St. Lawrence-St. George):: I wonder whether, in view of the difficulty of investigating this crash, the minister is contemplating imposing a regulation under which a flight recorder will be made a compulsory piece of equipment.


George James McIlraith: I will take the hon. member's suggestion under consideration.



PRIVILEGE


Mr. Jack McIntosh (Swift Current-Maple Creek):: I rise on a question of privilege, Mr. Speaker, arising out of a statement in this house by the Minister of Agriculture. I am sorry that he is not in his seat today.


An hon. Member:: As usual.


John (Jack) McIntosh: As a basis for my question of privilege I should like to repeat a question I asked the minister in the house on November 26. It reads as follows:
Mr. Speaker, I should like to direct my question to the Minister of Agriculture, but in his absence I will direct it to the Acting Prime Minister. It arises out of a statement the Minister of Agriculture apparently made to a Liberal audience in Red Deer, Alberta, as reported in the Edmonton Journal of Monday, November 25, in which he said in part "Patronage, what is that? I select people according to merit." If it is government policy that personnel are selected on merit why was it, in view of this statement by the minister, that Mr. George Walker, the former P.F.A.A. supervisor for Swift Current, was discharged from the government service? Either this statement is false or the minister does not practice what he preaches.

On November 28 the minister was in his seat. My remarks at that time are reported on page 4188 of Hansard and read as follows:
Mr. Speaker, I think we are all pleased to see the Minister of Agriculture back in the house, and that he has made such a rapid recovery from his recent illness. I see he has Hansard in his hand, and I presume he has an answer to the question I directed to him in his absence the other day.


Hon. Harry W. Hays (Minister of Agriculture):: Mr. Speaker, the hon. member for Swift Current-Maple Creek asked the Acting Prime Minister this question on Tuesday last, and the Acting Prime Minister was pleased to turn it over to me this morning. I am glad to reply to the question, which reads in part as follows:
I will not repeat my previous question. Then the minister went on to say:
Mr. George Walker was discharged on the recommendation of the director because he did not perform his duties satisfactorily. The director was appointed by the previous administration and is a good man.
Then I asked a supplementary question as follows:
I have another question for the Minister of Agriculture arising out of the answer he gave to my earlier question. I understand that in his files he will find the report made by the present director in regard to the supervisor to whom I just referred, to the effect that he was the most capable supervisor in that branch.


Mr. Speaker:: Order. What is your question?


John (Jack) McIntosh: If he does find this report, will he consider firing the director and reinstating the supervisor?


Mr.   Hayes@: I should like to answer the hon. member's question. Apparently he does not understand that the problem arose out of the fact Mr. Walker was taking orders from the hon. member for Swift Current-Maple Creek instead of the director. This was one of the problems, and was not satisfactorily fulfilling his job.
It is on that last statement my question of privilege is based. In fact I believe there are two people involved in this question of privilege, and the first is the supervisor who was wrongfully discharged and is unable to come into this house to protect himself. I suggest to hon. members in this house, particularly the backbenchers, that they should make an effort to protect civil servants from these bureaucratic senior officials, which is apparently what happened in this case.
In so far as I am concerned, I deny that I gave orders of any kind to Mr. Walker at any time. I ask that the minister either withdraw that statement-and if he does withdraw the statement there is no basis for the dismissal of the supervisor-or I will waive the privilege and challenge him or the government to produce the facts on which they base the statement that I at any time gave orders to this supervisor.

On the orders of the day:


John (Jack) McIntosh: Mr. Speaker, since the rules prevent
Question of Privilege
me from directing a question to you, may I direct it to the Prime Minister. Since no action can be taken on the question of privilege I raised until the Minister of Agriculture is in this house, will the Prime Minister advise the house when the minister will make his next appearance? My second question is, will the Prime Minister give consideration to reinstating Mr. Walker because he was dismissed on false evidence?


Right Hon. L. B. Pearson (Prime Minister):: I am informed that the Minister of Agriculture, who is on official business today, will be in the house during the day and no doubt will be anxious to take under advisement the statement made by the hon. member this afternoon.



MR. DIEFENBAKER    NEWSPAPER REPORT OF STATEMENT RESPECTING PRIME MINISTER

Right Hon. J. G. Diefenbaker (Leader of the Opposition):: I have a question of privilege, Mr. Speaker, arising out of a report by the Canadian Press, a Winnipeg dispatch, and also a reproduction of a portion of that statement by Le Devoir. I read what the statement said:
Mr. Diefenbaker, here for a Conservative Grey Cup party, said that Prime Minister Lester Pearson has acceded to every demand made by Quebec and that whenever Mr. Pearson receives a request from Mr. Lesage, the federal government seems to bow to Quebec's wishes.
Later on I am quoted as saying:
"And it's true that the Prime Minister has diplomatically capitulated every time Quebec has asked him to do something".
Then further on, also in quotation marks:
"But generally speaking, it seems the government gives in to Quebec on many matters".
Then in Le Devoir there is this statement:
-he noted the federal government seems to give in rapidly to the desires of Quebec.
I want to say, Mr. Speaker, that those words purporting to have been said by me were not said by me. At no time throughout my entire interview did I refer to Quebec. That is not the only portion of the alleged interview which is incorrect. There is also something with reference to the agriculture minister. The report states that I said:
"He is never on the Liberal bench in the House of Commons".
I have a manuscript which sets out what I said, a record of the interview which I gave, and it entirely bears out what I have already said. However, so there is no mistake about the Minister of Agriculture, what I said was this:
The Liberal team has failed and it is generally agreed there will be a number of unconditional

Question of Privilege
releases at the end of this season. The Minister of Agriculture is away most of the time scouting for replacements.
It is unfair to the Minister of Agriculture to suggest that he is never on his bench. In so far as the other statement is concerned, I cannot understand how a statement like that could have been reported in quotation marks. I say unequivocally and without fear of any contradiction that under no circumstances did I mention Quebec.


Mr. Chevrier:: Well, you certainly left that impression with the house last Wednesday.


John George Diefenbaker: I did not catch the
observation of the hon. gentleman.


Lionel Chevrier: I said to the right hon. gentleman that he certainly left that impression with the house from the question he put to me on Wednesday of last week.


John George Diefenbaker: The impression made on the Minister of Justice was not a result of anything I said, and I have made that unequivocally clear so that this kind of political action which is in mind by those who propagate that type of thing is answered now once and for all.



MR. NASSERDEN-ABSENCE FROM HOUSE OF MINISTER OF AGRICULTURE

Mr. E. Nasserden (Roslhern):: Mr. Speaker, I rise on a question of privilege arising out of an answer given in the house on November 27 by the Acting Prime Minister (Mr. Chevrier), who at that time indicated that the Minister of Agriculture was absent because of illness. Last Friday, in answering a question in the house, the Minister of Agriculture indicated that he was in Regina that day to address a Saskatchewan Liberal association meeting. I wonder if the Prime Minister would set up a committee, headed by the Minister of National Health and Welfare, to look into this matter and establish the truth.


Edward Nasserden: Surely the Minister of Justice will answer my question?


Mr. Speaker:: Order, please.



RAILWAYS. AIR LINES AND SHIPPING CONCURRENCE IN FIRST REPORT OF SESSIONAL COMMITTEE

[Stage Direction]
Mr. J. T. Richard (Oitawa East) presented the first report of the sessional committee on railways, air lines and shipping, and moved that the report be concurred in.
Motion agreed to.
;

Lester Bowles Pearson: Mr. Speaker, I should like to table in English and in French the communique of the federal-provincial conference which met in Ottawa from November 26 to 29.



INDUSTRY


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I wish to inform the house that the government has approved the acceptance of the proposal submitted by Deuterium of Canada Limited to construct and operate a plant to produce heavy water in Canada. In its proposal, submitted to Atomic Energy of Canada Limited prior to May 31, 1963, the closing date for receipt of proposals, Deuterium of Canada Limited made an unconditional offer to produce heavy water in Canada for sale at a price which is considerably lower than that of other bidders who fulfilled the conditions established by the government. The proposal by Deuterium contained a commitment that the company would have a substantial degree of Canadian equity participation. Also the company agreed to utilize the maximum possible quantities of Canadian materials and equipment in the construction of the proposed plant.
Deuterium of Canada plan to construct their plant in Cape Breton. The plant will provide an assured market for Nova Scotia coal in Nova Scotia.
The production of heavy water is a further important step in Canada's program of developing nuclear sources of energy. The facilities of the new plant will be available to supply the requirements of heavy water in Canadian-designed reactor stations in Canada and abroad. Under the new arrangement, Deuterium of Canada will produce not less than 200 tons of heavy water per year for the first five years of production. The sale of this quantity of heavy water will be underwritten by the government of Canada. In view, however, of the keen interest at home and abroad in the Canadian reactor program the prospects for the sale of heavy water appear most promising.


Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, I am sure we all listened with great interest to the statement by the minister. I listened with particular interest, and I would think all members of the house are more than pleased that the government has taken this action. I can only say

we have had a little while to wait, but it certainly has been worth waiting for this announcement.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I am glad the government has finally made an announcement regarding the location of the proposed heavy water plant. I hope that at some future date, probably during discussion of his estimates, the minister will give us some further information as to whether this was the company that was recommended by Atomic Energy of Canada Limited and its technical advisers. Until we have that kind of information we cannot know whether this was the right decision, but if it was the site recommended by the technical people involved in this field, then of course we are satisfied.


Robert Norman Thompson: Mr. Speaker, this is not a time for debate, but I think a remark is in order in relation to the announcement just made by the Minister of Industry. I am particularly pleased that the announcement has finally been made. It is almost five months to the day since tenders were supposed to have closed, and I trust that the time it took to make the decision is that much more evidence that the decision is the right one. I am particularly concerned to know whether the decision which has been made is the one that is based on the economic factors involved, because it is the tax dollars of the Canadian people which will be spent on this project. I trust further information will be made available so the Canadian people may understand that this was the basis of the decision which has just been announced. [Later;]
On the orders of the day:


Mr. H. Russell MacEwan (Piclou):: May I
direct a question to the Minister of Industry arising out of the statement he made this afternoon with regard to the heavy water plant. Has he been advised that under this proposal the government of Nova Scotia has undertaken financial commitments with regard this heavy water plant, I understand in the vicinity of $25 to $30 million?


Charles Mills (Bud) Drury: Mr. Speaker, I am sorry but I did not quite get that question. Would the hon. member repeat it?


Howard Russell MacEwan: I ask the minister whether, in the company proposal which has been accepted concerning the heavy water plant, it is correct that the province of Nova Scotia has undertaken financial commitments to the extent of approximately $25 to $30 million.


Charles Mills (Bud) Drury: Mr. Speaker, the government of Nova Scotia directly has undertaken no commitments with respect to financial assistance.
Inquiries of the Ministry The approved contractor has made arrangements with crown corporations in the province of Nova Scotia in respect of both location and the provision of energy.


Howard Russell MacEwan: Is that Industrial Estates
Limited?


Charles Mills (Bud) Drury: Yes, Mr. Speaker.


Douglas Scott Harkness: May
I ask a supplementary question of the Minister of Industry. Could the minister inform us how much subsidy the dominion government will be paying per ton of coal which it is proposed will be used for this new heavy water plant?


Charles Mills (Bud) Drury: The precise subsidy is not fixed. It will vary from year to year; indeed, it will vary from each period of review. But the equalization subsidy payable in relation to the production of power in the particular source of power concerned will be in the order of 91 cents per ton.


Mr. G. L. Chaiterlon (Esquimall-Saanich):: Mr. Speaker, could the minister say whether the government of British Columbia or any crown corporation of the B.C. government made an offer similar to that made by Nova Scotia?


Charles Mills (Bud) Drury: Not to the best of my knowledge.


Thomas Clement (Tommy) Douglas: A supplementary question. Could I ask the minister what subsidy the government of Nova Scotia has promised with reference to coal being used in the production of energy for this project?


Charles Mills (Bud) Drury: I have just said, I think, that the government of Nova Scotia is, to the best of my knowledge, providing no subsidy.


Douglas Scott Harkness: A supplementary question to the Minister of Industry. Could he tell the house approximately how many tons of coal are required to produce one ton of heavy water? In other words, what will be the coal subsidy required to produce one ton of heavy water?


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



SHIPPING


[Stage Direction]
On the orders of the day:
George James McIlraith: Mr. Speaker, I beg to table the decision of the commissioner appointed under the Canada Shipping Act to investigate the collision between the vessel Tritonic a and the vessel Roonagh Head on July 20 last.

Inquiries of the Ministry
NATIONAL ANTHEM	[Translation]
legislative provision for adoption of Mr. Gregoire: Mr. Speaker, I rise on a point "o Canada"	of order-


Mr. S. Perry Ryan (Spadina) moved: the first reading of Bill No. C-115, to provide for a Canadian national anthem.


Some hon. Members:: Explain.


Sylvester Perry Ryan: Mr. Speaker, the purpose of this bill is to constitute "O Canada" the national anthem of Canada. It provides that the music shall be as originally composed and written by Calixa Lavallee and as subsequently arranged by Hon. R. Stanley Weir. It provides further that the words in French shall be the first verse and refrain of the Routhier version, and the words in English shall be the first verse and refrain of the Weir version.
Power is given to the governor general in council to add verses in either French or English for use on special occasions. I know all would prefer to see words of the same meaning in both languages, and when these are composed to the satisfaction of all, an amendment could then be made.
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the said bill be read a second time? Next sitting of the house?


Some hon. Members:: Now.


Gilles Grégoire: Mr. Speaker, before you ask the house when this bill will receive second reading, may I point out that, in our opinion this bill is very important, and as many bills appear on the order paper for consideration during the hourly periods devoted to private member's business, I request the unanimous consent of the house so that this bill may be given priority at the next period devoted to consideration of private members' bills.


Mr. Speaker:: I regret that unanimous consent must be asked by the mover of the bill, and not by the hon. member.


Sylvester Perry Ryan: I would ask for such unanimous consent, Mr. Speaker.


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


Some hon. Members:: No.


Some hon. Members:: Yea.


Mr. Speaker:: Questions.


Mr. Pigeon:: Mr. Speaker, on the Liberal side we heard "No".


Mr. Speaker:: Order, please. Questions.
[Mr. Mcllraith.l


Mr. Speaker:: There is no point of order, and I regret to inform the hon. member we are now at the heading of questions.


Gilles Grégoire: I rise on a point of order, Mr. Speaker-


Mr. Speaker:: What is your point of order? [Translation]


Gilles Grégoire: Mr. Speaker, I rise on a point of order. From this corner of the house we cannot hear everything which is being said, and personally, I have not heard any "no".
I would ask the house to be quiet so that we may know whether the hon. member got the unanimous consent which he requested or whether there were some members who said no. We did not hear any.


Mr. Speaker:: I believe it is for the Chair to decide whether unanimous consent was given. In my opinion unanimous consent was not given. Consequently I moved on to the heading of questions. We are now at questions.



QUESTIONS

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

Mr. Howard: Since January 1, 1957, has any communication or letter been directed or sent to any Indian or Indian band or bands in British Columbia with respect to the so-called B.C. special vote of $100,000 for Indians in British Columbia suggesting or asking ways or means of dealing with the said B.C. special vote and, if so, what are the contents of any such communication or letter?


Mr. Munro:: Yes. The minutes of the fourth meeting of the Indian advisory committee, B.C. special vote, held in January, 1962, contained a number of recommendations concerning the size of the committee, replacement of members and the administration of the vote. In accordance with established practice, copies of the minutes were distributed to each Indian band council and Indian superintendents were requested to obtain the opinion of the band councils on the various recommendations of the advisory committee. In most agencies the superintendent obtained the views of the band councils at council meetings. In others, a circular letter was sent to the chiefs requesting their views on the size of the committee and the replacing of one member each year. Band

officers were also informed that the superintendents would be pleased to discuss any questions relating to the administration of the vote.


GERALD M. TAYLOR, PARRY SOUND, ONT.
Mr. Aiken: Is Mr. Gerald M. Taylor of Parry Sound, Ontario, employed by the Post Office Department and, if not (a) does he have any authority to act for or on behalf of the department (b) has he made recommendations to the Postmaster General on postal matters?


Mr. Denis:: Gerald M. Taylor of Parry Sound, Ontario, is not employed by the Post Office Department, (a) No. (b) Yes.


APPOINTMENT TO OSHAWA HARBOUR COMMISSION
Mr. Starr: 1.	Does the Minister of Transport intend to reappoint Mr. S. Jackson of the city of Oshawa as a member of the Oshawa harbour commission, in view of his excellent service to that commission as its chairman for the past three years and, if not, for what reason?
2.	Has anyone else been appointed to fill the vacancy?
3.	If someone else has been appointed, what is the number and date of the order in council authorizing such appointment?
4.	If no appointment has yet been made (a) is it under consideration (b) when is it anticipated that it will be made (c) what are the names of any persons being considered (d) on whose recommendations to the government were such names submitted and (e) when were the names submitted?


George James McIlraith: 1. No. Mr. Jackson's term of office has expired.
2.	Yes.
3.	Order in council P.C. 1963-1570 dated October 24, 1963.
4.	Not applicable.


TENDERS FOR MAIL SERVICE, ADVOCATE HARBOUR-PARRSBORO, N.S.
[Stage Direction]
Question No. 1,607
Mr. Coates:: 1.	Who was the successful tenderer for the mail stage service between Advocate Harbour and Parrs-boro, N.S.?
2.	How many tenders were received, what were the names of the individuals tendering, and what were the amounts of the bids submitted?


Azellus Denis: 1. Mr. Ronald Edwin Lent of Advocate Harbour submitted the lowest tender. Following regular inquiry, if he is found to be personally suitable and is able to meet the other requirements of the service, the contract would be awarded to him in strict conformity with the terms of the Post Office Act.
2.	Ronald Edwin Lent, Advocate Harbour, $2,490; Clarence W. Copp, Box 337, Parrs-boro, $2,900; Purdy F. Davis, Advocate Harbour, $3,050; Girvan M. Field, Advocate Harbour, $3,120; Vernon I. Lunn, Advocate
Questions
Harbour, $3,300; Foster E. Morris, Advocate Harbour, $3,400; James H. Dunbar, Spencer's Island, $4,300.


BAR LIGHTS, PICTOU LANDING, N.S.    DISCHARGE OF CARETAKER
Mr. MacEwan: 1.	Has Gordon Chisholm been replaced as caretaker of the Pictou bar lights at Pictou Landing, N.S., and, if so, why was he discharged, and who made the complaint, or complaints against him?
2.	In what form were the complaints made?
3.	Under what legal authority was this discharge effected?


George James McIlraith: 1. and 2. Yes, because of active political partisanship. When Mr. Chisholm was confronted with charges of active political partisanship he did not deny them.
3.	As the compensation for his services was only $200 per annum, he was released under departmental authority.


AMALGAMATION OF POST OFFICES, N.B.
Mr. MacRae: 1.	On what date was a decision taken by the Postmaster General to investigate the advisability of amalgamating the post offices at Durham Centre and Jacquet River, Restigouche county, New Brunswick?
2.	Was a letter sent to Mr. Douglas B. Pettigrew, Jacquet River, offering him the position of postmaster and, if so (a) on what date was the letter sent (b) on what date was it delivered?
3.	If the letter was not delivered, has the Postmaster General instituted any investigation as to the causes of such non-delivery?


Azellus Denis: 1. August 30, 1963.
2.	Yes, by the Moncton sub district office of the civil service commission, (a) August 16, 1963. (b) Mr. Pettigrew claims that he did not receive the letter.
3.	See 2 (b) above. An investigation is being made.


WINTER MAINTENANCE COSTS, LAC MEGANTIC AIRPORT, QUE.
Mr. Laiulippe: 1.	Has the Department of Transport received any request from the town of Lac Megantic concerning sharing winter maintenance costs of the town's municipal airport and, if so, what decision was taken and what will be the share of the federal government?
2.	If no representations have yet been received, will the government give consideration to sharing such maintenance costs?


Mr. Canlin:: 1. Yes, in a letter dated April 16, 1962.
2.	The Department of Transport is not authorized to provide financial assistance for operation of municipal airports such as Megantic, as they serve primarily air traffic of a local nature.
Questions


APPLICATIONS FOR MARKET GARDENING ASSISTANCE, COMPTON-FRONTENAC CONSTITUENCY
Mr. Lalulippe: Did the federal government receive any applications of any kind for assistance to market gardening in the constituency of Compton-Frontenac during the past five years and, if so (a) from whom, and (b) from what source in the estimates were the amounts allocated (c) if no money was spent by the federal government, under which program could assistance be given?


Harry William Hays: (a) The Farm Credit Corporation reports that applications for loans are not recorded by type of enterprise; it is, therefore, impossible to determine whether any applications for loans for market gardening purposes were received during the past five years.
No formal applications for assistance to market gardening enterprises were received by the Department of Agriculture, although there have been a number of requests by individual farmers for technical information relating to market garden crops, and this has been given by officials of the experimental farm, Lennoxville, and the research laboratory, St. Jean, (b) No specific funds have been allocated for assistance to market gardening enterprises, but in connection with the supply of technical information funds are available within vote 25, research branch, Department of Agriculture, (c) Mortgage credit is available from the Farm Credit Corporation for market gardening enterprises.


WABUSH, NFLD., AIRPORT
Mr. Fisher: 1.	Is there an airport at Wabush, Newfoundland?
2.	Have the Departments of Transport or Public Works any responsibility for this airport?
3.	Is it paved or asphalted and, if so, to what extent?
4.	Are there any plans to pave runways and, if so, what are they, in detail, regarding time and cost?


George James McIlraith: 1. Yes.
2.	Not at present.
3.	No.
4.	Yes, subject to the completion of an appropriate agreement with Northern Airport Limited the owner and operator of the airport, it is intended to proceed during the fiscal year 1964-65 with the paving of the runway, taxi strip and aircraft parking area, at an estimated cost of $1000,000. It is expected that this work could be completed during the following year 1965-66.


CAPE BRETON HIGHLANDS PARK
Mr. Muir (Cape Breton: North and Victoria):
1.	Since April 8, 1963, how many employees from Victoria county have been hired and are still employed at the Cape Breton highlands national park?
[Mr. Cantln.l
2.	How many have been hired and are still employed from each of the following areas: South Ingonish, North Ingonish, Neil's Harbour-New Haven, Dingwall-Cape North and Bay St. Lawrence?
3.	How many of those hired and still employed served in the armed forces?
4.	How many employees from Victoria county have been laid off since April 8, 1963?


Mr. Laing:: 1. Forty eight.
2.	South Ingonish, 35; North Ingonish, 6; Neil's Harbour-New Haven, 5; Dingwall-Cape North, 2; Bay St. Lawrence, 0.
3.	Eleven.
4.	Forty five, including 27 seasonal employees, 2 casual employees, and 16 employed on the tracking station clearing project, now completed.


*CARAVELLE AND DC-9 PLANES'  PERCENTAGE OF CANADIAN CONSTRUCTION
Mr. Marcoux: 1.	Does the government have any information concerning the percentage of the construction and assembly of the Caravelle Super-B which could be carried out at Canadair for Trans-Canada Air Lines and, if so, what is the percentage, and the nature of materials and parts?
2.	Does the government have any information concerning the percentage of the construction and assembly of DC-9's which could be carried out in Canada for Trans-Canada Air Lines, and, if so, what is the percentage, and the nature of materials and parts?


Jean-Charles Cantin: 1. No.
2. Answered by Prime Minister's statement in the House of Commons on Friday, November 22.


DUTIES OF CHIEF ARCHAEOLOGIST
Mr. Fisher: What are the specific duties of William E. Taylor as chief archaeologist?


Arthur Laing: 1. Plan and supervise the
museum's program in archaeology, physical anthropology, paleo-chronology, and related matters carried out by staff members, and scientists on contract.
2.	Perform archaeological field work each season, usually taking an expedition to Arctic Canada.
3.	Write scientific and other reports for publication and supervise the preparation of such reports by staff and contract workers; plan the museum's publication program in the above named fields; select and edit material for publication.
4.	Participate in planning the branch's activities as requested by the director.
5.	Establish and maintain contracts, nationally and internationally, with scientific and cultural institutions, administrators, scientists, teachers and students concerned with Canadian prehistory, and northern Canada.

6.	Supervise the care of a collection of over 300,000 specimens in archaeology and physical anthropology, the cataloguing of scientific specimens and collections, site location files, radiocarbon files, files of information on Canadian prehistory and general section files.
7.	Direct a radiocarbon dating project on Canadian prehistoric materials on an international scale.
8.	Perform associated and related duties as required.


UNION AGREEMENTS, ATOMIC ENERGY PLANT
Mr. Scoii: 1.	How many collective bargaining agreements exist covering employees of the atomic energy plant at Chalk River, Ontario?
2.	What are the names of the unions connected with each of the said collective bargaining agreements?
3.	Which of the said agreements contain union security clauses to the effect that membership in a union is a condition of employment?
4.	Which of the said agreements contain provisions for a compulsory check-off on all employees within the bargaining unit?
Answer: 1. Four.
2.	(i) The following unions act through the atomic energy allied council, A.F.L.-C.I.O. and C.L.C. in concluding the collective agreement that applies to them: local 2466 of the united brotherhood of carpenters and joiners of America, local 742 of the international brotherhood of electrical workers, local 920 of the international union of operating engineers, lodge 1522 of the international association of machinists, local 560 of the united association of journeymen and apprentices of the plumbing and pipe fitting industry of the United States and Canada, local 989 of the international brotherhood of teamsters, chauffeurs, warehousemen and helpers, atomic research workers union, federal labour union 24291 of the C.L.C., local F.F.F. firefighters association of atomic energy of Canada limited, local 327 of the sheet metal workers international association, local 1788 of the brotherhood of painters, decorators and paperhangers of America, Chalk River nuclear process operators, local 1601 of the C.L.C., (ii) the Chalk River technicians and technologists local 1568 of the Canadian Labour Congress; (iii) the Chalk River atomic energy draftsmen local 1569 of the Canadian Labour Congress; (iv) local 404 office employees international union A.F.L.-C.I.O. and C.L.C.
3.	None.
\ .4. None.
Order for Return


* MOUNT REVELSTOKE PARK
Mr. Herridge: 1.	What is the estimated total yardage of material to be moved in the reconstruction of the road to the summit of Mount Revelstoke park?
2.	What is the estimated cost of this reconstruction?
3.	When is it expected this work will be completed and the road reopened?


Arthur Laing: Mr. Speaker, the Department of Public Works is undertaking this project on behalf of the Department of Northern Affairs and National Resources. They advise that the answers are as follows:
1.	While the preliminary field survey for reconstruction of the road has now been completed, the estimate of contract quantities will not be completed before February, 1964.
2.	$700,000, preliminary estimate only.
3.	September, 1965.


INCREASED REVENUE FROM SALES TAX
Mr. Coates: What was the total increase in revenue available to the federal government to October 31, 1963, as a result of the 4 per cent sales tax?


Mr. Garland:: The net amount of federal sales tax collected at the rate of 4 per cent in the period June 14, 1963 to October 31, 1963, was $18,901,050.10.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Latulippe: 1.	With reference to the erection of farm buildings under the terms of the Farm Improvement Loans Act (a) how many applications were received from persons in the constituency of Compton-Frontenac during 1962 (b) how many were rejected
(c)	how many were granted (d) what were the amounts in each case?
2.	With reference to the purchase of cattle under the terms of the same act (a) how many applications were received from persons in the constituency of Compton-Frontenac during 1962 (b) how many were rejected (c) how many were granted
(d)	what were the amounts in each case?
3.	With reference to the purchase of farm implements under the terms of the same act (a) how many applications were received from persons in the constituency of Compton-Frontenac during 1962 (b) how many were rejected (c) how many were granted (d) what were the amounts in each case?
4.	How many requests for loans for the purchase of farms were received from persons in the constituency of Compton-Frontenac during the past two years and of these (a) how many were rejected (b) how many were granted (c) what was the total amount?
5.	What are the corresponding answers for the years 1955-60?
Return tabled.
5320	HOUSE OF
Inquiries of the Ministry TRADE


FINDING OF GLASS IN SHIPMENTS TO RUSSIA
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I do not know whether I should direct this question to the Minister of Trade and Commerce, the Minister of Transport or the Minister of Justice. It has to do with the question of glass having been found in shipments of Canadian wheat to the U.S.S.R. I realize the difficulties in any investigation that might be undertaken in this connection, but I would like to know what investigation has been undertaken. Also, is there any basis in fact for the allegation of the presence of glass, and as of this moment is there anything to indicate its source, if glass was found in the shipments?


George James McIlraith: Mr. Speaker, I think I could best answer the question by making a statement giving all the facts I have up to this time. I think that would best meet the requirements at the moment.
As is generally known, the board of grain commissioners takes extensive steps to ensure and maintain the high quality and reputation of Canadian grain. There have, however, been isolated cases of foreign material, including glass and bottles, being found in export grain cargoes. Where they have occurred, it would appear that the foreign material enters the cargo after it leaves the elevator. The first such report over a long period occurred this summer on two small cargoes out of Montreal, not to the Soviet union or to a communist country.
Commercial firms are, of course, involved in the handling of grain once it has received the final certificate from the board of grain commissioners and left the elevator. On the occasion referred to this summer the national harbours board called a meeting of shipping, stevedoring and elevator companies and urged the adoption of measures to avoid any recurrences.
The chief inspector of the board of grain commissioners visited the Soviet union recently in connection with the recent large sale of wheat to that country. While there he was informed that glass and whole bottles had been found in some of the cargoes. This was confirmed on November 28 by representations from the representative in Winnipeg of V-O Exportkhlev, the U.S.S.R. grain trading organization. Following the return of the chief inspector a meeting was held on November 28-that is, the same day-of interested parties. As a preliminary step,


notices have been sent to shipping and stevedoring companies, union officials, vessel masters, gang foremen and union members to avoid the use of bottles in or near grain holds.
The quality and reliability of Canadian grain is renowned throughout the world. It is very rare that complaints are received about our shipments. I wish to assure the right hon. Leader of the Opposition and the house generally that the government is looking into this matter thoroughly and carefully and is considering what action can be taken to avoid the recurrence of these incidents.


John George Diefenbaker: A supplementary question, Mr. Speaker. First I would thank the hon. minister for his very full and comprehensive report. Is he in a position to advise the house how many cargoes to the U.S.S.R. were found to contain glass and the like?


George James McIlraith: I am sorry, Mr. Speaker, but I do not have that information. I will try to get it. I should indicate at once that a relatively small part of the shipments was involved.


Mr. W. H. Jorgenson (Provencher):: May I
ask a further supplementary question, Mr. Speaker. I wonder whether the minister, while he is investigating this matter, would find out how much of the total shipment of grain will be lost, and what will be his ultimate decision in this regard. In addition, I wonder if he would advise the house whether this grain is covered by any form of insurance and who will sustain the loss in connection with it.


George James McIlraith: Mr. Speaker, I will take that question as notice and try to get the information.


Douglas Scott Harkness: Mr. Speaker, I have a supplementary question. I wonder whether the minister could tell us who has the over-all responsibility for carrying on this investigation. Is it his department, the Department of Agriculture, or what department does this come under?


George James McIlraith: Five authorities are most immediately involved. There is the board of grain commissioners, of course, which is primarily concerned with the quality of the wheat that is exported; there is the national harbours board, which has jurisdiction over some of the harbours from which shipments are made; there is the Department of Transport, under whose jurisdiction some of the other harbours come; and there is the Department of Agriculture which is interested in this matter. Then, of course, there would be the police, if called in.


Douglas Scott Harkness: I have a further supplementary question. Is there any over-all authority

to co-ordinate the activities of these various departments and agencies in this investigation?


George James McIlraith: The authorities have been meeting together and are now co-ordinated quite well in fact. I do not know just what further authority you could grant to them. They are working as a co-ordinated group now.



PENSIONS


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker, I wish to address a question to the right hon. Prime Minister. In view of the understanding that a decision has now been reached to increase the pension to disabled and blind persons, can he tell us whether this increase will be made retroactive to October 1, which was the date upon which the increase in the old age pension was effective?


Lester Bowles Pearson: No, Mr. Speaker. The date upon which this legislation will come into effect, if parliament approves it, is under consideration.

On the orders of the day: tTranslation]


Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Following the statement made by the Prime Minister to the effect that allowances to the blind and the disabled and old-age assistance will be increased, could the minister tell the house if this plan will involve a personal income tax increase.


Hon. Walter L. Gordon (Minister of Finance):: No, Mr. Speaker.



OLD AGE ASSISTANCE, BLIND AND DISABLED PAYMENTS  REQUEST FOR ANNOUNCEMENT

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Prime Minister. How soon will the government be able to make some announcement regarding the increase in the old age assistance pension, the blind pension and the disabled persons allowance? Is that dependent on further communications with the provinces or can the government make a statement fairly soon?


Lester Bowles Pearson: Mr. Speaker, some further communications will be required with the provinces, because
Inquiries of the Ministry the ultimate result will depend on action by the provincial governments as well as the federal government. But we hope to make this announcement without any delay.


Thomas Clement (Tommy) Douglas: A supplementary question. I am sure there must have been some discussions as to an effective date. What is the effective date which is being aimed at by the federal and provincial authorities?


Lester Bowles Pearson: There were discussions about an effective date, but the provinces differed with regard to that matter. That must be ironed out before a statement can be made.
Mr. L. J. Pigeon (Jolieiie-L'Assompiion-
Monlcalm): A supplementary question. Is it the intention of the government to increase taxes, as they have in the past?


Hon. J. W. Monieiih (Perth):: May I ask a
supplementary question. Is it not possible for the government simply to bring in legislation to make it permissive for the provinces to participate?


Lester Bowles Pearson: Yes, that is possible and we have, of course, discussed that. But there are still one or two matters we should like to iron out with the provinces. There will be no avoidable delay in connection with this, I can assure the hon. gentleman.



DOMINION-PROVINCIAL CONFERENCE REPORTED CHANGES IN EQUALIZATION PAYMENTS

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: May I ask the Prime Minister if he proposes in the near future to give to the house some explanation why the government has presented an equalization formula to the provinces which is at variance with the pledge of the Liberal party to introduce an equalization formula to bring all the provinces up to the level of the wealthiest province on a per capita basis, related to income taxes and succession duties.


Lester Bowles Pearson: Well, Mr. Speaker, I hope to make a statement on the conference at the earliest possible opportunity. If the interim supply debate should continue, this would be an opportunity. If the interim supply bill goes through, then I would do it on my estimates, which should be under discussion in a few days.

On the orders of the day:


Gilles Grégoire: Mr. Speaker, my question is directed to the right hon. Prime Minister. Since he mentioned a while ago that if the interim supply debate

Inquiries of the Ministry were to go on this afternoon he would make a statement on the federal-provincial conference and since we do intend to discuss that federal-provincial conference today, would the Prime Minister be ready to make his statement on the conference at the very beginning of that debate?


Lester Bowles Pearson: We had rather hoped that interim supply could go through without too much delay. We want to get away for Christmas. If the debate is going on, as my hon. friend suggests it is going on, and that subject is going to be discussed, perhaps it would be just as well if I spoke first.



PARTICIPATION BY MINISTER IN DISCUSSION OF PENSION PLAN

[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Pori Arthur):: Mr. Speaker, I should like to ask the Prime Minister whether he could indicate what substance there is to reports that the Prime Minister took the role of spokesman for the government in discussions with the provincial premiers about the Canada pension plan because the federal minister responsible was unacceptable to some of the premiers.


Lester Bowles Pearson: Mr. Speaker, there just does not happen to be any basis in fact for that statement. I did preside over the plenary session which dealt with this matter, and I had the minister concerned sitting beside me. When we went into committee and discussed health and welfare matters, the Minister of National Health and Welfare presided over the committee.


Mr. Peters:: That means they didn't get anywhere.



TRANS-CANADA AIR LINES REQUEST FOR STATEMENT ON ACCIDENT AT LONDON, ENGLAND

[Stage Direction]
On the orders of the day:
Robert Norman Thompson: I should
like to direct a question to the Minister of Transport. Can the minister give the house any word on the findings relative to the DC-8F which crashed in London some three weeks ago?


George James McIlraith: I should point out that there was no crash of an aircraft in London. The incident to which the hon. member is referring is a case where the pilot did not take off. However, I will try to get whatever information is available and provide it to the house.


Robert Norman Thompson: May I ask a supplementary question, Mr. Speaker. I am not going to en-

gage in an argument about whether there was or was not a crash, but certainly a DC-8F was in serious trouble in London three weeks ago. Is there any intention at the present time of grounding the DC-8F, in view of the fact that this is the second one that has been involved in an accident and T.C.A. has several more of this type on order?


George James McIlraith: What I was seeking to explain was that the incident in London was not in any way related to the kind of crash where an aircraft has been in difficulties in the air. It was a matter of the pilot deciding not to take the aircraft off the ground.


Léon Balcer: I wonder if the minister could tell us if there was an inquiry into this accident.


George James McIlraith: Yes, but I should like to take the question as notice and get full information so that I can give a comprehensive answer.
On the orders of the day:


Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a supplementary question to the Minister of Transport. Since a DC-8F, built in the United States crashed at St. Therese de Blainville, is it the intention of the government to cancel the purchase of the DC-9 which is not yet operational, in favour of the Caravelle, which has been proven?


George James McIlraith: No, Mr. Speaker.



REQUEST FOR EMPLOYMENT OF BILINGUAL PERSONNEL

[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I wish to direct a question to the Minister of Transport. Would the minister add the name of his own parliamentary secretary, the hon. member for Quebec South (Mr. Cantin), to the list of those who found out by experience that T.C.A. flights between Montreal and Ottawa seldom have personnel qualified to serve bilingual passengers?


George James McIlraith: The assertion made by the hon. member in the latter part of his so-called question is altogether contrary to the facts.


Gilles Grégoire: Mr. Speaker, I rise on a question of privilege.
What I have just said is not contrary to the facts, since the parliamentary secretary

Inquiries of the Ministry
to the Minister of Transport was sitting next Hon. Paul Hellyer (Minister of National
to me, at noon, in the plane, and that he was Defence): I have not even seen the report, in a position to find out for himself.	Mr. Speaker.


Mr. Speaker:: Order, please. This is in the nature of a complaint and not a question of privilege.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to direct a question to either the Prime Minister or the Secretary of State for External Affairs which arises out of a statement made by President Johnson that the United States intends to pursue its desire for the achievement of a multinational mixed nuclear force. Have there been any representations to this effect made lately by the administration of the United States? Has there been any change in the viewpoint of the government of Canada, and would the Prime Minister or the minister say whether there is any intention on the part of Canada of participating in such a force?


Lester Bowles Pearson: Mr. Speaker, there have been no representations made by the United States to the government on this matter recently, and the position of the government remains as stated in this house, that we would not participate in this kind of collective force. Indeed, we did not take part in the recent NATO discussions about it.


John George Diefenbaker: I thank the Prime Minister for that answer. Were there any other nations within NATO that took the position of Canada, not to take any part in the discussions in NATO in that connection?


Lester Bowles Pearson: Yes, Mr. Speaker. I speak subject to correction, but I think three or four NATO members took the same position as Canada.



REPORTED STATEMENT BY MEMBER FOR HALIFAX

[Stage Direction]
On the orders of the day:
Robert Carman Coates: Mr. Speaker, I have a question for the Minister of National Defence. Was the hon. member for Halifax expounding government policy when he stated in Halifax over the week end that "Needed were single purpose ships whose sole duties were in sub. killing", or was he providing an excuse for the government's cancellation of the frigate program?



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. Paul Martineau (Poniiac-Temiscamin-gue):: Has the Prime Minister any plans for meeting with President Johnson in the near future?


Lester Bowles Pearson: This matter came up in the short discussion I had with President Johnson and we agreed that we should have a meeting as soon as it can be arranged, but no details have been worked out.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: The Prime Minister has referred to getting away by Christmas. Has any consideration yet been given by the government as to when the next session will commence? I ask that because naturally members, having been here for many months, are anxious to have some idea as to when the next session might commence so they can make their plans for a holiday.


Lester Bowles Pearson: When the next session begins will depend, of course, on when this one ends. Supplementary to that brilliant observation, I would say that all parties would want an adequate recess and that would be, I suggest, three or four weeks. It might be helpful if the representatives of the parties could get together very shortly and discuss the possibility of an ending date and a beginning date.


Thomas Clement (Tommy) Douglas: A supplementary question. Can I ask the Prime Minister whether he has changed in any way the outline of business which he set forth as the program which would have to be dealt with at this session?


Lester Bowles Pearson: Not in any material way, Mr. Speaker, but there are one or two matters which should not be too controversial which will have to be added to the list which I gave to the house some weeks ago. Perhaps after we have had the kind of discussion I have just mentioned I could make a further statement in the house.

Inquiries of the Ministry



LEGISLATION TO ESTABLISH INDIAN CLAIMS COMMISSION

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: May I ask the
Minister of Citizenship and Immigration whether he can state with more precision, now, just when either the resolution or the bill relating to the Indian claims commission will be introduced in the house?


Hon. Guy Favreau (Minisier of Citizenship and Immigration):: As I have said earlier, it will be introduced before the end of the present session.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Arnold Webster (Vancouver-Kingsway):: Mr. Speaker, I have a question for the Minister of Citizenship and Immigration. Is it true that Professor Harry Hawthorne, of the University of British Columbia, has been appointed to conduct a study across Canada into the problem of how to encourage our native Indian population to integrate more quickly into Canadian society?


Guy Favreau: Mr. Speaker, I want to thank the hon. member for having given me ample notice of his question, which I shall now answer in French.

It gives me pleasure to inform the hon. member and the house that we have undertaken a three-year research program to determine to what extent the Indians in all parts of Canada share in the social and economic life of our country.
This survey is designed to provide comprehensive data from which to draw basic principles for the setting up of the policy and general program we shall have to follow in future if we wish to promote the welfare and progress of the Indian population of Canada.
Mr. H. B. Hawthorne, of the University of British Columbia, and Mr. Adelard Tremblay, of Laval University, have undertaken, as director and assistant director, the carrying out of this extensive research project.
Specialists and research assistants attached to Canadian universities and research centres will be charged with various sections of the programs as required. The research work will apply to four important aspects of the Indian question: economic development, promotion of education, present-day responsibilities at various government levels, band councils and progress toward administrative autonomy.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Guy Favreau: Before I resume my seat- which is an unparliamentary way of saying "while I am on my feet"-may I answer a question put to me last week by the hon. member for Skeena as to whether or not the government made a commitment to one H. Castilou of British Columbia to the effect that there would be an Indian liaison committee appointed consisting of parliamentarians and advisers for the purpose of making annual visits to various Indian villages in British Columbia.
I must tell the hon. member that though the purpose might be laudable, for the moment, the answer is no.



LOTTERIES


[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a question to the Minister of Justice. Could the minister tell the house whether, following the federal-provincial conference, the Criminal Code will be amended so that provinces which so desire may set up lotteries?


Lionel Chevrier: Mr. Speaker, this is the third time since the opening of the conference that this question is asked. All I can say is that the government will take into consideration the representations which were made.


Louis-Joseph Pigeon: A supplementary question, Mr. Speaker. So, contrary to what was reported in the press, no decision has been taken?


Lionel Chevrier: Absolutely no, Mr. Speaker. [Text]



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
George Louis Chatterton: Mr. Speaker, I have a question for the Minister of Defence Production. In view of the grave concern of B.C. shipyards, which will now be aggravated by the statement made by the minister on motions, would the minister say whether the conversion of the two remaining St. Laurent class destroyer escorts will be carried out by B.C. shipyards?

Interim Supply


Charles Mills (Bud) Drury: Mr. Speaker, that matter is currently under examination.



REPORTED SALE OF U.S. BEET SUGAR IN KENT CONSTITUENCY

[Stage Direction]
On the orders of the day:
Mr. H. W. Danforth (Kent, Oni.):: I wish to direct a question to the Minister of Trade and Commerce or, in his absence, to the acting minister. In view of the fact that Pioneer Brand beet sugar refined in the United States is being offered for sale this week in the constituency of Kent, which is the centre of beet sugar production in Ontario, can the minister assure the house that his department is investigating only the question of supplies of raw sugar from abroad, not supplies of refined sugar subsidized by foreign governments in direct competition with our own producers and workers in our own refineries?


Mr. Jean-Luc Pepin (Parliamentary Secretary to Minister of Trade and Commerce):: I will take the question as notice.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to direct a question to the Minister of Veterans Affairs. Has the minister received a request from the Hong Kong veterans association urging him to use his influence to get the government to give a detailed report of the expenditures of persons who suffered in Hong Kong and other prison camps owing to action in the last war?


Hon. Roger Teillet (Minister of Veterans Affairs):: Yes, I have received such a request.


Herbert Wilfred Herridge: What is the minister doing about this request now that it has been received?


Roger-Joseph Teillet: I am taking it under consideration and making a study of it at the moment.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, my final question is directed to the Minister of Justice. Has the minister read the articles by Marcel Gingras in La Presse, with respect to the portraits of ministers, including his?



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



INTERIM SUPPLY

[Stage Direction]
Resolved, that a sum not exceeding $377,400,841.02, being the aggregate of-
(a)	one-twelfth of the total of the amounts of the items set forth in the main estimates for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, except agriculture item 100, atomic energy item 5, external affairs items 78 and 107, fisheries item 45, mines and technical surveys items 45 and 80, northern affairs and national resources items 5 and 10, public works items 20 and 190, transport item 35 and loans, investments and advances item L20 for which no amount is being released, $318,822,963.00;
(b)	an additional two-twelfths of external affairs item 105 and finance item 45, $4,700,000.00;
(c)	an additional one-twelfth of mines and technical surveys item 140, national film board item 1, northern affairs and national resources item 80, post office items 5, 10 and 15, public works items 150 and 165, transport items 40 and 220, loans, investments and advances item L70, $21,342,422.50;
(d)	one-twelfth of the total of the amounts of the items set forth in the supplementary estimates (A), for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, except external affairs items 96a and 117a, finance item 5a, northern affairs and national resources item 110a, and loans, investments and advances items L13a and L63a for which no amount is being released $24,023,455.00;
(e)	an additional one-twelfth of finance item 45a, $83,333.34;
(f)	one-twelfth of the amount of the item set forth in the supplementary estimates (B) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, $583,333.34;
(g)	one-twelfth of the amount of item set forth in the supplementary estimates (C) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, $1,666,666.67;
(h)	one-twelfth of the amounts of the items set forth in the supplementary estimates (D) for the fiscal year ending March 31, 1964, laid before the House of Commons at the present session of parliament, except external affairs item 117d for which no amount is being released, $6,178,667.17;
be granted to Her Majesty on account of the fiscal year ending March 31, 1964.
["May I call it ten o'clock. Progress reported."]
Mr. Nielsen:: When I resumed my seat on Friday I was speaking about the activities of the Post Office Department. Before continuing to do so I wonder whether I might draw the attention of the Minister of Justice, while he is in his place, to the situation which exists in the Yukon and the Northwest Territories with respect to the Judges Act.
As the minister knows, there are in the north two magistrates, one in each territory, known as police magistrates. Their jurisdiction is in practically all respects comparable with the jurisdiction of county court judges. The amendments to the Judges Act passed this session, by oversight I believe, omitted any mention of an increase in salary for the

Interim Supply
police magistrates of the Yukon and the Northwest Territories. The county court judges across the country had their salaries raised. I placed a question on the order paper, and I obtained a copy of the recent order in council appointing a magistrate, for the Yukon, and I noticed that the salaries paid in the north are still $10,000 per annum.
I recommend most strongly to the minister that he consider this matter with a view to raising the salaries of these two justice officials in the two northern territories so they might be on the same level as county court judges across the country.
Let me return now to the department of the Postmaster General and the conduct of that department, particularly in the Yukon. The minister will see, if he examines his files, that since 1958, when 1 first came to this house, I have advocated a policy of the calling of public tenders for every contract for the carriage of mail, whether by ground or by air or any other means. Mr. Pageau, who was then director of the transportation division of the department, will concur in that. I am sorry to see that the department is now departing from this fair course of action.


Azellus Denis: On a question of privilege.

Mr. Chairman, the hon. member for Yukon (Mr. Nielsen) claims that I am departing from the policy of calling tenders. I should like him to state names so that an investigation may be undertaken to prove whether he is right or wrong.


Erik Nielsen: I will be pleased to do that. As a matter of fact I was about to do that on Friday when I had to resume my seat. The particular post office where public tenders have not been called is a newly established one at Ross River. I understand that the procedure followed by the department was for certain selected companies to be asked to tender for the carriage of mail to that post office from Whitehorse. In fact only one company was invited to tender, a company in Whitehorse. The department subsequently received a further offer from a company in Teslin in the Yukon, and this was rejected for reasons which I am forced to agree, because of the size of the post office and other considerations, are acceptable. But there is more than one company in Whitehorse and in the Yukon capable of carrying mail by air to that post office.
In the past public tenders have been called and advertisements have been placed not only in newspapers but in post offices throughout the territory. To return to the

policy of selecting certain favoured individuals or companies and saying "would you like this job" is not my idea of giving a fair opportunity to every Canadian interested in supplying a public service.
I have given only one instance. I am sure if the minister would check he would find that what I have told him is accurate. Whatever the minister does in any other constituencies in Canada because of pressures brought by his own backbenchers and in his party's caucus, we in the Yukon want to be fair minded about these contracts. I think even the supporters of his own party have gone on record as saying that they want to get back to the system where everybody has an opportunity to tender on contracts for public goods and services. From a personal point of view I think the situation should be the same all across the country.
Certainly situations should not be allowed to exist such as that which existed in the riding of the hon. member for Hastings-Fron-tenac, where the postmistress at Enterprise was thrown out of work peremptorily and arbitrarily despite the fact that she was a veteran.


Azellus Denis: Mr. Chairman, I rise on a question of privilege. I deny categorically that, arbitrarily and against the law, I dismissed the postmistress the hon. member for Yukon (Mr. Nielsen) is talking about.
First of all, she was not postmistress, except temporarily until someone was appointed on a permanent basis. When five, six or eight people apply to be appointed postmaster, the Postmaster General must choose one of them. Therefore, I say to the hon. member that this procedure is far from being arbitrary and that everything was done according to the regulations of the Post Office Department.


Mr. Speaker:: Order. I think that is rather an argument and that there is no question of privilege. I ask the hon. member for Yukon to proceed.


Erik Nielsen: Certainly I am bound to accept the minister's explanation of this matter. I can only go by what I read in press reports, and the press reports are quite firm in stating that this veteran of the last war, who has five children, did not even know she was fired; and despite the fact that a petition was signed by over two thirds of the people in the village of Enterprise, the minister went ahead with the decision to dismiss this veteran. Not only that, but he did it in

a very questionable fashion, because a certain date had been set for moving the post office itself and 24 hours before this well published date the post office was moved.


Azellus Denis: Mr. Speaker, again I rise on a question of privilege. The Post Office Department is accused of having transferred that post office to a new postmaster without notice. Well, in that connection, I want to put on the record that Mrs. Stewart herself wrote us as follows:

Re transfer of Enterprise office. Would you kindly arrange to have the transfer done on Friday the -29th-
That is what we did according to the request of Mrs. Stewart.


The Chairman:: Order. I wonder whether we are not getting into an argument now. As I suggested a moment ago, this is argumentation, and perhaps the minister might have the opportunity later to reply to the representations made by the hon. member for Yukon.


Erik Nielsen: Mr. Chairman, I am just dealing with the general trend that seems to be developing in the government of returning to the very evil system of patronage which we seemed to be so singularly successful in keeping out of the activities of the government when we were in power.
I can mention other departments. In the last year the Department of Mines and Technical Surveys had $250,000 worth of helicopter contracts in the Yukon alone which were allotted by selection. No tenders were called on those contracts, whereas under the system in the past-


Mr. Pickersgill:: Autair.


Erik Nielsen: I could not care less whether they are air contracts or contracts for other kinds of goods and services. The basic principle is that every Canadian who is a taxpayer should have the opportunity to bid on such contracts. I think that is a basically fair principle to hold to. It does not make any difference whether or not they are air contracts. It seems to me this is a practice that the government could well consider getting back to.
The Haines road operation, which comes under the Minister of Northern Affairs and National Resources, also comes in for a little criticism. Here is a Canadian road that the government has very laudably decided to keep open on an experimental basis for one year. It is being maintained on an all-weather basis. Yet I rather strongly suspect that the road
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is being maintained by United States equipment and with United States labour.
To me this is an untenable state of affairs. We have unemployed workmen in the Yukon Territory who are capable of doing the work, and we have Canadian equipment there which could very well be used on this job. All I have to go on now is suspicion, but I certainly do have the suspicion that this is not being done.
I have asked the Minister of Northern Affairs and National Resources several times whether the negotiations have been completed yet between the governments of the United States and Canada in so far as the maintenance of the road is concerned. All I have had by way of answers from the minister and other cabinet ministers are evasions and concealment. As a matter of fact, when answering all these questions the cabinet ministers seem to have a noted talent for concealing the truth.


Lucien Lamoureux: Order. I regret that I must interrupt the hon. member, but his time has expired.


Some hon. Members:: Continue.


Erik Nielsen: Mr. Chairman, I will resume my seat, but as I did not want to take the time on the orders of the day I should now like to make one or two corrections in my remarks of last Friday.


Lucien Lamoureux: Is that agreed?


Some hon. Members:: No.


Some hon. Members:: Yes.


Erik Nielsen: The remarks I refer to are found on page 5272 of Hansard. At the bottom of the left hand column I am reported as having said "90 per cent of Canada's gold". That should read "90 per cent of Canada's placer gold". I said something else which I think the reporter missed. I said "The Yukon and this industry have contributed hundreds of millions of dollars to the national treasury". At the top of the right hand column on the same page it should read "territorial government" rather than "territory government", and it should be "is not" rather than "is". On page 5273 halfway down the left hand column the words "in the city" should read "at the air field".


Lionel Chevrier: Mr. Chairman, I did not want to interrupt the hon. gentleman a moment ago when he referred to the increase in salaries of the county court judges and compared them with those of the magistrates in the Northwest Territories. I should like to tell him that a recommendation for the increase in the salaries of magistrates in the

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Northwest Territories went forward some weeks ago, and it is a substantial one.


Erik Nielsen: I am very happy to hear that.


Lester Bowles Pearson: Mr. Chairman, I do not wish on this occasion to follow my hon. friend, who has just spoken, into the realms of postal affairs. I accept the purity of his protestations on these matters as I recall our own protestations on similar matters when we used to sit on the other side. Today, Mr. Chairman, I want to discuss the recent federal-provincial conference which has already entered into this debate and which I have been assured would continue on that subject whether or not I spoke this afternoon.
Perhaps it is just as well if I put on the record my view of what happened at the conference, its value, its results and what I consider to be its considerable achievements. The conference met in a spirit of friendliness and mutual good will as one would expect in a conference attended by the leaders of the governments of Canada, ministers of Canadian cabinets and officials of Canadian governments, provincial and federal.
It is quite true that the provincial leaders defended very vigorously, as it was their duty to do, the interests of their provinces, just as the federal representatives spoke for the policies and the interests of the federal government. But it is also true that at this conference, as at previous conferences, we all spoke and, I hope, acted as Canadians, and that in a way, an intangible way which cannot be measured, because these things can never be measured, we spoke with recognition of mutual interests, difficulties and problems, with a recognition of the things we had in common, a recognition of the problems we had in common, and I think this conference brought the provincial and federal governments closer together. In that sense the result was a good one.
The procedure at the conference was that which is often followed at conferences of this kind. We had plenary sessions and we broke up into committees. The committees reported back on the last day of the conference, and on that last day we agreed on a communique to the press. There was one innovation, at least in my memory of these conferences it was an innovation, that instead of making longish opening statements at the first meeting, these statements were prepared and circulated in advance, so that when the conference met it had been possible for all the delegates to it to become aware of the position of all the other delegations, and this was the basis for discussion from the very beginning.
Through me the federal government circulated a statement, that has been made public,
[Mr. Chevrier.f
and tabled, on the federal position with regard to many of these matters. Perhaps, Mr. Chairman, it would not be inappropriate for me to put on Hansard two or three paragraphs from this statement which had a specific bearing on certain general matters, general problems and general principles which we had to face at the conference. Among other things, I said this:
In many areas, the federal and provincial governments are responsible for parallel action within their respective jurisdictions. Each must operate in its own sphere of jurisdiction, and respect the other's sphere. That is essential to both the letter and the spirit of our constitution. But it is equally essential that, in discharging the modern responsibilities of government, our parallel action should also be, in an important measure, concerted action. And concerted action means that there should be consultation and co-operation. Such consultation and co-operation can be effective only if they are mutual, working in both directions.
I went on:
This is essentially what I have had in mind when speaking about the need for a "co-operative federalism". This new approach means several things. It means, first a mutual respect for the jurisdictions and the responsibilities of Canada and of the provinces. It means, second, timely and reliable two-way consultation as the basis for co-ordinating the parallel action which Canada and the provinces must take on matters of common and overlapping interest. Third, it means that if and when certain tax fields are shared, this should be done in a manner appropriate to the respective responsibilities of federal and provincial authorities. And it means, fourth, assurance that this sharing not only is equitable between the federal government and the provinces generally, but also is equitable among the provinces themselves, so that each separately can discharge its own responsibilities.
Then later on in my statement on this same general point I had this to say:
A healthy and co-operative federalism requires strength in the provinces; it also requires a strong and healthy government for Canada as a whole, in whose parliament the people of each province have their representatives. Each government must not only have the powers required to discharge the responsibilities entrusted to it but also be in a position to exercise those powers.
There is one final paragraph which I might be permitted to quote:
We are rightly conscious of our differing responsibilities, jurisdictions and powers in government. But we all recognize that we have a common purpose to advance the interests and welfare of the Canadian people. That purpose transcends separate interests without in any way diminishing them, because those interests are contained within it, and because they all contribute to the fabric of a Canada that is more than the sum of its parts.
As I say, Mr. Chairman, there was an opportunity for the delegates to study each other's opening statements, and so when the conference began we proceeded at once to the consideration of the agenda before us. The items on that agenda which commanded most attention and took up most time were those concerned with fiscal and economic

questions generally. At the opening of the first meeting to deal with these questions specifically, again on behalf of the federal government, I put the federal position on the record. This was a closed session, but I think it is not inappropriate if I repeat what that position is, as stated then, because it has a bearing on what I wish to say subsequently.
I mentioned that special emphasis was placed in the briefs of the provinces, and in my view rightly placed, on the provinces' responsibility for our human resources, for our investment in people, and as the most important phase of that, investment for education in all its aspects. That is a responsibility which we as a nation can discharge only by devoting to it increasing resources to match the increasing needs of these kinds. I mentioned that provincial expenditures on education had increased, were increasing and ought to go on increasing, and that this was described in most of the provincial briefs as a priority, indeed in some as a first priority need; on that basis of priority, and indeed on other grounds, that the provinces had made a strong plea for increasing the provincial share of tax revenues in Canada.
They gave, as it had been expected that they would give, priority to education in the whole context of Canadian governmental activities, federal and provincial. They gave priority to education and to the increasing costs of education, and they claimed as a first priority the need to increase the provincial share of the total tax revenues in the country, primarily though not exclusively, to take care of this priority.
That was the view which, as I have just said, and as I admitted to the conference, would come naturally to the provincial governments. It did not perhaps come quite so naturally to the federal government, which had other important responsibilities to consider and which had, in its turn, to remain strong financially and economically, and strong in other ways in order to discharge its responsibilities. Nevertheless we on the federal side made it clear that we shared the view of the provinces as to the high priority that ought to be attached, in the interests of Canada as a whole, to educational improvement, and we appreciated the financial implications of such priority.
I went on to say-as I have already indicated this afternoon-that it was right and proper in our view that at this conference each government should defend its own interests. But then I added this, and it was really a repetition of what I had said in the statement which was circulated before the conference:
But it is also proper that each of us has, above all a lively sense of the interests of the Canadian people, which are the first loyalty of us all. For
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that reason, we do not in these matters argue against you in principle, though we may not accept all your arguments or even your evidence supporting it. We know that your financial needs are increasing-and you know that ours are not decreasing.
So while we might agree, and did agree in principle at this conference, that the provinces needed more resources to meet increasing provincial responsibilities, there was one point, a point of fact, which some of the provincial briefs passed over rather lightly, I thought, but with regard to which we on the federal side were compelled to be very conscious. This was that we were living under a fiscal arrangement which already recognizes increasing provincial responsibilities; that the abatement of federal taxes on personal income in favour of the provinces, by arrangements made previously, was increasing year by year under that legislation. In short, Mr. Chairman, on this matter-and I will be coming back to it again-the question before this conference was not one of principle but of degree of priority and degree of assistance.
It was a question, not of the direction in which we should be travelling both provincially and federally, but of the pace at which it was practicable, or even possible, to move. That question of pace and priority involved fundamental questions about the shape of our tax system in Canada, questions which go deeper and beyond-as was pointed out by more than one representative at the conference-the problem immediately before us, of reallocation. These are questions that go right to the heart of our tax structure and our federal system, questions which are at present under examination by a number of expert commissions both at the federal and provincial level.
Therefore I proposed-and the proposal was made by others, notably, if I may say so, the premier of Alberta who has attended, I think, every federal-provincial conference since 1940

that we take a hard look at this whole question of federal-provincial relations in the tax field. We realized that we could not come up with a final answer to that problem in a conference which lasted only four or five days. It was obviously impossible, as we all agreed at the conference at this first meeting-and it was a first meeting-to rewrite in any fundamental way the fiscal arrangements under which we are now operating.
We had to look at joint programs, of course, because these, among other things, were and remain closely related to fiscal relationships. I made plain in this opening statement, as I had made plain earlier before the conference was called, the federal government's willingness to withdraw from some of these programs, on an agreed basis, if the provinces

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so wished. In mentioning that fact I went on to say we would have to re-examine tax sharing, not only in the light of the changes in costs and responsibilities within our jurisdictions but also in the light of what the provinces wished to propose about shared programs. I said it was only after a thorough review of such programs that we could decide how much or how fundamentally our fiscal relationships could wisely be changed.
It was not difficult, Mr. Chairman, to convince anyone at that conference of the need for such a complete review. The differences of emphasis in the provincial statements- and I take it that hon. members have had an opportunity to look at those provincial statements-were themselves enough to show the need for much more examination and discussion on a matter which more, perhaps than any other, calls not for unilateral action but for close federal-provincial consultations. At this opening meeting I went on to discuss one aspect of federal-provincial fiscal relationships which had to be considered at this particular meeting and which seemed to us to be ready for change. That was what we referred to as equalization. We need, as I said, to take note of the extent of federal and provincial occupation of common tax fields. But on the need for a more genuine equalization applied to any given degree of provincial occupation of the shared fields there seemed to be little room for doubt. I emphasized that the federal government-and I think this view was shared in one way or another by every provincial leader-regarded the concept of equalization as making possible a more co-operative federalism. We could not, I said, have co-operative federalism at all unless all the provinces, with all their variety of size and wealth-indeed, if there was not so much variety we would not need equalization;-had power to discharge their constitutional responsibility, and no tax system in a confederation such as ours would make that possible unless it embodied the concept of equalization.
There was no difference of opinion on that. We all agreed that we could not build, sustain and keep united a strong confederation from sea to sea unless we ensured that the opportunities open to Canadians in one place were not allowed to lag behind the opportunities open to Canadians in other places. Also, an attempt to make opportunities comparable in education and other provincial services would not be successful, indeed would not be possible, unless our tax system secured in some manner to the provinces comparable-not, of course, equal, because that would be impossible-revenues per capita from standard rates of taxation. Obviously, as I pointed out at the beginning and

as became very clear as the conference went on, there was room for discussion as to the formula which would best express this concept of equalization.
There were arguments for taking one type of revenue into account and not another. Indeed, an argument was put forward by one provincial premier for taking every kind of revenue into account. There were arguments as to whether equalization is best defined quite simply, "in order to bring the revenue yields up to those provinces in which, in any year, they are the highest"-I admit at once that it was the position that we had taken in opposition-or whether some slightly more elaborate formula was better because it would give more stability and certainty and perhaps do more to prevent inequities.
I said, having mentioned these points, that these were the points on which we wished to have the views of the provinces before we put forward our own proposal to the conference. I can assure the members of the committee that we did indeed hear those views. It was only after hearing those views that the federal delegation volunteered to put forward a proposal which I will come to later.
Now, Mr. Chairman, in a way, the communique which was tabled this afternoon, summarizes the results of the conference. However, perhaps I could try to put these results under certain headings, indicate very briefly what was accomplished in respect of each of those headings, and in one or two respects go into somewhat more detail.
The first question, and this occupied a good deal of attention, was the examination of the state of the Canadian economy. There was a general agreement on the need for federal-provincial consultation in the formative stages of economic policy of concern to the provinces, and this meant the long term economic objectives. In this connection, the federal-provincial ministers of trade and commerce and of industry agreed to meet shortly at the invitation of the federal Minister of Trade and Commerce.
Then, the next subject, and one that occupied most of our attention, one about which I have talked and will talk some more when I come back to it, was the question of fiscal arrangements. As hon. members know, equalization payments were altered from the national average to the average of the top two provinces and the abatement of federal estate taxes is also increased from 50 per cent to 75 per cent in favour of provincial succession duties. The effective date of these changes, Mr. Chairman, is to be April 1, 1964. The total cost to the federal treasury in 1964-65, and this arrangement is for the forthcoming year only, will be $87.4 million.

In putting forward this arrangement, Mr. Chairman, there has been some charge made, if I can use that word, that this represented a capitulation on the part of the federal government, more particularly to the provincial government of Quebec. It is interesting to note in respect of the charge of capitulation, that the premier of Quebec, when he went home over the week end, was charged with having capitulated to the federal government in Ottawa. We must try, therefore, to find out who capitulated to whom.
The fact is, of course, that there was no capitulation. It is very easy, therefore, for me to answer the question asked on November 27 by the right hon. Leader of the Opposition, which appears on page 5156 of Hansard, when in referring to a brief which had been presented to the dominion-provincial conference by the premier of Quebec, the Leader of the Opposition said, "Can he say whether it is the intention of the government to capitulate to this ultimatum, as has been the case in the past?" I repeat, Mr. Chairman, there was no ultimatum and there was no capitulation. There was consultation. There were concessions, and there was an agreement.
Now, the next question dealt with conditional grants and shared cost programs. As a result of the discussion of this important matter, the conference agreed to set up a working group to study the need for conditional grants and shared cost programs, in preparation for the next federal-provincial conference which will take place early in 1964. No date has been fixed, but it will probably be in February or in March. The conference has been invited, and I think this will be a precedent, in that it will be the first time a federal-provincial conference has met outside of Ottawa, to meet in Quebec. My hon. friend, the Secretary of State, with his encyclopaedic knowledge of these things, tells me I am wrong and that a conference has met out of Ottawa once, and it met in Quebec.
This conference, which it is proposed to hold in February or March, would be in a sense a continuation of the meeting last week to deal with other aspects of fiscal relationship and continue consideration of what was done last week, relating that consideration to what will be done about the shared cost programs. As I have already said, there are important financial implications about the action which may be taken in regard to these programs. In a sense, then, this will be a follow-up of the meeting last week.
The next matter on my list that was discussed was hospital insurance and costs of operation. Here, it was agreed that there should be an early conference of ministers of health to discuss hospital costs and related matters.
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Then, we dealt with the question of categorical assistance programs. One of the constructive changes that was made in the first draft of the communique was to eliminate the word "categorical" which seems to be attached now to these assistance programs. It was agreed that an additional $10 per month would be paid under the welfare programs for old age assistance and for blindness and disability allowances. These are the three categorical assistance programs. There have been a great many questions asked in the house in recent weeks as to what we were doing about this part of the federal program, and in return we have replied that we would wait until the conference met so we could find out what the provinces desired. At the conference it was agreed we should take the step I have just mentioned and we will proceed to do that as soon as possible.
Then, under this heading it was agreed also to establish a working group, a federal-provincial working group to review the operation of all joint welfare programs in preparation for a discussion by the ministers at the next conference. This will be to prepare for the work of the next conference in this particular field.


Thomas Clement (Tommy) Douglas: May I ask the Prime Minister a question? Did the provinces not agree, in agreeing to the $10 increase, that they would raise the allowable income ceilings?


Lester Bowles Pearson: Yes, there was unanimous agreement to that effect and I should have mentioned that. I am not sure of my figures, but I think the allowable ceiling has been increased to $1,260 from $1,140.
We discussed, though rather briefly, the question of the agricultural marketing boards, which matter was on the agenda. After a preliminary discussion that matter was referred to a meeting of federal and provincial ministers of agriculture which is to take place in Ottawa this month.
There was a discussion of Indian and Eskimo affairs, in the course of which we agreed that the objective was to achieve closer association of these Canadians with the lives of other Canadians; and that native people should be consulted as fully as possible so as to obtain their support and cooperation in the realization of this objective. It was decided that a federal-provincial ministerial conference should be held in May 1964 to discuss Indian affairs.
The next item on the agenda was the question of provincial lotteries. There was some discussion of that matter and a special meeting held of the Minister of Justice and the attorneys general. There was a strong desire on the part of one province to have the Criminal Code amended to make lotteries

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legal in any province which desired to have such lotteries. The federal delegation indicated that it had no intention of introducing national lotteries itself but was anxious to hear the views of the provinces with regard to this matter. While one province, the province of Quebec, was strongly in favour of this amendment to the Criminal Code, there were others who were opposed to the amendment, because while they themselves would not have to institute lotteries under such an amendment-there would be no obligation on their part to support any such action-they nevertheless in one or two cases felt some objection should be taken to the recognition of lotteries in this way, and in other cases felt that if there was a provincial lottery in one province where it was legal, there would be great difficulties in enforcing it in an adjacent province where it was illegal. Therefore the federal government, as the communique said, merely took note of the views expressed by the provinces and will have to give the matter consideration.
Then we had a quite complete discussion, or as complete as possible in the short time available, of the Canada pension plan. As a result of that discussion, we indicated that we would supply the provinces in writing with certain detailed information regarding the plan. I had a statement to make on this matter before the conference, and perhaps I can tell the committee that, in introducing the discussion, I listed headings under which I thought discussion might take place, and those headings included the main features of the federal pension proposal. The main discussion ranged around these features: First of all, coverage; to whom the plan would apply. Second, earnings limits; the amounts of income on which pensions were to be paid and contributions collected. Third, benefit levels; the size of pensions and the conditions under which they would be available. Fourth, pensionable earnings; a definition of what a man has been earning as the basis for calculating his pension. Fifth, the maturity period; the number of years over which pensions scales would rise to the full level of the plan. There was quite a vigorous discussion of that and some difference of opinion on it. Sixth, funding; the scale of contributions to be levied in relation to the size of reserves to be provided and the contribution which would thereby be made to savings during the years before the plan reached full maturity. Then next, the relation of the public plan to private plans and the question of such private plans contracting out.


John George Diefenbaker: Would the Prime Minister allow a question at this stage? What were the

views expressed by the federal government in regard to private plans? What is the scheme that the federal government has in mind which will permit the continuance of private plans; or, if continuance is not permitted, the scheme that would give credit to the various participants in present pension plans? What is the general outline in that regard? We have never had that.


Lester Bowles Pearson: It would not be easy for me to go into detail at this time, of course, but I appreciate the importance of the subject and the interest of the committee in it. We pointed out to the conference that while we on the federal side had no objection to private plans contracting out-that is, no objection in principle-there were very great administrative difficulties. Those difficulties had been shown by experience in some countries to be almost insurmountable in the case of certain types of national plans.
Therefore we thought it would be better to proceed-we put this to the provinces for their consideration, and this is one of the matters on which we are writing further and giving them more detail-by introducing the kind of national plan to which private plans could be adapted. The provinces wanted to know about this principle of adaption and we all agreed that whether adaptation of that kind could be possible would depend on the nature of the public plan and how it could be assimilated with private plans, or vice versa. We hope, with the information which we will be giving to the provinces and giving to the house, to remove some of the fears expressed by some of the provinces that this would be the greatest stumbling block in the way of a satisfactory national1 pension plan.


John George Diefenbaker: Would the Prime Minister allow a further question. He is generalizing at the moment, but could he say whether or not the federal government has a plan which will assure that those who today have private pension plans will not find themselves in a position where the contributions they have made and the credit to which they are entitled will not be taken into consideration by any federal plan?


Lester Bowles Pearson: I can give my right hon. friend an assurance that in the plan that we will eventually put forward, after these exchanges of views which I have been talking about, the interests of those who are now contributing to private plans will be protected and that they will not lose by the Canada pension plan. I do not think I can go any further than that at the moment.


John George Diefenbaker: But the plan is ready?


Lester Bowles Pearson: The plan has been ready, Mr. Chairman, but as a result of consultations

with the provinces-and surely this is the purpose of consultations with the provinces -we are now going to examine that plan in light of the views which have been put forward, and in light of the views put forward at two previous conferences with the provincial governments. I think this is the last such conference which will be required, and as a result of this conference and the exchange of written communications which will now take place in order to clear up some difficulties I think we can go ahead with a final federal pension plan. I am encouraged, Mr. Chairman, by the events of last week to say that the position of the provinces, who I hope will co-operate with us in the plan, and the position of the federal government, are both much closer than they were before the conference took place. I think the provincial premiers who were here would agree with that statement. The premier of Quebec indicated the intention of his government to stay out of the plan, as is their right, and to put into effect a provincial portable universal plan. But I think he would agree that as a result of the discussions last week and the final form which the federal plan will be taking, it would be easier for the Quebec provincial plan, if it is put into effect, to be dovetailed into the federal plan, or vice versa. So, as I say, I think it was a helpful conference from that point of view.


John George Diefenbaker: As the Prime Minister has raised the views of various premiers, were the views expressed by the premier of Ontario in keeping with that spirit of cooperation which would indicate that the province of Ontario and the federal government have now come to a position so analogous that there will be agreement in this connection?


Lester Bowles Pearson: I have every hope that that will be the case, Mr. Chairman, but I think I had better let Mr. Robarts-and I am very glad to pay tribute to the constructive part he played in the conference-speak for himself and his government in this connection. But I am hopeful we shall be able to work together and that Ontario will co-operate in a national pension plan. However, it will be for them to decide.
Another point which was discussed concerned other benefits which might be included-provision for disabled contributors, for younger widows with dependent children and orphans. This is another matter on which we shall have to exchange information with the provinces.
A further subject upon which views were exchanged-and it is an important one-was this: what safeguards could be established in order to restrain any tendency-some dele-28902-5-340
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On behalf of the federal government we told the provinces that while we were willing and anxious to modify our plan in any way which seemed practical and desirable in order to meet provincial points of view and, in some cases, political apprehensions, nevertheless there were certain essentials in a federal contributory plan on which we must stand, and unless these essentials were embodied in any such plan we did not feel we could submit it to the House of Commons. Of course, the provinces wanted to know what these essentials were. They were outlined to the provinces during the course of the conference and they are as follows:
1.	The plan must be as near universal as administratively practicable but with provision for voluntary participation.
On this point, there were some provinces which felt that the plan should be universal and compulsory so as to include all wage earners, whether self-employed or otherwise. Of course, that is a desirable thing and that is the objective to which we would be working if we had such a plan; but we felt it would be undesirable to make the scheme universal in a compulsory way from the beginning. The experience of other countries, notably of the United States, has shown how difficult this would be. We felt that the plan should be as universal as administratively practicable and that we should work toward the objective of complete universality.
2.	It should apply up to the average level of earnings.
3.	In combination with the flat-rate benefit, provide pensions which are modestly adequate for those who cannot make other provision for their retirement.

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4.	Leave scope for further provision by those who can make it; to this end, keep the disturbance of private plans to the minimum practicable.
5.	Because many who cannot make further provision are now middle aged, it should have a moderately short maturity period.
There was a good deal of discussion on what that period should be.
6.	Make the adequate minimum pensions available from age 65.
7.	Provide security in real terms by relating pension levels to earnings levels at the time of retirement.
8.	Provide safeguards against the costs of the plan being increased, to the detriment of savings.
These were what we considered to be the essentials in any federal plan.
Now I should like to turn to a subject which, perhaps, aroused the greatest attention, certainly the most controversial attention. I wish to return to the question of equalization and fiscal relations. In dealing with this matter I want to say something about arrangements for liaison and consultation between conferences and the discussion we had on that point.
I said before the conference began, and I repeated it this afternoon, that its success would not be measured by the number of specific decisions which were made during the week. Urgent as some of the problems are, the basic fact is that we were building for more than today. We are, or we should be, shaping the direction of Canadian federalism for a generation. I think the conference succeeded in its most important purpose, which was to ensure as far as it could that the direction in which we are proceeding will be that of what we now call co-operative federalism. In that spirit, I believe the main achievement of this conference, the achievement which is in my view of fundamental importance for the future of our country, was to improve the mutual understanding of the problems of the 11 governments and, on that basis, to provide for close consultation and co-operation in the months ahead.
It was agreed, without any dissenting voice, that it was now of the most urgent importance-more important than it has been in the past-that there should be this kind of consultation and continuous co-operation. Things have been done in the last year or year and a half or two years-and I am not thinking in any partisan way, nor do I wish to-which have been questioned by certain provinces. When these things, or analogous things were done ten or 15 years ago-and, indeed, they were-they were not questioned by the

provincial governments. And there have been activities of the provinces, in their turn, which have had a bearing on federal responsibilities and federal actions. I do not think we can complain about these developments, because they are going to take place. Somehow or other, if the provinces are going to extend their activities in their own fields-and the federal government is bound to do the same- and if these activities overlap-and they are bound to overlap on occasions-and if sometimes, they seem to get in each other's way and contradict each other, it becomes more necessary for consultations to take place between the two levels of government than at any previous time.
I think this was agreed by everyone attending the conference and I am sure it will be agreed by all members of the committee.
On the federal side, it was pointed out that consultation is a two way street, and if we are to consult the provinces on the federal activities which are proposed-legislation and other matters which are of direct interest to the provinces-then the provinces should be anxious to carry out the same kind of consultation when they propose to take action in the fields of industry, the nationalization of power, trade promotion and other matters which have a direct bearing on the discharge of federal responsibilities.
There was no disposition to disagree on the necessity for that kind of consultation. In discussing the way this could be worked out-and again this could not be done in a few days-we agreed that there should be in each government, federal and provincial, some agency under a minister particularly charged with federal-provincial relations and federal-provincial affairs. This has already taken place in some governments. I think there is a minister of federal-provincial relations in Quebec. I believe there is one in New Brunswick and I believe there is one in Manitoba. The premier of Ontario, to his great surprise, found during the conference that he was the minister in charge of federal-provincial relations in Ontario, although he had not been aware of it up to that time. One of his officials told him so.
It was agreed that we should in our respective governments work out suitable machinery in the sense we should have agencies in our governments particularly charged with the responsibility of ensuring, in so far as it can be assured by this kind of action, that there will be the kind of consultation which will remove difficulties before they become crises. Very often when there are difficulties of this kind it is not due to calculation or design on anybody's part, but rather to carelessness and the fact

that we just did not think about it. We know about that in international affairs.
I think this would be a step forward and we all agreed to do that. We on the federal side will be taking steps toward that end.
Then it was thought that in addition to these separate agencies or departments, provincial and federal, we could set up a liaison secretariat. It was felt we should proceed carefully about this, beta ire this is not the kind of thing that should be done overnight in that a secretariat of this kind in Ottawa, if you like, might create more confusion than it would do good in the field of consultation and co-operation, because it would be difficult to figure out at the beginning to whom such a secretariat would be responsible, if it had representatives of all the governments, provincial and federal. We thought this was an objective to be worked out in the light of experience.
Finally, in this field of consultation it was felt it would be helpful if we could have a kind of calendar of federal-provincial meetings each year. At the beginning of the year the federal-provincial ministerial contacts required during the year would be worked out. Some of my hon. friends opposite have had experience with this kind of thing and if hon. members will study this matter, as I am sure some of them have, they will be surprised, if they did not know it before________I
know I was surprised-at the amount of federal-provincial consultation that now goes on and the machinery that has been set up for federal-provincial consultation. It was felt it would be helpful if we could organize this matter, pull it together and relate one kind of consultation to another, so that at the beginning of the year we would have a kind of calendar of federal-provincial conferences during the year, culminating at the end of the year perhaps in a federal-provincial conference at the prime minister-premier level, to which there could also be invited ministers of finance and economic affairs, who would take part in that kind of consultation at the end of each year. We thought that would probably be a very good thing to do.
While there was general agreement on the desirability of this kind of consultation, I pointed out, and I think others had the same feeling, that while consultation is essential, consultation is not an end in itself and consultation can be no substitute for action, as some of us have learned from experience in the field of international affairs. Therefore consultation should not get in the way of action. It should ensure that the action that is being taken is the kind of action that will
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not cause trouble afterwards because people who were concerned were not consulted about it. I hope we will be able to make a good deal of progress in the months and years ahead in this development, which is so important with this new concept of what I have referred to as co-operative federalism.
The most important work in this field lies ahead of us, because it certainly was not completed last week, and indeed the most important subject that we discussed last week in its immediate effect was the question of tax sharing and equalization. As I pointed out, as a result of the conference, the federal government will now propose to parliament certain changes in the fiscal arrangements for the coming financial year. As I have said, they are changes which will mean the federal government's revenues next year will be $87 million less than they would be if the existing arrangements had carried through without change, and the revenues of the provinces will be correspondingly increased.
The changes that are to be made in this field are not exactly the changes that I indicated at the beginning of the conference the federal government would have preferred to make. I emphasized in the discussions at the beginning of the conference, as I have emphasized many times before, my belief in the concept of equalization of provincial revenues through the shared tax field, and we would have preferred to have full equalization, which means equalization up to the revenue level of the top province. We have been criticized and very strongly criticized at the conference, for not doing just that. The hon. member for Burnaby-Coquitlam had a few words to say on this and my hon. friend's successor as premier of Saskatchewan criticized us at the final meeting at the conference, and in public, in much the same terms.
I should like to deal with this particular criticism, but as it will take me ten or 15 minutes to complete what I have to say, perhaps you might permit me to call it five o'clock, Mr. Chairman, before I go into that.


Lucien Lamoureux: Order. It being five o'clock it is my duty to leave the chair in order that the house may proceed with the consideration of private members' business, pursuant to section 3 of standing order 15.


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

Health and Welfare



Gérard Laprise: That in the opinion of this house, the government should give consideration to the advisability of providing all federal government pensioners with free medical, surgical, dental and ophthalmo-logical care.
He said:

Mr. Speaker, I am very happy to introduce this evening the following motion which is found on the order paper under No. 17, and reads as follows:
That, in the opinion of this house, the government should give consideration to the advisability of providing all federal government pensioners with free medical, surgical, dental and ophthalmological care.
Mr. Speaker, when I had this motion put on the order paper on May 17 last-which is quite a long time ago-my aim was then, as it is today, to make the house understand the anxiety of elderly people drawing a pension from the federal government, when they have to face ill health. The small pensions they receive hardly permit any savings. In many cases, when illness strikes, our old people just wait and hope to get over it. They persist in only calling a doctor at the last minute, to hear him say that it is now too late and that they should have called him earlier.
Mr. Speaker, it is because of the many letters I received from our old, blind and invalid people, and others, who have been struck by illness and have nothing but their meagre pension, that I introduced the present motion.
Some lucky people, as I would call them, claim that if the parties concerned do not have enough savings on retirement and have not provided for their old age, it is because they have spent too freely and have not saved enough. In reply, I would say that if Canadian citizens and especially our workers and farmers are unable to save for their old age, it is simply because they have to pay to the government in income tax and otherwise, throughout their lives, whatever they could have saved for their retirement.
Mr. Speaker, that is why we are making this request today and why the people of Canada ask that the government ensure medical security for the aged.
Everybody agrees that that small pension only helps older citizens to survive; it could not be their only source of income.
I feel that it is the duty of the national government to provide for the security of our

retired citizens who can count only on such government allowances to live.
If, as suggested in this motion, the government provided necessary care to people drawing a pension from the state, it would contribute a great deal to the banning of much misery and worry.
I hope the government will consider the motion with the greatest attention and understanding.
I know that the government is now discussing certain retirement plans for our older people. But the subject matter of this motion, that is some forms of illness should, because considerable medical expenses are perhaps more frequent in that age bracket, be the main concern of hon. members.
Mr. Speaker, I hope the motion will be agreeable to all the members and that the government, after having studied it exhaustively, will bring in, as soon as possible, the necessary readjustment.
The federal-provincial conference which has just come to a close has brought a glimmer of hope to our blind and disabled people, as well as to our senior citizens, as far as an increase in their pensions is concerned. But we hope that the government will go one step further and grant that assistance to our older citizens, without a means test, from age 65, and from age 60 in all other cases.
I would like to think that the government will continue to examine carefully the situation and that, together with the provinces, in an improved spirit of understanding and cooperation, it will find the means to give more adequate assistance to the disabled and the blind.


Mr. Lloyd Francis (Carleton):: Mr. Speaker, I think there are very few members in this house who are not in favour of measures to relieve hardship, especially hardship due to ill health, and especially hardship of people in the general category of pensioners. But while we all sympathize very much with the objectives of such a motion, as members of this house we have a responsibility to act according to measures which can be generally recognized as responsible measures.
The wording of this particular motive gives me a great deal of concern. It states:
That, in the opinion of this house, the government should give consideration to the advisability of providing all federal government pensioners with free medical, surgical, dental and opthalmological care.
If there ever was an omnibus resolution, this is one, and I would like to pay a little attention to the problem of definition. The motion refers to "all federal government pensioners." Just whom are we talking about?

Are we talking about the retired employees of the government of Canada? Are we talking about retired members of the armed forces? Are we talking about those persons in receipt of old age security pensions, in receipt of old age assistance, in receipt of aid to the disabled, in receipt of blind pensions, and those who are in receipt of unemployment assistance and general assistance at the local level, which is in part reimbursed to the provinces through federal grants? Are we considering family allowance recipients who, in a sense, are pensioners-if we define "pensioners" as persons in receipt of regular payments from the government of Canada?
The matter of definition has not been faced by the sponsor of this motion, and surely one of the first things we should give attention to is the definition of those who would be eligible for benefits. For example, I find in the last report tabled by the Minister of National Health and Welfare, which states that in March, 1962, there were 927,590 persons receiving old age security. These are certainly federal government pensioners, and their numbers are now approaching one million.
At that time there were 6,562,287 children receiving federal monthly payments. Their numbers again have increased fairly substantially since that date. There were just about 100,000 persons receiving old age assistance, over 50,000 persons receiving aid to the disabled, and 8,750 persons receiving blindness allowances. There were something of the order of 600,000 persons benefiting from the unemployment assistance payments, which were credited through the provinces to the municipalities administering the benefits at the local level.
Surely, Mr. Speaker, we have to define the coverage. I listened carefully to the hon. member moving the motion, and my impression is that he was talking about those persons who are retired employees of the government of Canada. I wish he, or those who will speak in support of it, would clarify this particular point. I would like to know just what particular group of citizens we are talking about, because if we take a definition of pensioner to be anyone who is receiving benefits from the government of Canada, we come up with a very substantial portion of the population of our country. We are talking about something like seven and three quarter millions of persons, something in excess of 40 per cent of the population of Canada, if we take the broadest possible interpretation. If this is the intent of the mover of the motion, then obviously this is a measure of very substantial financial magnitude.
If its intention is to define in a much more restrictive sense the persons who are eligible,
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he has failed to do this so far in the debate; and I think one of the first rules of debate is to define the terms we employ so everybody will know what we are talking about.
We are also talking about benefits. Again, the mover of the resolution is most generous; he wants to provide free medical, surgical, dental and ophthalmological care. This is a very comprehensive approach to health services. I personally-and I am sure this applies to every hon. member of the house- regret any circumstances in which persons in Canada, no matter who they are, are not able to receive adequate health services. Certainly the World Health Organization, in its definition of health as being the complete social, mental and physical well being of a person, takes a comprehensive approach to the problem and suggests that this type of service is one of those things which citizens in a democratic society have some right to expect. The problem, again, is this: It is one thing to respect the right to services; it is another thing, in an omnibus resolution, to bring about a revolutionary, overnight change in a measure under which something like 40 per cent of the population of the country could receive such services, if that is the intention of the mover of the resolution.
If it is his intention to deal only with a small, restricted group of persons who are former employees of the government of Canada, without regard to a means test, that is an entirely different proposition and one I would not be prepared to accept in those terms, any more than I am prepared to accept the omnibus resolution. If it is the concern of the mover of the resolution to deal with various categories of disabled persons, blind persons, recipients of old age assistance-and there was a reference in his opening statement to such persons-I think he has an obligation to look at the services being now provided province by province across Canada. In one breath the mover of this resolution talks about constitutional problems; he is very anxious that the federal government should not invade anything that is a provincial responsibility or provincial prerogative. Health traditionally has been a provincial responsibility in Canada, and the federal government's role in this field has been largely developed in the direction-I say largely; there are some provisos which I want to deal with later-of making grants in aid to the provinces for hospital insurance and diagnostic services provided by the hospital. The Hospital Insurance and Diagnostic Services Act is an example of this. That is a good example of the role the federal government plays in this field, and the rights of the provinces and their primary obligations in this area have been carefully safeguarded.

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Many provinces in Canada have developed programs of health services for special needy groups of persons. The province of British Columbia, the province of Alberta, the province of Saskatchewan, the province of Manitoba and the province of Ontario have developed programs by which they have made per capita allowances into pooled funds. Out of these funds services are provided. The medical profession bills the fund, usually on a fee for service basis, for services rendered. If the funds are insufficient to meet the claims as billed by the professional men, there is a formula for taxing the claims, pro rating them and administering them out of the funds. This is to safeguard both the professional man, the provider of the service and the recipient of the service and is in the interests of the public in that it makes sure that funds which are committed in this area are used wisely and effectively, with a minimum of waste.
If it is the intention of the mover of the resolution that such funds should cease to operate, I think he should say so. If it is his intention to extend this type of coverage, province by province, to those parts of the country in which such benefits are not now enjoyed, I think he should frame a totally different kind of resolution to place before this house. I for one do not believe it is the responsibility of the federal government to intrude upon fields which have been developed and are now being exercised as provincial responsibilities, in the form of adopting this kind of resolution, without a great deal of prior consultation to make sure that, whatever moves are made, they are made with the consent of those affected and with due regard to our constitutional arrangements. I find it difficult to believe that the mover of the resolution can speak so strongly of provincial rights in one respect one day and then make a motion of this nature which would, in a very revolutionary manner, set aside provincial rights and intrude the federal government into areas in which the federal government has not so far been regarded as having a primary responsibility.
When we talk about the provision of these services I think there are two or three very fundamental principles involved. If the object is to provide free medical, surgical, dental and ophthalmological care, we have to make sure there are the necessary facilities for the provision of such care. Traditionally there have been two approaches. One is for the federal government to provide such services, in the manner, for example, in which the Department of Veterans Affairs provides services. The last annual report of the Department of Veterans Affairs that for the fiscal year 1962-63, which was tabled in this house, shows

for example that 182,713 men and women are receiving service-connected pensions, benefits as a result of pensions which have been awarded from war service. A wide measure of care is provided to such persons through hospitals operated by the federal government, through medical practitioners who work for the federal government, and others and who perform services under an established tariff for the federal government. A broad range of health services is provided of a standard that I am proud to say makes Canada rate very highly with regard to other nations of the world. Certainly a tremendous amount has been done by way of providing services to veterans that certainly goes far beyond the record of previous wars and the record of many other countries associated with us in our military efforts. But this type of provision is an expensive one. I for one do not quarrel with expense as such-although as public representatives we must always be aware of expense-but I am concerned with an approach which selects certain groups of the population for preferred benefits and does not provide a general, across the board approach, which I think is the healthier one and one that we must set as an objective.
In regard to hospital insurance, one of the conditions the government of Canada required of every province signing an agreement before it could claim federal grants in aid was that services must be universally available within the province. "Universally available" meant there should be no arbitrary or categorical distinctions; that citizens of Canada or people who met the residence requirements, regardless of age, regardless of sex, regardless of any other social attributes that may or may not have been the basis of discrimination in other countries, would be eligible for services as a matter of right within the framework developed. I think it is wrong to pick out one category of citizens. The category the mover of the resolution has in mind may be people who happen to have been employed by the government of Canada. Perhaps he has in mind that they should qualify under a means test administered for one of the various aid programs. It is not clear from his statement what he had in mind. Regardless of what he has in mind, I personally feel that the objective in the extension of these services should be on a universal basis, or at least a basis which is spelled out clearly to allow broader sections of the population to benefit.
One of the methods of determining it could be, of course, the means test. That is the basis of eligibility for the category of programs to which reference was made a little while ago. But to set up a category of the population, a large group of persons,

as those who would be eligible for services on the basis of a means test is a fundamental move which this house could not take without a great deal of prior consultation with the provinces, and with the professions involved.
The other method on which services have been provided is the so-called indemnity benefit. Instead of the service approach, you take the approach of providing benefits through an indemnity type of insurance plan. I do not think, generally speaking, the benefits under the indemnity type cover complete medical, surgical, dental and ophthalmological care because the private insurance companies, in developing this indemnity approach, generally insist upon certain types of financial deterrents, such as the co-insurance clause, before comprehensive insurance of this nature is underwritten. Again, there was nothing in the resolution or in the introductory statement by the mover of the resolution which suggested that he had this type of provision in mind, the indemnity type of approach, which is the approach generally favoured by the private insurance industry, and many of other carriers.
Regardless of which approach is taken, the service approach or the indemnity approach, there must be a careful determination of the categories eligible. There must be a careful spelling out of the limitations of the financial commitment with respect to the services used. With many of the service plans a pro rata device or a pool fund seems almost inescapable, if the service approach is to be adopted. If, on the other hand, the indemnity approach is to be adopted, then certainly the experience with those plans which have experimented with this type of indemnity plan would not indicate that the type of coverage provided would meet the general requirements of this resolution, that is free medical, surgical, dental and ophthalmological care. Certain deterrent charges requiring the patient to pay a portion of the charge has been found, in many cases, to be necessary as part of the administration of these plans in order to keep financial responsibility within limits.
In summarizing what I have argued, may I say that the mover of this resolution has not defined "federal government pensioners". As I have pointed out, a very large proportion of our population receive cash benefits from the public treasury, and they could fall within the popular acceptance of the term "pensioners", as used in this resolution. If, however, it is the intention to restrict it to exemployees of the government of Canada who are retired, or to those beneficiaries of the categorical assistance programs administered by the provinces with federal government
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reimbursement, then that is another matter. This has not been made clear. If the hon. member's introductory remarks suggested that categorical assistance recipients should be eligible for this care, then there would at least have to be a great deal of discussion with the provinces in a federal-provincial conference before any move of this nature would be justified by the federal government. I feel that there is a grave constitutional question as to the way in which the resolution would be interpreted in its present wording. I am not saying it could not be done, but I am saying if that is the intention of the mover of the resolution, then his resolution should have been worded accordingly.
I pointed out, sir, the way in which benefits were provided on the service basis or on the indemnity basis. The service basis has been adopted by D.V.A., and that has a very obvious limitation within the framework of the program itself. I feel, Mr. Speaker, that a commitment of this magnitude for the benefit of certain categories of the population only, is not a proper approach. I would prefer to approach assistance of that type in the hospital insurance field, for example, where we have the general categories of the population benefiting. If it is the intention of the mover of the resolution to adopt the indemnity approach to his provisional plan, then this has not been stated and is by no means clear. The indemnity approach, as exemplified by the private insurance companies, contains many deterrent clauses and co-insurance clauses, while the wording in the resolution refers to free medical, surgical, dental and ophthalmological care.
For all of these reasons, I feel that the mover should withdraw this resolution and introduce one more precisely worded to state his intention, indicating clearly what group of the population he intends to have covered. I think such a resolution should also define much more carefully the method of providing benefits. I do not feel, Mr. Speaker, that in the manner specified in the resolution it is possible to cover the greatest range, because of the limitation on the concept of providing service, and at least the resolution should spell out quite carefully the intentions of its mover.


Mr. William Dean Howe (Hamilton South):: Mr. Speaker, I should like to say a few words on this motion. I take exception, first, to the use of the words "federal government pensioners" because this term is not defined. One should define what a federal government pensioner is. If we assume that all those now in receipt of a pension from the

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federal government are included, then I believe this type of service is provided for these people now.
Then, too, I take exception to the use of the word "free" in the wording of this resolution because this puts people in the category of accepting charity, which is a degrading state. We, in this party, feel that medical care is something one has a right to pay for, and therefore one is not accepting charity. Then, too, this should not be limited to old age pensioners or to federal government pensioners, but rather it should be available on a universal basis. People should receive medical care in accordance with the need for medical care, rather than in accordance with ability to pay.
At the present time, I believe it is rather degrading to subject these people to a means test. This takes a person out of the category of being a human being, because in many cases he is herded into hospital clinics. It is degrading because the person cannot have any worldly possessions at all. He must get rid of them before he is eligible for free medical care. This care is very limited so far as private doctors are concerned. The patient is allowed to go to the hospital for major procedures, such as surgery. In the hospital students who are learning, interns, are allowed to look after these people.
This state of affairs does not make one very happy. I have worked in it; I have seen it. I have had many patients myself in need of medical, dental or ophthalmological care, and this care was not available to them under any circumstances, unless a friend provided it or someone donated money.
Another bad feature of charitable care of the sort we have now is that a person is looked after by the private doctor up to a certain point, and then the patient goes to a hospital clinic. At that point that person loses complete contact with his family doctor, which I think is a bad state of affairs. Contact should be maintained. It must be something which is continuous, and the patient's history must be followed through in all its phases. If such a person is to receive charitable care, 1 think there should be liaison with the family doctor so that the patient is adequately looked after and cared for on a continuous and interested basis, keeping in mind that the man is a human being, regardless of his financial state.
The degradation of charity suggested by this motion is a very poor suggestion. On the other hand the suggestion that these people receive medical care is an excellent one. The wording of the motion is very poor in that it is not explicit at the beginning and it is too all-inclusive of the type of care a

person gets, which is putting him on a charitable basis, as I have said, rather than on the basis that the man has earned his right to health.
I think the government should set themselves up as an ideal employer, and their employees should be covered by a plan, contributions toward which are deducted from their pay, and the plan carried on after retirement. At least, that should be done on a temporary basis until we have some universal form of medical care for all our citizens. The government should be an ideal employer. The motion intimates that government employees are not adequately cared for but require some special action to get complete medical care on a charitable basis. I think the wording of the motion is such that the question needs further study. This motion should be more explicit in its definitions before it can be accepted and approved.


Mr. D. G. Hahn (Broadview):: Mr. Speaker, in rising to speak to this motion I think all of us can be tagged with the same tag, and that is that we literally do not know what we are talking about; because the resolution is so ill defined it is impossible to really clearly understand what the sponsor is proposing. The motion suggests that the government should provide medical services to all federal government pensioners. But it stops there without, as has been previously said, defining the motion further. It does not say which particular federal government pensioners. It does not say whether we are talking about old age pensioners, veterans or retired civil servants. It does not say whom we are talking about, so we have no idea from the motion how large a body of people we are referring to.
In the second place, it does not clarify exactly what type of medical, surgical, dental and ophthalmological care should be provided. Does this mean free glasses? Does it mean free medicines? Does it mean free dentures? We just do not know. So the motion tosses out what is a very nice idea, but does not in itself define it. It leaves out what I think is a pretty important piece of information which must be brought before the house, if we are to look at a measure such as this. Nowhere does it indicate how much this service would cost. How can we in all conscience pass any piece of legislation in this house without some idea of the cost involved? Not only should we know the cost; we must also have some idea of how we are going to raise the funds. Is the recommendation of this particular motion within the economic power of the country? What effect will it have? Is it far reaching enough that it is going to be a major piece of social legislation which will put a major burden on the treasury, or is the motion referring only

to a small group of people, to limited services, and hence a limited drain on the treasury? These things we do not know, and I think we must know about these matters before we can pass judgment on such a piece of legislation.
This motion covers a certain group of people with a certain type of medical care. But neither proposal is clearly defined. It also excludes some people. Let us look at some of the people who are excluded. Excluded, as I read it, from the free medical care might be the welfare cases in our municipalities. Surely these people are in need of medical, dental and other care. Surely they need it as much as some classes of federal pensioners. In proposing this motion the hon. member for Chapleau (Mr. Laprise) did not tell us why he selected for this special treatment the group he did, but excluded others. He did not say a word about those who are excluded from this care and those who might be equally deserving.
The last point on this proposed measure is the problem of provincial rights. We have had a lot of discussion about this problem in the last few months, and it seems to me that here is a motion which, if it were drafted as legislation and passed, would be a direct impingement on the rights of the provinces. Nothing has been said by the hon. member about that particular aspect of the problem, which I think is a pretty important factor and calls for further study.
This motion, Mr. Speaker, probably will not come to a vote. I think the reason for this is that we have here a good concept, something to which it is very difficult to say no. It is extremely difficult to go on record as saying no to giving medical care to people who need it. So we start with a good concept, to which it is difficult to say no. In proposing the motion the hon. member puts us on this side of the house in this position: What would happen if we voted for this motion? It is true the motion does not bind the government, but it is surely an expression by the house, directed to the government, of an opinion that the government should give consideration to doing certain things. A favourable recorded vote would be a pretty strong lever toward directing government action, and I believe the government could be properly held to account if they proceeded to do nothing. Therefore we on this side are put in the position of accepting this motion, of voting against it, or of doing something else. If the motion is agreed to, as I have mentioned earlier the government will be put in the position virtually of having to do something about bringing forward legislation in this area. Because, as I say, it is very difficult to say no to a measure which contains the germ of an idea as good as this.
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Health and Welfare
We are, thus, in the difficult position of having to find some other means of stopping this motion, because this particular motion cannot be allowed to pass. I do not think any member of the house could, in all conscience, allow a blanket resolution of this kind to go through, or assent to a piece of legislation without having some concept of the cost involved. As was pointed out by the hon. member for Carleton (Mr. Francis), this could turn out to be a piece of social legislation of great magnitude; it could have a significant effect upon the economy of the whole country and we would be negligent in our duty if we allowed it to go through without knowing how great this effect might be.
Many of us are reluctant to put ourselves on record as being against some course of action which would be a nice thing to be able to do. So, in all probability, we discuss the question and are horrified because there is no further time left. I believe this is not a particularly good process. Maybe if we were to get a vote on some of these measures there would be a better discussion of these points. But I do not think we should be required to vote on some of these issues, unless their full impact has been presented to us. In other words, if we on this side are to be expected to say yes, or no, the speakers on the other side of the house should, equally, be expected to present a fully rounded package for discussion; they should indicate the less agreeable side of the proposition-the extent to which taxes would need to be raised to put their ideas into effect, and so on,
I do not think this motion will, in fact, come to a vote, but if it did, in the circumstances I would have no choice but to oppose it.


Mr. Gerard Girouard (Labelle):: Mr. Speaker, just a few words about this motion. Like the members who spoke before me, I did not fail to notice a lack of precision in this motion, with regard to the beneficiaries and, finally, with regard to the amounts; as some understand it, private members' hour simply gives the members an opportunity to express their views, but I am happy just the same to make a few remarks about the measure under consideration.
I am pleased with this motion because the house realizes that it has some merit and especially because it enabled some members opposite to insist, in the name of the constitution, on the rights of the provinces.
While I was listening to the hon. members opposite, I told myself that if they had shown the same zeal during the election campaign,

Health and Welfare
when the portable pension plan was promised, the province of Quebec would not have to make such a fuss to have the plan postponed.
I admit that in my opinion, the hon. members were right when they raised the big question of the constitutional character of the measure with respect to recipients. I think the motion could include the category of people having worked for the federal government and, simply, our old people who are in receipt of an old age pension.
If I suggested that this notice of motion would help setting up a pension plan beneficial to retired employees, the federal government itself could establish a plan and thus set an example for all employers throughout the country.
It is high time the government consulted with the provinces in order to provide our pensioners with the medical care they need. The government gave them a $10 pension increase, and I must admit, that this is very commendable. The main concern of our old people is, of course, housing and food, but as mentioned by the hon. member for Chap-leau, they are mostly obsessed by the fear of illness. They fear that in a month or two, they will be ill and will have to face the cost of medical care.
In my opinion, the government should consider social legislation, providing free medical care to government pensioners, because in a developed society it is quite unlikely that our senior citizens would be starving and roofless, but it is still possible for our old fathers and grandfathers to be deprived of dental care, opthalmological or medical care, simply because they cannot afford them.
I take the opportunity afforded by this motion to suggest to the government, that when they decide to give something to our old people, they should grant free medical care rather than an amount of $5 per month which has been mentioned, even if I am also in favour of that suggestion.


Miss Pauline Jewett (Northumberland):: The
hon. member for Labelle (Mr. Girouard) has just said his understanding of the motion is that it would cover retired employees of the federal government, and old age pensioners. I am somewhat confused because the hon. member for Chapleau (Mr. Laprise) in introducing the motion talked mostly about the disabled and the blind. Presumably he thought these would be the primary groups in receipt of free dental, medical and other care. Perhaps this only goes to prove what other hon. members have already argued this afternoon, namely that none of us is sure about who are covered by the phrase "federal government pensioners" in this motion.

However, rather than take the hon. member for Chapleau further to task for his definition, I think I shall congratulate him on the wisdom he has shown in a general way in implying, at any rate, that matters relating to health care are a national responsibility in this country. I have often felt in recent weeks and months that, increasingly, members of this house and, to a still greater extent, members of provincial legislatures, particularly in the province of Quebec, have been taking the view that matters relating to health and welfare are matters solely of interest and concern to the provinces. This has saddened me. I think these are matters which affect all Canadians and with regard to which we should have certain national goals, objectives and standards. Therefore, if the hon. member does not mind, I would congratulate him on bringing forward a motion of this kind which does, it seems to me, clearly imply a national responsibility in this field. It is true his proposals cover only one sector of the whole health field. Nevertheless it is clearly a large sector, as my hon. friend from Carleton has pointed out, if the term "federal government pensioners" is taken in its widest meaning. But, if I may interpret the hon. member's opening remarks, his feeling seems to be that this would only be a beginning, and that later we might move toward a comprehensive or universal scheme of health insurance for the country as a whole emanating from the federal government, undoubtedly in co-operation with the provinces.
Apart from congratulating him on sharing my feeling that this is a national responsibility, and that we must have national objectives and national standards in the field of health, I should like to say, as the hon. member for Hamilton South (Mr. Howe) said-here I am afraid I am being a little critical-that I feel the use of the word "free" is inadvisable. It strikes me that it does seem to smack a little of charity, of a government handing out largesse in a kind of benignant way to the poor, the elderly and so on. I am sure the hon. member did not intend it in that way, but when one phrases a motion as he has done the implication is one of condescension to a large number of citizens of our country and, of course, certainly none of us should feel condescending toward them.
The hon. member for Chapleau implied that the older citizens of Canada would not be in the difficult position they are in today in relation to the enormous costs of health care which practically all of them face, had they not had so much of their incomes taken away from them by taxes during their working years. It is through taxation primarily, of course, that we are able to redistribute

income in such a way as to make possible a health scheme or a social welfare scheme in this country.
My experience so far in the political field, and it is a short one, has been that often those people who have smaller incomes object the least to the paying of their share of taxation. I find that the people who receive larger incomes are usually the ones who grumble a great deal about taxes, and may try to find ways of avoiding them. The great bulk of the Canadian people, it seems to me, are quite well aware of the fact that it is through the payment of taxes that we get a redistribution of income and all the benefits. Indeed, to quote a famous justice, it is through the paying of taxes that one buys civilization. I do not believe the people think that one should simply take away taxes, and then let them do all the worrying about health care, and other provisions for their later years. Surely most citizens believe rather in a social welfare scheme of things whereby they will be able to make some contribution during their working years through taxes, and whereby they will be able to make a contribution more or less in accordance with their incomes that will then enable all members of the society to have a decent standard of living and, if necessary, of social security, including old age pensions, and so on.
To revert for a moment to the use of the word "free", as I say it does imply, whether or not the hon. member intended it, a kind of condescension of those who have to those who have not, which to my way of thinking is quite contrary to the way we really feel about matters in this country. I believe that all of us, no matter what our incomes, really want to make some contribution to the total welfare system.
This brings me to the final point I should like to make, and I will not say much about it because other members have mentioned it. It is that we do want to have in this country a universal system whereby all people of all ages, children as well as adults, will have contributed to a general health and welfare security scheme which will include them and of which they will be a part. Indeed, it is my hope that before the four years are up that we will be in power we will have introduced such a scheme in the health sphere to complement what we have already done in the hospitalization sphere, and what we are now in the midst of doing in the old age pension sphere.


Mr. J. E. Lloyd (Halifax):: Mr. Speaker, I find myself in agreement with those critics of the wording of the resolution who have indicated that it leaves unanswered a number 28902-5-341J
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of questions as to the scope of its application. I believe the resolution perhaps fails to guide the government in that it refers in its wording to all federal government pensions. Here is a point where one finds a most serious omission. Indeed, if the resolution were passed the government would have to send it back to the house for clarification and identification of the thoughts that were in the minds of members of the house when they passed such a resolution. In essence, therefore, if the resolution were passed we would indeed be occupying the attention of the government to no avail, and this would simply result in a waste of time.
I share the concern of other speakers that certainly our society in 1963 must look at every avenue possible to provide social justice for its citizens. Indeed, the things we are now engaged in in many ways in trying to protect the free world are such-


Mr. Deputy Speaker:: Order. The hour appointed for the consideration of private members' business having expired, the house will revert to the consideration of the business interrupted at five o'clock.

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


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Lester Bowles Pearson: Mr. Chairman, in winding up my remarks on the recent federal provincial conference I wish to say something in greater detail than I have up to the present on one matter which caused very considerable interest and some controversy; that is the formula which the federal government announced to alter the equalization payments to the provinces.
I admit we could have adopted a formula which would have equalized the revenues from the tax sharing sources up to that of the highest province, and if we had done that there would have been, presumably, no criticism that we were not carrying out a formula to which we had been committed previously. But if we had-and the conference certainly showed this-we would have been criticized by some members of the conference in other ways.
This was a conference, as I said at the beginning-and I quoted this afternoon from my words to that effect-at which


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: We have, in the steps we have taken, preserved the essential interests of the government of Canada, which must be preserved. We have set ourselves, I believe, on the path of a successful and effective cooperative federalism, the path that is fundamental to the unity and progress of our country.


Paul Raymond Martineau: Mr. Chairman, I wonder if the Prime Minister would answer a question?


Lester Bowles Pearson: If I can.


Paul Raymond Martineau: Does he envisage that it will be necessary to effect early changes to the British North America Act in order to implement the co-operative federalism of which he spoke?

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Lester Bowles Pearson: I cannot answer that question, Mr. Chairman. I would hope it could be done within the confines of the present British North America Act; but if constitutional changes are required and they are agreed to by the provinces and the federal government, of course they could be made.


John George Diefenbaker: Mr. Chairman, this evening I do not intend to go into too much detail or review what was done at the recent conference, excepting in a general way. It may be, as a result of what the Prime Minister has said and what will be said after I speak, that the committee will continue to debate this matter, in which case I will have an opportunity later during the progress of the discussion in committee to deal in particular with a number of matters referred to by the Prime Minister. I say at once that his concluding words, while well chosen and having merit of a crescendo in hope and aspiration, are exaggerated beyond anything that I have heard descriptive of any benefits that may have flowed from this conference.
I say at once that this conference was preceded by pre-conference ballyhoo designed to lead Canadians to expect a solution to their problems under a new confederation formula. From day to day there were outstanding examples of hyperbole to build up the conference in advance, to create a crisis atmosphere as it were, to frighten Canadians that confederation was on its last legs. During the course of his opening words to the conference, the Prime Minister used such expressions as "a new beginning", in reference to what was about to be placed before the conference; a new chapter. In the light of what has taken place, I can only say that the hopes and anticipations that this conference was to do something that no other conference had ever achieved, have been dashed, and the event has proven to be a highly propagandized one which did not achieve the results which were expected. As a matter of fact, it looked for several months in advance that a banquet was going to be provided for the provinces. Well, several of them went home hungry.
I can only review this matter by going back a few months prior to the election campaign and placing before the committee something of what was said at that time, and noting the degree to which the rash promises were dissipated in the light of what took place at this conference. In his opening speech the Prime Minister said, in effect, that the conference would shape the direction of Canadian confederation for generations. Tonight he says it shaped Canadian confederation for one year.
[Mr. Martineau.l
Now, sir, I am going to refer to something that I think has been an effective outcome of this conference, and that is that this government has learned there is such a thing as consultation to make confederation effective. Consultation with the provinces on these matters that affect the provinces should be made in advance of action taken by the federal government. When the results will be felt not only by the federal government or when action concerns joint programs between the federal and provincial governments, there should be the widest possible measure of consultation. I suggest that when the next conference is called there should be a representative for the northern territories. Over and over again, the hon. member for Yukon and the hon. member for the Northwest Territories have been asking for action in that direction. Only within the last few days the Yukon legislative council passed a resolution requesting that a representative councillor should sit in as an observer at such a conference. I think that is something to which favourable consideration should be given.
We have contended that this government, in a cavalier manner, has been disregarding the basic principle of confederation, which is consultation. My hon. friends opposite have said that there was no basis in fact for our demand for consultation. I have always found that the best witness one can call is a witness that is not unfavourable to the side against whom an argument is being advanced. I call as my witness in support of the stand which we have taken in this connection the Hon. Jean Lesage, the premier of the province of Quebec. I ask the pardon of the committee for reading these lengthy remarks into the record. The length rather denies me doing that under normal circumstances, but I know after I have read this the committee will agree that it has a place on our records.
During the course of the past few months, we have had several unfortunate examples of a lack of consultation; the municipal loans fund, the pension plan and the designation of depressed areas eligible for special economic aid. This latter measure, because it considerably modifies depreciation allowance rates, constitutes a serious onslaught on the fiscal and administrative economy of the provinces, for without their consent, it influences their basis of taxation.
These views, now expressed by the premier of Quebec, represent the stand we have consistently taken throughout this session.
Thus, it is one government which-
He is referring to the government sitting opposite.
-without previous consultation, will determine the taxable income of another. It is true that Ontario and Quebec could refuse to grant this accrued depreciation allowance since they themselves collect corporation taxes. However, by acting in this way, one would reproach them, for creating

many useless complications and with not cooperating with the federal government and the other provinces.
Now, the next paragraph reads as follows:
An immense confusion which persists to this very day-
This very day was November 25, 1963.
-is the result of all these unilateral decisions.
You will notice, sir, that "all these unilateral decisions" were those made by the present government in a period of seven months.
Too late we realized that the goals of the federal government did not necessarily meet with those of the provinces. It has provoked perfectly understandable spine-stiffening. This offensive, with centralization as the target, inevitably gave rise to violent reactions.
I pause now to explain that here the premier of Quebec said the present government is a centralizing government. This is exactly what we have been saying. We have been pointing out his conduct and his policies. I imagine that the smile now on the Prime Minister's face was not there when Mr. Lesage was giving him this lecture.


Lester Bowles Pearson: I smiled because you said that we had capitulated to him.


John George Diefenbaker: I have touched a sore point to make the Prime Minister smile like that. It is the centralizing activities of this government, not the previous government, that Mr. Lesage is dealing with.
Such experiences must never be repeated for the very essence of the confederate system shall disappear.
That is the warning of a Liberal premier to a government which, in a few months, has earned his condemnation for its centralizing proclivities. It is no longer sufficient to make honourable amends before harm is done and to promise that, in the future, intrusion in fields of provincial jurisdiction will be avoided. For let us not forget that the harm has been done and that it constitutes a precedent that no one will fail to invoke in the future, no matter what happens. These were our views regarding the centralizing conduct of this government in the legislative measures which it introduced and to which the Prime Minister has made reference.
Quebec-and several provinces share its opinion in this respect-is definitely opposed to the federal government's jostling the priorities of the provinces by unilateral action.
Then it says, in order to sweeten the dose, probably well intended but not always well measured:
This is obvious in the case of regional development and the locating of industries, which fields are clearly of the provincial jurisdiction. We do not conceive the role of the federal government as one giving direction to and determining the policies which the provinces should follow in fields of their own jurisdiction-
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I do not have to make any observations on the statements made by the premier in this regard. However, throughout the period of the last several months when we have raised these objections the Prime Minister and the President of the Privy Council, who is the epitome of knowledge about everything connected with legislative distribution of powers, in his own estimation, gave support to what was done, which denied the basic principles of confederation. That this government has learned; for it now agrees, as the Prime Minister has pointed out in the most fulsome terms, there is a need for consultation. The communique says in this regard:
It was agreed that both the federal government and the provinces would take steps to improve their arrangements for close and continuing consultation.
There was general agreement about that.
Now let me deal with some of the matters which were considered. The provinces agreed to provide their share of old age assistance and pensions for the blind and disabled. There is nothing unusual in that. As to the pension plan that was advanced here with such a shrill burst of trumpets, that plan no longer exists. The federal government has retreated from its original arbitrary position and an advance will now be made toward the achievement of a comprehensive plan because of that retreat.
I come now to the question of equalization, and also to the general fiscal arrangements which have been made. We find that great changes have taken place in a few months. A few days before the election an ultimatum was given to Ottawa by Mr. Lesage. Not one paper in Canada failed to describe it as an ultimatum. The Canadian Press report of the Ottawa Journal is dated April 6 and says:
Premier Lesage last night laid down a virtual ultimatum to the next federal government to turn over a minimum of 25 per cent of income and corporation taxes collected in Quebec-
In a budget speech highly flavoured with election spices Mr. Lesage reviewed the fiscal policies of the four federal parties. ...
The premier gave the next government, no matter which party forms it, one year to meet Quebec's demands on federal-provincial fiscal problems.
Another report in the Financial Times is as follows:
One year to act, "or else". Quebec is carving out a new role for the provinces of Canada. In an almost pugnacious speech the premier gave the next federal government 12 months to meet his demands-
Specifically, Mr. Lesage asked, at the least, for 25 per cent of all personal income taxes collected from residents of the province, 25 per cent of corporation taxes, 100 per cent of all succession duties.
He Intends to get them.

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With reference to tax sharing conferences Mr. Lesage said:
"I have no intention of repeating the same-results"-
He left an ominous but undefined "or else". What does that mean?
Then Mr. Levesque had something to say, which is reported in the Montreal Gazette for April 25 as follows:
Natural resources minister Levesque said last night acceptance of Quebec's tax ultimatum by the federal government is "probably the last remaining chance" for confederation.
He warned that if the new federal government fails to act within 12 months on the "minimum demands" on tax sharing spelled out by premier Lesage in his budget speech of April 5, "I think the supreme chance for confederation will have been lost-and for good".
The other day I asked the question, before I had seen the attitude which was being taken by the premier of Quebec, whether or not the ultimatum would be accepted by the federal government. No objection was taken then; but it was said earlier today that there was not an ultimatum. I have before me La Presse for November 22 which says:
M. Lesage retire son ultimatum.
"Mr. Lesage withdraws his ultimatum." Is that not a strange thing, Mr. Chairman? From fire and brimstone in April to honeyed words in November. I find it difficult to understand this change. Were the arrangements made as the premier of Quebec and the leader of the Liberal party met two or three days before the election? Were the arrangements made while the premier of Quebec, full of fire and fury, was saying these things?
At the same time, an arrangement was being made between these two: Don't worry about it; all will be well. The fury and the forcefulness of April suddenly became the joyfulness of November. Indeed, he has not secured the things he said he was going to get-"or else". He ended the conference by saying: I will be with you next May or June, or whenever the next election comes around. Is that not the strangest transformation in all history? He said: I will support them; this is so good that I will stand with them whenever the next election comes.
What happened? What happened in the intervening months? Why did this change take place? I read in Saturday's issue of Le Devoir: "Lesage is unhappy but he intends to recoup in March". So that is the beginning of the story which is so difficult to understand. Why the earlier ultimatum? Why the subsequent retreat? The Prime Minister says this is a good deal. He says the premiers were not all happy about it. Mr. Speaker, the honey may be sweet at this time, but the bee will: sting. Oh, it is an interesting revelation; If only the Prime Minister would .just be frank, and tell

us what they did as they sat down together to bring about this metamorphosis in the thinking of the premier of Quebec.
Today, the right hon. gentleman says this is a fine deal which has been brought about on equalization. He says the purpose of these grants is to bring about an equalization in the per capita revenue of the provinces from direct taxes. He promised that equalization revenues would bring the recipients up to the position of the highest provinces. That was the undertaking. That was the promise. I have it. here .in two or three places. Why the change? What came about? Well, he said, it came; about because, in an attitude of mutual respect, we discussed these matters. He undertook that the equalization would be carriqpl out on the basis of the per capita taxes of the highest province in Canada. A while ago he gave us the results which would have flowed from Vhe carrying out of that promise. He said we were wrong in what we did with regard to equalization, and he undertook to make a change, an undertaking from which he has now completely retreated. It is difficult to understand what may have happened in the course of the last few weeks to bring about this change.
In 1961, the Liberal convention said equalization should be on the basis of the highest province. All through the election campaign the right hon. gentleman said this, and 'those sitting around him said the same thing. When he went to the conference the other day he said he thought this was the proper course. This evening he gave a record of what the distribution of the moneys would have been had he followed that course. Why the change? Today he would have us believe it came about as a result of consultation. A few weeks ago he indicated the hopes ahead of this'conference: Canadian federalism to be fixed up for a generation. This evening he admits that what has been done is simply a makeshift, an improvisation and a postponement for another year. That admission indicates that this government does not yet know where it ingoing on this problem. But it does know that it has no intention of carrying out the undertaking which it made from 1959 and 1960 to the election in 1962 and 1963. What has been the distribution? It is a case, after all, of the mountain in labour which brought forth a mouse. Eighty seven million dollars-


John Whitney Pickersgill: Is that a mouse?


John George Diefenbaker: It is, compared with the larger animal envisaged by Mr. Lesage. He said he was going to get $150 million as a minimum. What the total for Canada would have been, had he done so, I leave to those who know something of billions. The right

hon. gentleman and his friends changed around. They produced $87 million. They did not produce that sum until they decided they would add an extra 25 per cent to the share of the provinces in succession taxes. If they had not done that, Ontario would have got nothing. So they said: we shall have to give them something. So they came up with this proposal at the last moment-a 25 per cent addition to the 50 per cent of succession duties already provided for.
I do not intend to re-read the distribution, as a result of the action taken by the government, in the various provinces. But had the Prime Minister carried out the promise he made, the distribution which would have been in effect when the agreements are entered upon would have been far different and the smaller provinces would have received a greater share of the $87 million. But it had to be changed. A moment ago the Prime Minister said $87 million did not mean very much.
I intend to give the figures to show what we did during our period of office in this field of dominion-provincial relations. To begin with we increased the 10 per cent share of personal income tax and corporation taxes to 13 per cent. We were not obliged to do that, for the agreement would have been in effect for five years more. We made available to the Atlantic provinces $25 million in grants. Again, we were not obliged to do that. The agreements were still in effect, but we desired to give the maritime provinces a reasonable equalization opportunity. After all the promises which have been made during the last few months about how significant this conference was going to be, $87 million is the final amount. Let me compare it with what we did during our period of office in assisting the provinces to carry out their responsibilities. In 1956-57, the total amount of unconditional grants was $552.6 million. The total amount of conditional grants was $111 million. The total amount of payments for the benefit of provincial institutions, university grants and grants to municipalities in lieu of taxes on federal property was $25.7 million, or a grand total of $689,300,000. But I am not going to take 1956-57 as the actual figures, because there were changes made in the spring of 1957, as I recall. In 1957-58 the total amount for unconditional grants was $658.4 million, the total amount for conditional grants was $144.8 million, the total amount for payments for the benefit of provincial institutions was $34.1 million, or a grand total of $837.3 million.
In the following year the over-all total was $1,037.9 million. In the next year, 195960, the total was $1,264.2 million. The 196061 forecast was $1,326 million and for 1961-
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62 the estimate was $1,460 million. In other words, not taking into consideration the lower figures of 1956-57, during our period in office from 1957 to 1962 we increased the amount of unconditional grants to the provinces, conditional grants and payments for the benefit of provincial institutions by $623 million. That is one of the reasons why we had a deficit during that period of time. If it had not been for our granting extra assistance to the provinces and the extra payments we made throughout the entire period of time we would not have had a deficit except in one year. There was an increase, as I say, of almost $700 million over 1956-57. Compare that with what is being done here. There were great hopes, great expectations; but all we have is the distribution of a total amount, including the increase in the share of succession duties, of $87 million.
I am not going to place on the record what the amounts of the increases in the various provinces were that we brought about during our period in office, when we recognized for the first time in this country the necessity of the provinces being placed in a position where they could properly carry out and discharge their responsibilities within the constitution of Canada. I should like to know what actually took place that resulted in the failure in November to carry out the undertakings of April. What promises have been made as to what will be done next March? Certainly all that came out of this conference was the recognition by the government that no longer can it arbitrarily trample on the rights of the provinces, but must consult with them. That is all to the good. That is what we have been trying to teach this government since the session began. They have learned the lesson now. They learned it in connection with the municipal grants. They learned it in connection with the pension plan. They have learned it now in other fields.
Turning to the communique; if there ever was a document conceived with a desire to gloss over the shortcomings of the conference it is this. The communique reads:
The governments of Canada and of the ten provinces of Canada met in Ottawa-
I am leaving out the surplus words.
Their discussions were marked by a common recognition that the extent and the diversity of Canada create unusual problems in the discharge of the increasing responsibilities of government for the general benefit of all Canadians.
They did not need to meet for that. Everybody knew that.
There was a warm mutual recognition of the differing problems faced by each province and by the federal government.
The conference in this spirit agreed that government in Canada must be a co-operative federalism

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which provides complete, exhaustive and continuing examination of the problems that fall within the jurisdictions of its different governments.
That is what we have contended for. It is agreed that there should be improvement with regard to close and continuing consultation. Then it deals with shared cost programs. Why, only a few weeks ago, these were about to end. Whatever provinces wanted to end shared cost programs, they would end; but now they come out with this.
The conference therefore agreed on the particular need for a continuing review of fiscal arrangements and shared cost programs and the relation between them. It was agreed that these matters would be the subject of joint study by officials, in preparation for another session of the federal-provincial conference in the early part of the new year.
With regard to altered equalization payments the communique says:
These changes are intended to take effect in the next fiscal year. The provinces stated their views on this proposal.
They did not agree to them, as the Prime Minister admitted today. Then the communique deals with a federal lottery and proposals for legislation to permit the Canada-wide operation of agricultural marketing boards. There was general agreement in connection with pension increases for old age assistance and blindness and disability allowances. Then it ends up with a word on Indian and Eskimo affairs, on which there was general agreement on the objectives of policies designed to achieve closer association with the life of other Canadians. Finally, the communique ends with these words:
The conference ended with the expression by the heads of all delegations of their determination to work in co-operation for the strength and welfare of Canada and its provinces.
They could have written 99 per cent of the communique before they started. This conference was promoted as another example of the Pearson plan. We have had the plan drawn in a broad panorama today, but when the opportunity came to place that plan for the future of confederation before the representatives of the provinces, the government ended up with this small and, compared with the increases we gave to the provinces, insignificant increase of $87 million distributed in the manner set out by the Prime Minister.
Sir, they have learned one lesson, that they must consult, and that is to the good. Beyond that we will have to wait until March to ascertain what deal, if any, has been made. In the months of April to November Mr. Lesage was breathing brimstone, but at the meeting the ultimatums suddenly evaporated and in place of what he was going to achieve, this comparatively insignificant result is attained.

No matter what eloquent or grandiloquent words the Prime Minister has used, what was achieved was a denial of the undertakings of the Liberal party and of its pledged word in connection with equalization grants. Then they ended up with the sop on succession duties so that they would be able to say, "Well, we have taken the first step in the direction of the demands that were made on April 5 by Mr. Lesage." They call that agreement among the provinces, but the provinces could do no other than say, "That is what we are going to get. We will now return home and there will be further consultations. Possibly next April the government will have a plan to place before the provinces for consultation."


Gilles Grégoire: Mr. Chairman, I have listened with great attention to the speech of the Leader of the Opposition. It reminds me very much of the type of speech that the Prime Minister himself used to make when he was in opposition. I only regret that the Leader of the Opposition did not make the same statements a year ago, because then we might have had some results. 1 have listened to him telling us about everything they were supposed to have done, but when we look at the results, after five years of the Conservative party being in power, we see that they were very poor.
I also listened to the speech made by the Prime Minister this afternoon. Since becoming a member of this house I have always found that he can make fine speeches with nice sentences and good words, but they are only words. As he himself said, he arrived at the inauguration of the federal-provincial conference with no solution. He went there and listened, and then he claimed he produced some solutions.

I have here, Mr. Chairman, a few remarks made by the right hon. Prime Minister (Mr. Pearson) at the opening of the federal-provincial conference:
It is my hope that the well-defined policy which the federal government and the provincial governments need in matters of common interest will take shape during this conference. Such a policy will result from our discussions rather than from statements made as suggestions to give our talks a start.
And in his speech this afternoon, the Prime Minister of Canada said:
We could not come with a final answer to that problem in a conference which lasted four or five days.
But with regard to this matter, the Prime Minister might be blamed for failing to acquaint himself, before the conference, with the requests and suggestions of the provincial

governments, for not having studied them so as to come with some solution to the federal-provincial conference.
In his brief, the premier of Quebec makes on several occasions, a comparison with the priority needs of the federal government. But at this time, provincial needs have the priority.
A little further on, we find in this brief:
After the war, and for some ten years perhaps, the Canadian economy had to readjust itself to new conditions.
And looking at those comparisons between federal priority needs in wartime and provincial priority needs in times of peace, we realize that there is now a question of developing human capital in this country, which has been alluded to many times, and, today, the premier of Quebec, at least, seems to realize that there are some needs which come before national defence.
When the Prime Minister (Mr. Pearson) tells us about federal priority needs and about provincial needs, he should not forget that the war ended long ago and that there are now provincial needs which come before his own needs and before federal expenditures at this time.
Further on, the Prime Minister of Canada said that:
The discussions involved are not necessarily a matter of principle as there is agreement on the principle, but rather a matter of priority and
possibilities.
It would be a good thing to know what really are the priorities. As I said earlier, we shall see that the provinces have much more urgent needs, which must come before the needs of the federal government.
Possibilities are also mentioned. But, Mr. Chairman, it is up to the Prime Minister and his cabinet to find the financial and economic possibilities to meet the country's responsibilities.
After all, it is the Prime Minister and his government who have control over the destiny of the country. In the field of agriculture at the federal level, in the field of national defence, or in that of external relations and, above all, in the financial field, it is the Prime Minister who is responsible for the destiny of Canada. Together with his cabinet, he must see to it that Canada develops a system which will make it possible for her to rise to our potentialities, to make-as it is often put-financially possible what is physically feasible.
In considering the results of the federal-provincial conference, one hears, and one reads headlines such as this:
Ottawa has granted $87 million, out of which Quebec will pocket $42 million.
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On the face of it, it would seem that we are going to get half of these $87 million. We read:
Quebec requests and gets half of the cake.
It thus seems that the federal government has yielded to Quebec's requests. I know that it is the impression one gets from such results. The other provinces get the erroneous impression that half of the pie has gone to Quebec.
I also notice-and this, to my mind, is a failure-that this conference runs counter to the current tendency, which is that Quebec should have its own taxation rights, its sources of income, in order to spend that revenue as it pleases. Quebec will spend what it collects. That seems to be the tendency in the province of Quebec. But what does Ottawa do? Ottawa keeps on taxing as before. Ottawa taxes, gives to the provinces and the provinces do the spending, but always through Ottawa.
The province of Quebec, as well as the other provinces, still appears to be a beggar, coming to Ottawa hat in hand. Ottawa continues to control income sources, to tax, to give to Quebec money which the latter can only spend according to the stipulations laid down by the federa1 government. It is still the old system, a system which the President of the Privy Council (Mr. Lamontagne) has called co-operative federalism. But what does it mean in fact? It means a centralizing power of control. Ottawa controls revenue sources, Ottawa controls taxation and, when it pleases, Ottawa relinquishes part of it to the provinces, which, willy-nilly, must make the best of a bad bargain.
Mr. Chairman, I should like to discuss another aspect of that federal-provincial conference. Ten provinces are brought together at a round table. The ten provinces come with various requests, various needs, and when they are finally set at variance, it is a good opportunity to tell them: "You do not agree.'' That situation is invoked to turn down the requests of the ten provinces. In fact, having set them at variance and having placed them in difficult circumstances, advantage is taken of that fact to give them practically nothing.
That is no way to solve problems between Ottawa and the provinces. I think that each province should settle its problems with Ottawa. At this time, Quebec has a justified claim. The problem of the province of Quebec should be settled with that province alone, not with the nine other provinces, whose problems could be settled later on. The problems of Ontario, British Columbia and Prince Edward Island are not the same as those of the province of Quebec.

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There should not be set up, like the last time, a meeting of the ten provinces, which do not agree and which bring forth contradictory requests, in order to take advantage of the situation to turn everyone down. Under those circumstances, the negotiation system does not rest on an honest basis. The problems of each province should be settled with each one separately.
When I consider the results of this conference, I cannot help remembering the sad political history of the province of Quebec: "Grits in Quebec, Grits in Ottawa". Poor Quebecers. It is always Quebec which is the loser; it is always Quebec which is taken in. We have experienced that situation in the past: "Grits in Quebec, Grits in Ottawa". What was the result? Our province was always the loser. The Quebec people were always the losers. And the same thing is happening again.
Let us review the events which occurred before the last general election. There was the ultimatum, and this nobody can deny. The ultimatum was served on April 5, and Premier Lesage confirmed that himself on television, using the word "ultimatum".
The Minister of Justice (Mr. Chevrier) admitted, on May 27, he had heard Mr. Lesage speaking on television about an ultimatum. In fact, the premier of Quebec uttered the word "ultimatum" before millions of French Canadian televiewers, besides using it in the legislature, a fact which was confirmed later on by some ministers of the provincial cabinet, among whom were Messrs. Rene Levesque, Gerin-Lajoie and Pierre Laporte.
Mr. Gerin-Lajoie, more than anyone else, wants to have a bigger slice of taxation, or, otherwise, he will be forced to tell the school boards to increase their taxes. Indeed, school taxes have increased by $1 to $1.25 per $100 of assessment in the province of Quebec to reach $6 or $7 per $100 of assessment; taxes increase so much that Mr. Gerin-Lajoie has become public enemy number one. At first, Quebec wanted better tax sharing, but suddenly we stop hearing about an ultimatum. They speak of requests, as a basis for discussions in order to make a claim at the federal-provincial conference. They got practically nothing. They have $42 million but no taxation rights. They leave everything to Ottawa. That is exactly what has happened in the political history of the province of Quebec, when it was "Grits at Quebec, Grits at Ottawa." Once again, the province of Quebec is the loser. Arrangements were made between the two, behind the curtains. Informal meetings are held and arrangements made, but the province of Quebec is always the one taken in.

Mr. Chairman, I can say that the citizens of the province of Quebec, who still had some confidence in their premier, are quite disgusted with the results of the federal-provincial conference. Once again, they have found out that the premier of Quebec came to Ottawa to yield all along the line, as his predecessors had done in the past, before the centralizing schemings of the federal government.
The province of Quebec has always been convinced that the Liberal politicians she sent willingly to Ottawa or Quebec deserved credit for their wonderful promises, but, on the side, they always saw to it that the province of Quebec ended up the loser.
The ultimatum was given in April and will expire next April. Another federal-provincial conference will be held next March. A one-year delay was agreed to and will expire on April 6, 1964.
I hope that, at the next federal-provincial conference,	the	Prime	Minister	will	notsimply try to brush discussions aside, then adopt a certain policy and say that a few days were not enough to take decisions. I hope that, at the next federal-provincial conference,	the	Prime	Minister	will	not
arrive with high sounding phrases as he did at the beginning of this one, but rather with decisions and facts.
In my opinion, what the province of Quebec is asking for is only a beginning: 25 per cent each of corporation and personal income taxes and 100 per cent of succession duties. These are only initial requests that will go on increasing until 100 per cent of direct taxes are obtained.
In my opinion, the best brief submitted at the federal-provincial conference is still that submitted by the premier of British Columbia, Hon. Mr. Bennett, who said among other things:

British Columbia believes it is time that independent decision on all matters other than those of genuine national and international concern be restored to the provincial legislatures. We submit that much of the strain of recent years on national administrations has arisen from a failure on their part to recognize the appropriate boundaries of their sphere of operations.

The premier of British Columbia, Mr. Bennett, said a little further:

One of these rights, designated as an "exclusive power", was the use of direct taxation within the province.

Direct taxation is a right that belongs exclusively to the provinces. And I had the

good fortune to find a statement made by the federal minister of finance during the first world war. Premier Bennett quoted this statement from Sir Thomas White:

"The Income tax is peculiarly within the jurisdiction of the province and is a suitable tax for the purpose of the province-
I have placed no time limit upon this taxation measure; but I do suggest, and I should like this suggestion to be on Hansard, that after the war is over this taxation measure should be deliberately reviewed."

And here is the request submitted by the government of British Columbia, a request that we fully support:

British Columbia requests the government of Canada to vacate progressively the fields of direct taxation, so that the provinces may reassert their fiscal responsibility and rights of confederation. British Columbia urges the federal government immediately to plan and implement the necessary steps.

Here we have another province, besides Quebec, which claims the total return of direct taxation to provincial governments. The Quebec premier was also expressing these ideas. He enumerated these provinces' needs and he proved beyond doubt, at least in his brief, that the provinces' needs were far more urgent than those of the federal government.
In fact, here is what Premier Lesage stated on page 10 of his brief:
The attainment of this objective, whose results will be beneficial to the country as well as to the provinces, implies that the provincial governments' activities must be considered before some federal projects. It is from this standpoint that we can assert that provincial needs resume the priority which had been temporarily given to the central government during last war.
Here again is a hint of the excessive expenditures of the present government towards national defence at a time when our country has more urgent needs.
The Quebec premier mentioned also the debts which are forever increasing because provincial governments do not have enough income to carry out all the projects they should.
For instance, when the Liberal party was chosen in the province of Quebec, the provincial debt amounted to $305,905,000; it now amounts to $644,962,000. By this, I mean the net consolidated debt.
The Quebec premier mentioned also the needs in the education field. Is it going to be suggested that those requirements are less important than those of national defence? What about hospital insurance? And the
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development of natural resources in order to promote economic recovery? Will it be suggested that the needs of the federal government are as important as those?
Mr. Chairman, when one thinks of all the wasteful expenditures made by the federal government, in many cases, I cannot help but feel that the provinces must recover their sources of income, because to them belong the main fields of activity which can enable them to develop and, in this way, to help the country.
What about the minimum requests of the province of Quebec? This is what Mr. Lesage stated, as reported on page 46 of his brief:
We are asking once again as minimum taxation powers: 25 per cent of personal income tax, 25 per cent of corporation taxes... and 100 per cent of estate taxes.
This was the minimum, and the premier added:
They actually represent for a us a bare minimum and they surely not exceed what might result from our current work on fiscal matters.
Mr. Lesage also stated:
It is obvious that the compensation, that is, the equivalent amount the provinces would derive if the federal government were to withdraw its financial contribution to joint programs, has nothing to do with the distribution of taxes as stated in our request for 25-25-100. This is an entirely different matter.
Mr. Chairman, there is talk about restlessness and turmoil within the province of Quebec. In fact, not very long ago, the present Prime Minister stated that he did not wish to be the gravedigger of confederation, the one who would preside over the division of Canada. But if he does not want to do so, he should refrain from making bombastic speeches and try to find solutions. He should begin by solving the problems. Time for speeches is over; now action is what is needed.
The Prime Minister spoke of certain Canadian claims concerning a national flag and a national anthem. This afternoon, a government member introduced a bill respecting the adoption of a national anthem. We were then willing to give full credit to the government for such a measure and to pass the bill. It would have taken five minutes.
The Secretary of State (Mr. Pickersgill) was asking us to vote one twelfth of the main estimates, that is several hundred million dollars in a few minutes. We could have as well studied the bill concerning the adoption of a national anthem this afternoon, more especially as it was proposed by a government member. Nobody was against. But no, it was alleged that there was not unanimous consent. The Prime Minister knows quite well that his party would have had obtained political credit. But still again words and no action.
Mr. Chairman, when we reach the period devoted to private members' business, we will

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ask that this bill be given priority. And the Prime Minister should encourage the adoption of this bill, especially as it has been introduced by one of his supporters. We would then have at last some positive action. But why must we always wait until it is too late?
The present Prime Minister should remember that the province of Quebec long advocated bilingual cheques. It was put off for 12 years and then suddenly, on the eve of a general election, the former prime minister who has now become the Leader of the Opposition (Mr. Diefenbaker), decided to give in. However, we had been requesting that for so long that Quebec's reaction was: "Too little and too late".
Is the Prime Minister going to delay the solutions until he also is told that it is too little and too late?
Now is the time to act.
The province of Quebec is willing to stay within confederation and to live in harmony with the other provinces and the other great ethnic group which makes up Canada but, above everything, it wants to develop by its own means. It is as simple as that. When it is given the chance to develop itself, when it has its own sources of income and can spend its money as it sees fit, then, Mr. Speaker, will both cultures peacefully coexist in Canada.
The cabinet too often forgets that, and I feel that is the fault of the President of the Privy Council (Mr. Lamontagne) who, in a very confidential report to his cabinet colleagues, said the following:
French Canada is not proud enough to act big.
In a 200-page brief he submitted to the cabinet, the President of the Privy Council also stated this:
The people of Quebec have no time for great ideals.
This is what he said lately:
Quebec stands to lose if it separates from the rest of Canada.
As if that were the end of the world.
All that implies that the province of Quebec can neither run its own affairs nor develop on its own. But if our sources of revenue were left to us, and also our direct taxation system, if we were allowed to collect and spend ourselves instead of always seeing the federal government interfere with our business, we might succeed. So, if the province of Quebec had someone to blame, it would not be the federal government but itself.
Then harmony would be possible between the two great races that live in our country, but not otherwise.

The ultimatum that was delivered a year ago enabled everybody to procrastinate for a while and wait to see what would happen.
When the province of Quebec was content to crawl and beg, as it always did in the past, it got nothing. We were happy to see at last a man who demanded, who claimed and did not merely ask:	"Would you-please

by
any chance, if you would be kind enough-" It was a demand.
The present cabinet should not deceive itself about the consequences of this ultimatum, for I am the first one, Mr. Chairman, to tell the members of the oabinet and the Prime Minister, that if the country refuses to mend its ways and let the province of Quebec develop itself, I for one shall not hesitate to break up confederation.
Let the hon. members on the side of the present cabinet laugh if they want to. If they do, it is because they try to deceive themselves, not to see the forthcoming day of reckoning, because the province of Quebec will not accept indefinitely the system imposed on it or her present situation. What happens when it wants to have a heart-to-heart talk with the federal government? Ten provinces, 11 governments are called for a meeting, and the province of Quebec is overwhelmed.


Lucien Lamoureux: I am sorry to interrupt the hon. member, but his time has expired.


Thomas Clement (Tommy) Douglas: Mr. Chairman, this afternoon the Prime Minister gave a very excellent and interesting review of the federal-provincial conference which concluded last Friday. I think he is to be commended for reporting to the house so early on that conference, so that we might have the opportunity of discussing some of the matters arising out of the conference, and expressing an opinion with regard to them.
Federal-provincial relations are always ticklish in any federal system and have always put a great strain on confederation in Canada; and I imagine they will continue to do so for a great many years to come. I think the Prime Minister, with his excellent training in international diplomacy, is probably fitted as well as anyone to chair federal-provincial conferences, and from reports which I have had he conducted himself very ably last week. But when we come to face up to federal-provincial problems it will take a great deal more than high sounding phrases and cliches to solve these problems.
I should like to look at one or two of the things the Prime Minister said, with many of which I was in complete agreement. He said that each government must be able to

discharge its constitutional responsibility. Undoubtedly the two pillars on which confederation is built are that, on the one hand, the provinces, and on the other hand the federal government, shall each have the revenues which they require to discharge responsibilities allocated to them by the constitution. It stands to reason that they cannot discharge all the responsibilities to the full extent they want, that this will be limited by the amount of money available at both levels of government. Therefore, the constant problem of federal-provincial relations is to try to steer a fair and even course between what part of the national revenue goes to the provinces to look after their needs and what part goes to the federal government.
The provinces have faced for the last 50 years a problem which has been growing, namely that the fields of responsibility allocated to them have been enlarging at an amazing rate, particularly education, although health and welfare, have not been far behind. The provinces have not had the additional sources of revenue with which to meet those responsibilities. It is true that ever since the Rowell-Sirois report there has been some improvement. The figures which were read this evening by the Leader of the Opposition indicate that in recent years the provinces have been given additional sources of revenue, and certainly they need them, and they still need more. At the same time it has to be recognized that the federal government requires revenues to carry out its responsibilities. When speakers, such as the last, say that if the provinces were given all the direct taxes they would be able to solve their own problems, I am afraid they overlook two facts. The first is that many of the provinces could not meet their constitutional responsibilities if the direct taxes were restored to them. Second, much of the income derived from these tax fields is collected from wealth that is earned all over Canada, and the province in which the taxes are collected really has no claim upon all of that tax revenue. So that the real problem in Canada is how to allocate these direct tax fields fairly as between federal and provincial governments.
We are never going to be able to meet all the needs of the federal government and the provinces unless we can very considerably increase the total wealth production of Canada. That is one of the reasons the federal government must retain some of its fiscal powers and some of its shared programs, because it is responsible for stimulating the economy. If we had full production in Canada and no unemployment, it is estimated that we could increase our gross national product by $4 billion per annum. This would provide a much larger pie to divide up between the
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federal and provincial governments. The transfer of payments, the control of investment, the ability to raise and lower taxes wherever this will have the best effect on the economy, are some things which we feel the federal government must retain.
The Prime Minister said this afternoon that there was a need for a complete review of fiscal relations, and undoubtedly this is true. But I want to point out that we have been saying this now for years. There has not been a complete review since the Rowell-Sirois commission made its report, and we have steadily moved away from almost all the recommendations made in that report. The Prime Minister says that these fiscal relations will have to be decided, not on the basis of unilateral decisions but on the basis of consultation. With this all of us agree. Consultation is the very essence of a federal-provincial system. But if we are going to have consultation it seems to me that we must set up some machinery to make consultation effective. Just talking about consultation does not bring it about. The Prime Minister suggested that a liaison secretariat may be set up. I hope it is and that it will work. Personally I have my doubts, but it is worth trying. I think eventually it will be necessary to set up a department of federal-provincial relations in the government of Canada, with a similar minister in each province. I think we shall find it in our interests to hold an annual conference between premiers and the Prime Minister to deal with these matters. I cannot understand why the Prime Minister does not appoint the premiers members of the privy council and bring them periodically into the privy council to review some of the federal problems so that they would raise their sights and see things from a federal as well as a provincial point of view.
The Prime Minister said the provinces are giving top priority to the problem of financing education. He said, if I took his words down correctly, that the federal government appreciates the financial implications of this priority. Well, the federal government might well do so, because all the data which has been supplied indicates that the demands for education are likely to be doubled and trebled over the next few years and that the provinces and municipalities will not be able to meet the additional education costs. Trained and educated people are essential if we are to expand our economy, and the problem which faces us is this: People move from province to province in this mobile age and in this period of technology, and when a province spends money educating young Canadians it may be educating young people who are going to spend a great part of their lives in another province. For this reason alone, the federal government has a responsibility.

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I think the best way to help the provinces is not by the federal government meddling in education but by moving toward the acceptance of the plea put forward by some of the provincial premiers for 25 per cent of the income tax revenue and 25 per cent of the corporation tax revenue. I do not agree with those who went one step further and asked that the provinces be given 100 per cent of the succession duties. I think that if there is any tax which ought to be redistributed over Canada, it is the succession duty tax. These are taxes which are collected from estates accumulated from business done right across the country. When a millionaire or a multimillionaire dies in one part of Canada, the chances are that his fortune has been made from business done all the way from the Atlantic to the Pacific. But in suggesting they be given 25 per cent of the income tax revenue and 25 per cent of the corporation tax revenue, I think the provinces had a good case. It is not enough for the federal government to say it understands the financial implications of giving education a high priority. I think it must recognize now and in subsequent conferences the necessity of providing the provinces with a larger share of the income tax field if the provinces are to discharge their responsibilities in the sphere of education.
I come now to the question of equalization. The Prime Minister said that equalization makes co-operative federalism possible, and I agree. But, surely, the converse is true, and anything which departs from equalization makes co-operative federalism more difficult. The principle of equalization is based on two premises, first, that the government of Canada has some responsibility for those provinces which are less developed and less industrialized than others. Second, that direct taxes are levied on wealth which is earned all over Canada, not necessarily in the province where the wealth is being taxed and, therefore, that some redistribution of direct taxation is fair and just.
The Liberal party during the years has recognized this principle, as I said on Friday-and I do not intend, now, to cover the ground which I covered then. The Prime Minister himself, in a statement in the House of Commons on June 2, 1958 said:
Not only is the principle important but the application of that principle is even more important. On what basis are equalization payments going to be made? As far as this party is concerned we are pledged to equalization on the basis of the per capita yield of the three taxes in the wealthiest province.
The other day I quoted from the book "The Liberal Party" by the Secretary of State. I quote from it again only to draw attention

to two words. It says, at page 125, that during the national Liberal convention of 1958-
-the party pledged itself to alter the basis of equalization payments so that the revenues of all the provinces from income tax and succession duties would be brought up to the level of the province having the highest per capita revenue.
This principle was reaffirmed, according to the same author, by the national Liberal rally in 1961. The Liberal campaign literature said the same thing:
The Liberal party believes that in order to ensure a basic equality of provincial services between all parts of Canada, all provinces should receive an equal revenue per head of population from the tax fields shared between the two levels of government so that all Canadian citizens will benefit equally.
There can be no doubt that this was a pledge. It was not just a preference, not just something which could be set aside if, after listening to the various provinces expressing their opinions, some other formula could be determined. This was a pledge made by the Liberal party, by its leader and by its chief author. It was a pledge to the people of Canada that a Liberal government would introduce equalization in a specific way by ensuring to each province the equivalent of the per capita income from the three tax fields, income tax, corporation tax and succession duties, enjoyed by the wealthiest province in Canada.
It is all very well to be prepared to listen, but there is a difference between flexibility and flabbiness. Here was a fixed principle to which the Liberal party had committed itself, a promise upon which they had been elected. I must say that after listening to the Prime Minister's explanation this afternoon I am far from satisfied as to the reasons why the government discarded a commitment it had made to the people of Canada in favour of a formula which departs from that principle of equalization. It is not merely that the new formula takes the average of the two top provinces rather than the figures of the top province. It is more important than that. It promised to take the per capita income in the top province from all three fields of revenue, income tax, corporation tax, and succession duties. The government has not done that. It has introduced the factor of resource revenue. There was no good reason for doing so. There was no more reason for including resource revenue than there would have been for including revenue from sales tax or consumer taxes or anything else of that kind.
If the government wishes to include other provincial revenue, let it include revenue from all sources. It is unfair to take one which affects some provinces more than others and which brings in many factors

which are not comparable. Some of the provinces do not have much revenue from resources because they sold their resources for consideration in the past and have spent the money. Are the provinces which did not sell their resources for a limited sum, but which continue to derive revenue from them, to be discriminated against because of that? But I think the most unfortunate aspect of this new formula is that the provinces are to be allowed to retain another 25 per cent of succession duties, and this is not to be included when computing the equalization grants. If there is any tax which ought to be included in computing an equalization grant, surely it is succession duties, because succession duties are going to become more important as the years go by. Succession duties are levied usually on large fortunes which are left in one province but which have been earned all over Canada, and to leave these out seems to me to be taking a very serious step along the road away from equalization. I think the people of Canada have a right to ask themselves why the government has discarded what was a just and reasonable formula for equalization and adopted one which in many ways is a monstrosity.
The Prime Minister said this afternoon there was no ultimatum, there was no capitulation. Whether there was an ultimatum or not, whether there was capitulation or not, the fact remains that most Canadians can do simple arithmetic. They know that the premier of Quebec, along with other premiers, asked for 25 per cent of the income tax revenue and 25 per cent of the corporation tax revenue. They did not get it. They got instead a formula which is going to give the provinces in total $87.4 million and will give the province of Quebec $42.7 million or almost half the total amount paid out under this formula. That may not be capitulation, but it will look to a lot of people as being very much like a behind-the-barn deal in which one province is going to get almost half the total amount of money. When this is broken down on a per capita basis it gives the province of Quebec $7.81 per head compared with $5.60 for Prince Edward Island. Surely those two figures alone indicate how far we have moved from the principle of equalization. If we take the three far western provinces we find that the figures are $2.31 for British Columbia, $1.23 for Alberta and $2.65 for Saskatchewan.


Lester Bowles Pearson: I wonder whether my hon. friend would permit a question. Does he not agree that if the formula had been equalization up to the top province, the province of Quebec would have got $7 million of the $12 million that would have followed from that new equalization?
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Thomas Clement (Tommy) Douglas: I am going to suggest that the government would have been far better, it seems to me, to have left the equalization formula as it was, if it could not do a complete job, and to have said to the provinces: We are now prepared to start moving step by step toward giving you 25 per cent of the two income tax fields. This would have given all the provinces something. It would give it to them on a fair and equitable basis, rather than on this formula which smacks so strongly of favouritism and expediency.
I do not want to drag this out, Mr. Chairman. I want to say just a word about the Canada pension plan. I am glad of the progress which the Prime Minister has reported. I think the government ought to consider whether or not some of the reserve which will be built up in this fund could not be reinvested in the provinces on some allocation based on population. I know the plan is not supposed to be a funded plan, but since the extra $10 a month to the old age security pensioners is not to be taken out of the fund, there will be a reserve built up, and I think it would help to sell the plan to the provinces if the federal government were prepared to take some part of the reserve and reinvest it in the provinces by the purchase of provincial or municipal bonds, or some other form of investment in the provinces.
With reference to the old age assistance pension and blind and disabled persons allowances, I should like to say that I hope the government of Canada will press very hard to get the provinces to agree to make the increase retroactive to October 1. I think it is unfortunate that all of the people who come under these shared programs always get cheated out of several months of increase in pension because of the fact they have to wait until the federal and provincial governments negotiate. It should be remembered these groups come under a means test. In other words, the only reason they get any pension at all is because that they have practically no other means of subsistence. They are people who need this increase if anybody needs an increase. I certainly urge the federal government to exercise all its influence on the provinces to agree to making the increase for these three shared programs retroactive to the 1st of October.
Finally, Mr. Chairman, I simply want to say that we wish the Prime Minister and the government well as they continue these federal-provincial meetings. We hope they will be able to resolve some of the very serious problems that face the country. I want to suggest, however, in all kindliness that they will not promote co-operative federalism by

Interim Supply
following the principle that the wheel that squeals the loudest gets all the grease.


Lucien Lamoureux: Shall the resolution carry? [Translation]


Louis-Joseph Pigeon: Mr. Speaker, may I call it ten o'clock?


John Whitney Pickersgill: Mr. Chairman, since this is interim supply and with a view to getting it through I wonder whether, provided the hon. member for Hed Deer would be the last speaker, there would be a disposition to go on and complete it tonight.


Some hon. Members:: No.


An hon. Member:: We have other speakers. Mr. Pigeon: And we would like to hear the President of the Privy Council.


Lester Bowles Pearson: You will hear him Christmas eve.


Robert Norman Thompson: May I call it ten o'clock. Progress reported.



BUSINESS OF THE HOUSE

Mr. Churchill:: Mr. Speaker, I should like to ask the house leader what is the forecast of the business for the rest of the week?


John Whitney Pickersgill: Mr. Speaker, I would prefer not to make any forecast beyond tomorrow because, pursuant to the suggestion made earlier by the Prime Minister, I should like to have conversations with certain hon. gentlemen opposite with a view to planning the business for the rest of the week. Tomorrow we will go on with this urgent business of interim supply and hope to conclude it after one or two brief speeches. As soon as it has been concluded we will go on with the redistribution resolution. If this should be completed, as I fervently hope it will be, the Minister of Transport has several legislative items on the order paper we could take up, starting with the C.O.T.C.


[Stage Direction]
At ten o'clock the house adjourned, without question put.
[Stage Direction]
Tuesday, December 3, 1963