1964-09-15

EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I would ask the Secretary of State for External Affairs whether he can give the house a report on the present situation in Cyprus, particularly whether in the last day or so there have been any signs that the situation is alleviating.


Hon. Paul Martin (Secretary of Stale for External Affairs):: Mr. Speaker, the situation in Cyprus is that the government of Turkey has relented in respect of a position it had announced it was going to take with regard to the sending of supplies to the island, an act that was thought to contain elements of provocation. The decision now is that the Turkish government, in response to an appeal by the United Nations secretary general to postpone the sending of the shipment, has agreed to do so if the United Nations will provide the necessary arrangements for further food shipments to reach Kokkina. Arrangements are being made to this end.
This has considerably eased the situation. As the right hon. gentleman knows, the secretary general has circulated a report with regard to the operation of the force, and this will be considered by the security council on Thursday, I think.


John George Diefenbaker: Would the minister say whether there has been any agreement on the part of Canada to continue its force in Cyprus indefinitely, or whether a limitation has been placed on the availability of the Canadian force?


Paul Joseph James Martin: There has been no decision by the Canadian government to contribute forces indefinitely, nor has there been any decision reached as to further participation in the force. I would not want this last remark to be interpreted as meaning that, given the necessary conditions, we would not continue to live up to our obligations under the charter. The security council 20220-508
is meeting, and after that meeting has taken place I fully expect that the secretary general will get in touch with the participating governments.


REFUSAL TO PERMIT REMOVAL OF CANADIAN CITIZENS
[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is to the Secretary of State for External Affairs. Can the minister tell us whether it is true that a rescue mission has been denied landing privileges to remove 16 or more Canadians from the Stanleyville area of the Congo? If it is, what steps is the government taking to protect the safety of Canadian nationals?


Hon. Paul  Marlin@Secrelary of Stale for External Affairs: Mr. Speaker, communications with the Congo are proving very difficult. Perhaps I can say more about that tomorrow.



INDONESIA


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. I was wondering if the minister was in a position to answer two questions. The first question is, has the government as yet made up its mind as to whether it intends to encourage and assist Dr. Sukarno, at Canadian taxpayers' expense, in his attacks on Malaysia? Does he not think it is time to terminate our two-faced foreign policy in this area?


Paul Joseph James Martin: Without commenting upon what I think are the regrettable observations of my hon. friend, who has had a long experience in external affairs, may I direct his attention to the reply I gave the Leader of the Opposition on this question last week.

Hon. Gordon Churchill (Winnipeg South
Centre): May I ask the Secretary of State for External Affairs if the military survey group from Canada has now proceeded to Malaysia?

Inquiries of the Ministry


Mr.   Marlin@Essex East: I do not think they have left, but their departure is imminent.



CANADIAN FLAG


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: May I ask the Prime Minister the reason for the delay in setting up the committee to deal with the selection of a distinctive national flag for Canada. This matter was agreed to unanimously by the house last Thursday, but so far the committee has not been set up. Everybody seeems to be getting into the act and seeking to predict what the committee is going to decide. It seems to me the committee ought to be appointed as quickly as possible. I ask the Prime Minister the reason for the delay.


Right Hon. L. B. Pearson (Prime Minister):: The names selected from the government side were given to the government whip last Friday evening. The names of representatives of the smaller opposition parties were also sent to the government whip last Friday night, though in one case this was subject to confirmation on Monday morning, which confirmation was received. We have received no names from the official opposition as their representatives on the committee.


Some hon. Members:: Shame.


John George Diefenbaker: I rise on a question of privilege, Mr. Speaker. I should like to say that what the Prime Minister has said regarding the opposition is correct. We were waiting for the return of two members, and later today the names will be made available, just as soon as we can secure confirmation from those two members.


Thomas Clement (Tommy) Douglas: May I ask a supplementary question. I wonder if I could ask the Prime Minister whether the party leaders could agree to adopt a moratorium on making predictions as to what the committee is going to recommend as a flag design. It seems to me that the committee's work will be made much easier if we can persuade both the Prime Minister and the Leader of the Opposition, to take the veil of silence for the next six weeks.


Lester Bowles Pearson: I think this would be an extremely good idea. I was very disturbed, as I know my hon. friend was, when after a meeting of the party leaders the other day
[Mr. Churchill.)

at which it was agreed that the committee should be set up, this agreement was interpreted in certain quarters as a retreat by the government, that they had the government on the run, that we were giving up on our own desire for a distinctive maple leaf flag. Therefore, Mr. Speaker, I felt it was desirable for me to express my own view that we should have such a flag.
Both sides having stated their position on this matter, and the committee being set up I hope tomorrow, with no instructions having been given to members of that committee by any of the party leaders-I hope that is the case with my right hon. friend, because it is certainly the case on this side-perhaps the committee could be allowed to do its work in peace and quiet.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Real Caouelte (Villeneuve):: Mr. Speaker, I should like to put a question to the Minister of Finance.
Is it true that the Canadian government has accepted, as payment for financing the development of the Columbia river, treasury notes or other securities from the United States government in lieu of American dollars and that those funds were not deposited to the account of the Receiver General of Canada?


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, the Canadian government is investing these funds to the best advantage, and I think it is a satisfactory way of handling this transaction.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Hon. Leon Balcer (Three Rivers):: I should like to direct a question to the Prime Minister. Does the Prime Minister intend to take steps to set up completely new machinery to deal with the protection of our water resources, the wastage and mishandling of which has reached the proportions of a national disaster, as revealed in a very informative study which appeared in the Montreal Gazette on Saturday?


Lester Bowles Pearson: The matter referred to in the article in question is under consideration, and perhaps the minister of northern affairs will have a statement to make about it in the near future.



PRIVILEGE


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I rise on a question of privilege affecting all hon. members of the house, and a most important question of privilege of national and international consequence, which is evident from a page I have just received taken from the Spokesman-Review of Spokane of Friday, September 11 in which there appeared an editorial entitled "Canada's Pearson Campaigns for L. B. J.".
It goes on to say:
-Mr. Johnson's long lasso has roped him into domestic political affairs in the United Statesand calls it a wholly unnecessary expedition at this time. It adds:
It is unfortunate that Prime Minister Pearson -who has plenty of domestic troubles of his own -is now being dragged into the American political campaignand says it is:
-a low-level political blow at. ..many northwest citizensand so on. I mention that editorial to indicate the international as well as the national significance of my point of privilege. The question concerns the apparent misinterpretation by ministers of the crown of a resolution of this house.
As this misinterpretation may have misleading consequences in our treaty relations with the United States of America and our domestic relations with the province of British Columbia, I believe this house must clarify the constitutional meaning and limits of that resolution to the end that those members of this house who, as advisers to His Excellency the Governor General, must aid and assist His Excellency in implementing that resolution, do not construe the resolution as a licence to arrogate and usurp to themselves, without counselling with His Excellency, the statutory prerogative of his excellency the governor general in council in matters of disallowance.
Such misinterpretation is implicit in the announcement by the Prime Minister of his intended participation in an international ceremony to celebrate the purported coming into force of the treaty.
20220-508J
Question of Privilege
1.	The resolution of the house approving the ratification of the Columbia treaty, so-called, with the protocol and exchange of notes, as recorded in the Journals of the house for June 5, 1964, is subject to section 90 of the B.N.A. Act with respect to the disallowance of a provincial statute.
2.	Article XIV (1) of the treaty requires
that Canada designate a Canadian entity for the purpose of the treaty. The note of January 22,	1964, with the attachment thereto,
provides in article C that Canada shall designate the British Columbia hydro and power authority as the Canadian entity for the purpose of article XIV (1). The designation of that authority is therefore incorporated by reference in the treaty, and, as so incorporated, was approved in the resolution of this house.
3.	The British Columbia hydro and power authority was established under the provisions of an act, cited as the British Columbia hydro and power authority act, 1964, passed by the legislature of British Columbia on or about March 10, 1964.
4.	Some time after March 10, 1964 a copy of the act was forwarded to the Governor General of Canada by the lieutenant governor of British Columbia.
5.	Under section 90 of the B.N.A. Act, the governor in council may disallow the act within one year of the receipt of the act by the Governor General.
6.	On March 16, 1960 Mr. Speaker ruled that the question of disallowance is a power which has been entrusted to the exectuive and not to parliament. Therefore it follows from this Speaker's decision that the approval of the house of June 5, 1964 to the treaty, protocol and notes, and in particular to article XIV (1) as incorporating by reference the designation of the British Columbia hydro and power authority in article C of the attachment to the note of January 22, 1964, was and is subject to the exercise or nonexercise by the executive of its power to annul the provincial statute that creates the British Columbia hydro and power authority. In other words-


Some hon. Members:: Hear, hear.


Herbert Wilfred Herridge: I am glad I am getting applause, because I worked very hard on this question of privilege.
In other words, unless the governor in council sooner disallows the British Columbia statute, then the approval of the house to the treaty is in effect in escrow for one

Question of Privilege
year after the receipt by the Governor General of a copy of the British Columbia act. Putting the matter another way, under section 90 of the British North America Act the executive may disallow the British Columbia act within one year, but there is no positive way by which the governor in council can indicate that it, or a successor governor in council, will not disallow the act. The governor in council can only approve the act by letting one year elapse without disallowing the act.
The matter is put neatly in the question of the member for Vancouver East and the reply of Mr. Speaker thereto in the course of the Speaker's decision already cited, as it appears in Hansard for March 16, 1960, volume II at page 2121:


Mr. Winch:: That is the very point. Do I understand from what you have just said that the House of Commons cannot deal with this matter until the last minute of the period of authority of the cabinet to deal with the matter; and, if so, that we cannot even raise it then because by that time the time has expired and it is a fait accompli? Is that the case?


Mr. Speaker:: That is precisely the situation-
Applying the principle of that ruling to this case, the ratification by this house of the treaty is not effective until the last minute of authority of the governor in council to deal with the matter. Under our constitution the ratification by this house is either valid or invalid depending upon:
(a)	The elapse of one year from some time in the spring of 1964 without the governor in council disallowing the British Columbia hydro and power authority act, 1964; or
(b)	the disallowance of the act by the governor in council within that year with the consequential nullification of the ratification by this house.
I therefore move, seconded by the hon. member for Nanaimo-Cowiehan-The Islands (Mr. Cameron):
That the resolution of this house of the 5th June 1964 concerning the approval of the ratification of the Columbia river treaty, so called, in no way derogates from or impinges upon the powers and authorities conferred upon and entrusted to the governor general in council under section 90 of the British North America Act relating to the disallowance of an act entitled the British Columbia hydro and power authority act, 1964 as passed by the legislature of the province of British Columbia.
And therefore, to quieten doubts that have arisen or may arise as to the interpretation and effect of the said resolution, be it recorded in the Journal of this house that this house declares that the said resolution is subject to and dependant upon the powers and authorities so conferred upon and entrusted to his excellency the governor general in council.
[Mr. Herridge.l


Mr. Speaker:: I have to decide whether or not there is a question of privilege here, and after listening very attentively to the remarks, the long preamble, of the hon. member I have not the slightest hesitation in reaching the conclusion that inasmuch as he is asking for a legal opinion from the Chair, the Chair has no authority to give that legal opinion. Therefore I must conclude that the question of privilege does not arise.


Herbert Wilfred Herridge: With respect to your reply to my question of privilege, Mr. Speaker, with all due deference do you not give a legal opinion when you rule, while a member is speaking, whether a matter is within the jurisdiction of this parliament or that of a provincial legislature?


Mr. Speaker:: The hon. member should not misinterpret my words. We discussed this matter rather extensively from 12 till 1 o'clock so neither of us is exactly taken by surprise. I still hold to the ruling I have given that there is no question of privilege.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberi):: have a question for the Minister of Finance relating to student loans, about which I have given him some notice. Have the New Brunswick appointees any authority to declare students at New Brunswick teachers college ineligible, although that institution is included among those listed in the brochure which was made available?


Walter Lockhart Gordon: Mr. Speaker, the province of New Brunswick has specified that the teachers college at Fredericton should be one of the institutions whose students would be entitled to receive loans under the Canada Student Loans Act.


Thomas Miller Bell: Mr. Speaker, will the minister investigate this matter if I give him the information? The story is that the institution has been declared ineligible and, further, it has been stated that in any event there is not enough money to go around.


Walter Lockhart Gordon: I am grateful to my hon.
friend for having given me notice of this question, Mr. Speaker. I rather expect that the advice this particular student was given had to do with the province's own student

loans fund. However, 1 will be very pleased to look into it and see whether I can track this matter down.


Thomas Miller Bell: A supplementary question in that connection, Mr. Speaker. Is it a sufficient answer to say they should make application for the provincial grant, and that the other is not possible for them? Would this answer it?


Walter Lockhart Gordon: Not at all, Mr. Speaker. I think the official of New Brunswick who wrote the letter was probably saying this particular college did not qualify under the provincial regulations or the provincial act. However it would qualify under the Canada Student Loans Act.



STUDENT LOANS


[Stage Direction]
On the orders of the day:
Mr. R. R. Southam (Moose Mountain):: Mr. Speaker, I would like to ask the minister whether he has had time to look into the question I put to him yesterday regarding the letter he has received from Mr. Charbonneau of the Saskatchewan credit union league, pointing out the fact that the Saskatchewan credit unions had not been able to approve student loans.


Walter Lockhart Gordon: Mr. Speaker, I had hoped to be able to answer that question this afternoon. I did look into it immediately after I left the chamber yesterday, but have not yet found the letter in question. I hope to be able to reply tomorrow.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister.
Since the strike at the newspaper La Presse of Montreal seems to revolve around the freedom of the press in general, does this government intend to see to it that the strike is not settled to the detriment of one of the most important freedoms, the freedom of the press? [Text]


Lester Bowles Pearson: Mr. Speaker, I do not think I can answer that question on the orders of the day, except to say that I am convinced that no decision would be reached that would in any way infringe upon the legitimate freedom of the press.
Inquiries of the Ministry [Translation]


Gilles Grégoire: A supplementary question, Mr. Speaker.
If the settlement of this strike were to affect the freedom of the press, then would the government consider stepping in so that this fundamental right might be protected?



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I would ask the Minister of Industry whether the city of Vancouver has yet submitted a plan regarding the Kitsilano property until recently occupied by the R.C.A.F. If so, what is the nature of the submission in this regard and what decision has the government made respecting this matter? In particular, is it going to prefer the request of the city of Vancouver to the demand of the C.B.C. made earlier, I think it was in June, by the president of the C.B.C.?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, hon. members will recall that it was 59 days ago that the city of Vancouver asked for a delay of 60 days in which to develop and forward to the federal government an alternative proposal for the Kitsilano project. Tomorrow will be the sixtieth day. In answer to the balance of the right hon. gentleman's question I would say that we have not yet received any proposal from the city of Vancouver.


Thomas Clement (Tommy) Douglas: no proposal is received, is it the minister's intention to get in touch with the city of Vancouver to ascertain the reason for the delay in order that there may be an extension of the time, if they desire such an extension?


Charles Mills (Bud) Drury: My colleague the Postmaster General during the interval has been indicating to the city of Vancouver the importance of coming to a rapid conclusion in this matter. I think I would be endeavouring to answer a hypothetical question by suggesting what might happen in the event that the city of Vancouver made no proposal.

Inquiries of the Ministry AGRICULTURE



TURKEYS-INQUIRY AS TO STEPS TO MAINTAIN PRICES

[Stage Direction]
On the orders of the day:
Mr. Reynold Rapp (Humboldt-Melfort-Tis-dale):: Mr. Speaker, I have a question to ask the Minister of Agriculture in reference to a question I asked him on September 10 having to do with turkey prices. At that time he said he would discuss this problem with the turkey producers on Monday, that is to say yesterday, in Winnipeg and would report back to the house. Has he anything to report at this time?


Hon. Harry W. Hays (Minister of Agriculture):: Mr. Speaker, I met with the executive of the turkey federation and attended the annual meeting, and spent considerable time with them. They are putting forward proposals that we are going to consider, and after that time I will report back to the house.



WORLD FAIR


[Stage Direction]
On the orders of the day:
Mr. Remi Paul (Berihier-Maskinonge-Dela-naudiere):: Mr. Speaker, I wanted to put a question to the Minister of Trade and Commerce but, in his absence, I shall put it to the Prime Minister. Does the government intend to ask for the resignation of Mr. Robert Shaw as assistant commissioner of the 1967 world fair, following the severe admonition given to him by Judge Marcel Gaboury in the judgment he delivered recently in an action for fraud against the Foundation Company of Canada Limited, whose executive vice president was the same Robert Shaw?


Lester Bowles Pearson: Mr. Speaker, I will take notice of that question.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, I have a question for the Minister of Transport. I have been trying since March 23 of this year, without success, to obtain information from the minister and
[Mr. Drury.)
the government as to what effect the proposed new railway car ferry service will have on the employment of stevedores as between Port aux Basques and North Sydney.
Now that yesterday the minister sounded the death knell for the stevedores at North Sydney in his written reply to the hon. member for Danforth, may I ask him when I will receive a reply to question No. 1,811 on the order paper, which is actually a series of questions on this same subject but in considerably more detail. I am sure, Mr. Speaker, we all understand the full collaboration that exists between the minister and the hon. member of the N.D.P., as indicated by the fact that he answered that question.


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, that is a rather offensive observation with which the hon. gentleman closed his remarks, which I think I should protest strongly as not being in order. I hope very much to have the additional detail for which the hon. gentleman asked, and which of course made it necessary to take longer to answer his question, available tomorrow.


Mr. Reid Scott (Danforth):: Mr. Speaker, I wish to speak on a question of privilege. The gratuitous observation of the hon. gentleman is really not worthy of him. I want to make it clear that the question was based on a responsibility to that area and not because of this stupid statement about collaboration between my party and the Liberal party.


Robert Muir: I have a supplementary question. Of course I accept the statement of the hon. gentleman, who is a very good friend of mine.


An hon. Member:: He was.


Robert Muir: May I ask the minister, in view of his reply yesterday to the hon. member for Danforth, and in view of the closing of the Point Edward naval base and other cutbacks, just how many economic blows does he think North Sydney and the surrounding areas can stand before we see another Elliot Lake or Springhill?


Some hon. Members:: Order.


Mr. Speaker:: That question is not in order. [Later:]


Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question for the Prime Minister. Does the Prime Minister consider it is proper that a minister of the crown,

concerning matters affecting the economy of two provinces, should align himself behind one province as against the other?


Lester Bowles Pearson: A very hypothetical question, Mr. Speaker.


Malcolm MacInnis: Mr. Speaker, the Prime Minister has referred to this as a hypothetical question. It is anything but, because this is exactly what the Minister of Transport did in North Sydney when he said when it concerned a problem between Nova Scotia and Newfoundland, he intended to favour Newfoundland. There is nothing hypothetical there, and I would very much appreciate an answer from the Prime Minister.


John Whitney Pickersgill: Mr. Speaker, perhaps
before the Prime Minister is troubled to answer that question I may say I never made any such statement at any time in any serious sense at all.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I listened to the hon. gentleman making his imputations, which were meant to be harmful and malicious, and I suggest, sir, I should be allowed to reply to them without the kind of interruptions which are so characteristic of the hon. member. I did say in the course of an after dinner speech to the North Sydney board of trade, where I had a great deal of hospitality of the kind that is characteristic of North Sydney, and in the presence of the hon. member for Cape Breton North and Victoria, that of course when I had to make a choice between Nova Scotia and Newfoundland I would choose Newfoundland, and I think everybody who heard that understood it in precisely the sense in which it was made.
Further, I think my record and the record of this government in doing things for Cape Breton in the last year-just to mention the heavy water plant, the development of the airport, the establishment of the coastguard college and so on-is ample proof that there is no thought of discriminating against that important area.


Some hon. Members:: Hear, hear.


Malcolm MacInnis: As a further supplementary to the Prime Minister, now that it has been quite clearly indicated by the Minister of Transport that my question was not hypothetical and that the minister did make such a statement as I referred to, does the Prime Minister not think it is time that the ministers when-
Inquiries of the Ministry


Mr. Teillel:: Oh, sit down.


Malcolm MacInnis: Mr. Speaker, I think in all fairness that remark made by the Minister of Veterans Affairs should not be permitted. After all, I have not been addressing my question to him, and if the Minister of Veterans Affairs, who continually remains in his seat-


Mr. Speaker:: Order, please. It seems to me we are making a mountain out of a molehill.


Malcolm MacInnis: Mr. Speaker, I don't consider it is making a mountain out of a molehill when I have to stand here like this. After all, if the Liberal ministers-


Mr. Speaker:: Order. The hon. gentleman has heard a long explanation from the Minister of Transport, and surely he is satisfied.


Malcolm MacInnis: I am certainly not satisfied, because the minister has admitted in this house making the statement which the Prime Minister referred to as hypothetical.


Mr. Speaker:: Order. Words must be given their ordinary meaning and it was perfectly clear to me that the Minister of Transport explained in detail what was implied in his off the cuff remark.


Malcolm MacInnis: Mr. Speaker, if you will permit me, what I am trying to get across to the Prime Minister, to the Minister of Transport, and to the arrogant benches on that side, is that a statement made by the Minister of Transport on any issue should be considered a serious one, and if he now says he said it jokingly I would point out to him that his statement in North Sydney was taken quite seriously by the people of that area.


Some hon. Members:: Question.


Mr. Speaker:: Order, please. Surely we have spent enough time on this important issue.


Malcolm MacInnis: Mr. Speaker-


Mr. Speaker:: I am sorry, but I do not propose to recognize the hon. member for Cape Breton South if he persists along this line, because it is enticing the house into an argument which is certainly not needed at this time.


Malcolm MacInnis: On a question of privilege. My question of privilege refers to what the Prime Minister has called a hypothetical question. This was categorically denied by the Minister of Transport when he attempted to make that statement-


Mr. Speaker:: Order, please.

Inquiries of the Ministry


Malcolm MacInnis: I would ask the Prime Minister-


Mr. Speaker:: Order. There is no question of privilege here. Surely the hon. member can see that.


Robert Muir: I have a supplementary question to ask, but first I should like to say that the minister did make that statement at North Sydney and it is correct, what he did say at that time. Has he now made a decision in favour of Newfoundland to the detriment of the port of North Sydney, one which will put everybody out of work?


John Whitney Pickersgill: No, I do not think any decision has been made to the detriment of any port. There was a necessary decision to be made in the interests of carrying out the terms of union with Newfoundland to provide a ferry service to Newfoundland. As my answer yesterday clearly indicated, every consideration was given to a matter which was not easy to decide, because it was obvious that if the ship was unloaded on one side of the strait the work would be there and not on the other side, and nothing could change that fact. The officials of the Department of Transport and, ultimately, the minister, had to decide what, in the public interest, was the wise decision to make, and that decision was made in the light of technical considerations which I tried to set out as plainly as I could in the answer I gave yesterday.


Robert Muir: So the stevedores at the port of North Sydney are to be the sacrificial lambs.


John Whitney Pickersgill: Would the hon. gentleman prefer to sacrifice those at Port aux Basques?


Malcolm MacInnis: I have a further supplementary question for the Minister of Transport. This is in line with a question I put to him last spring. Can the hon. gentleman now indicate to the house whether the gauge at the marshalling yards at Port aux Basques will be standardized?


John Whitney Pickersgill: That is a technical question which I cannot answer offhand.


Robert Muir: I put the same question to the minister some months ago and he said I could not make that deduction. That is what he said when I asked him if they would be standardized.


Malcolm MacInnis: A further supplementary-


Mr. Speaker:: Order. We have spent nearly ten minutes on this important subject. Surely we have exhausted it.


Robert Muir: And we are going to have three or four hundred unemployed.


Malcolm MacInnis: Unless they standardize the rails at Port aux Basques how are they going to unload the cargo from this particular ferry?


Mr. Speaker:: Would the hon. member put that question on the order paper?


Robert Muir: There is no point in putting anything on the order paper, because we cannot get answers. I have had a question on the order paper for weeks.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Industry, and is based on the criticism of his department's achievements at the conference of mayors and municipalities. Will the minister assure us that in future before areas are designated he will improve the consultation procedures as among the department, the local authorities and the provinces; and will he also assure the house that he will take immediate steps in area industrial development to avoid duplication of services that already exists in the provinces?


Charles Mills (Bud) Drury: Mr. Speaker, I saw the newspaper report which no doubt led the hon. member to make this observation. Yesterday I attended throughout the meeting of mayors of municipalities, and the sole reference to designated areas in the presentation of their brief by the mayors of municipalities was limited to an invitation to the area development agency to avail themselves of the advice of the director, Mr. Mooney.
This was an invitation which I gladly accepted yesterday, and I did in fact instruct the area development agency to make use of the services of Mr. Mooney in respect of any ideas he may have in so far as designated areas are concerned. It has been a preoccupation of the officials of the area development agency to avoid duplication or, indeed, any kind of conflict with the provincial area or

regional development programs. This has been our policy and will continue to be so.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs, arising out of a statement made by the Prime Minister yesterday to the Atlantic treaty association. Perhaps I may be permitted to quote one sentence from that statement, as follows:
If we exposed them-
He was speaking of communist China.
If we exposed them more to the views of the rest of the world, we might some day expect a more realistic policy from them. The present isolation of China encourages recurring crises.
I should like to ask the secretary of state whether this is now the official view of the government, and perhaps whether this is an indication of some action that Canada intends to initiate or support at the coming session of the United Nations.


Paul Joseph James Martin: Mr. Speaker, the statement attributed to the Prime Minister yesterday was, of course, a statement which represents government policy, and is in keeping with the statement of government policy announced in this house on May 22. I am sure it commends itself to my hon. friend.


Horace Andrew (Bud) Olson: Mr. Speaker, I have a supplementary question. The second part of my question was, does Canada intend to initiate or support some action to bring China into the councils of the world at this session of the United Nations?


Paul Joseph James Martin: Mr. Speaker, as my hon. friend knows, of course Canada has now established growing contacts and commercial contacts with communist China. We now have an exchange of newspapermen. As to the course to be taken at the general assembly, I think my hon. friend will appreciate, in view of the importance of this question, that he might wish to examine in greater detail the statement which was made on May 22 in this house.


John George Diefenbaker: Mr. Speaker, I should like to ask the minister by way of a supplementary question, and without entering into an argument
Inquiries of the Ministry on the matter of communist China, whether he can give this house the assurance that before any statement of policy is made by the government in this connection, this house will have a day set aside in order to obtain the views generally of all members as of this time, so the government will fully recognize the variety of views that are held in this house in that connection.


Paul Joseph James Martin: Mr. Speaker, foreign policy, of course, must be achieved initially through executive acts of government, under our parliamentary system. Government policy in this regard is always subject to the scrutiny of parliament. I would hope there will be the fullest opportunity for a discussion of this matter before any action is taken, but the government must always observe its responsibilities in connection with these matters in the light of situations that could develop.


John George Diefenbaker: Mr. Speaker, in that
volume of words there is still no answer to this question. Recognizing the executive function of government and its responsibility for external affairs, before a decision is made will this house be allowed a day's debate on this question, so important not only to the international world as such but to Canada as well? That was my question.


Paul Joseph James Martin: Mr. Speaker, this is a matter of great importance, and I am sure my right hon. friend would not want to be projecting questions to elicit ill-considered answers.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: If he did I would be very surprised. I would hope there would be an opportunity to discuss matters of this sort before any action was taken. I am not implying by that remark that there is any immediate action in mind. In the statement I made on May 22 there was a careful analysis of the situation that could develop at the next general assembly, and I suggest to my right hon. friend that he should read that statement and possibly use it as the basis of a question tomorrow.


John George Diefenbaker: Mr. Speaker, may I say to my hon. friend that reading it would be to have a source book for questions for the next few weeks absolutely dissimilar one from the other.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. In view of the minister's statement in Tokyo that he hoped the government of the United

Inquiries of the Ministry States would be agreeable to some recognition of mainland China, is he or are any of the officials of his department in touch with the United States authorities to ascertain their views regarding either recognition of communist China by Canada or the seating of mainland China in the United Nations?


Paul Joseph James Martin: Mr. Speaker, as I indicated last week, I made no such statement as was attributed to me. The statement was said to have been one made at a private meeting. But I did say to my hon. friend that in the formulation of foreign policy the government, this government or any other government, would take into consideration the position of friendly countries. That is still the position of the government of Canada.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. I was not asking the minister a hypothetical question as to what they would do. I asked the minister if actual discussions are or have been going on relative to this subject.


Paul Joseph James Martin: Mr. Speaker, discussions on these matters are always taking place between interested governments. I had some discussion only the other day about this matter with a representative of a friendly country, and I expect to have one later today. This is part of the job of the external affairs minister.


John George Diefenbaker: Elucidation is part of the job, too.


Herbert Wilfred Herridge: should like to address a supplementary question to the Secretary of State for External Affairs. Would he inform the house whether the reports he receives from our representative on the truce commission in South Viet Nam are identical or similar to those he receives from the United States state department with respect to the interpretation of the development of events in South Viet Nam?


Paul Joseph James Martin: Mr. Speaker, we have naturally had reactions from interested governments on that delicate situation. When we were in Tokyo we asked the representative of Canada on the international control commission to come to Tokyo to discuss the situation with us. These sources of information are very valuable to us in making necessary assessments.


Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, I should like to follow up one series

of questions asked of the Secretary of State for External Affairs. With regard to the discussions that are being held with representatives of friendly countries, would one of those representatives be the senior senator from Arkansas, Senator Fulbright, whose speech in the Senate on April 15 has been widely disseminated?


Paul Joseph James Martin: Senator Fulbright is chairman of the foreign relations committee. He is not a member of the government of the United States. However, I happen to know Senator Fulbright and I would not be averse to talking to him.


Mr. Churchill:: What is his opinion?


Horace Andrew (Bud) Olson: A supplementary question, Mr. Speaker. Could the minister tell the house whether any member nation of the United Nations has stated that it intends to move a motion or to initiate some action for the seating of red China at the next session of the general assembly?


Paul Joseph James Martin: Mr. Speaker, my hon. friend knows that negotiations of this kind are confidential. It would be improper for me to say what the representative of another country indicated to me in a private conversation, but these conversations are taking place. Much will depend on the interpretation that is given this problem as to whether it is an important question within the meaning of the charter of the United Nations or whether it is a question that requires only a simple majority vote. I suggest quite seriously to my hon. friend that he look again at the detailed statement on this subject which was made in the month of May. [Later:]


Gordon Minto Churchill: Mr. Speaker, now that I have reread his speech of May 22 I would like to ask the Secretary of State for External Affairs whether his statement then holds true today as a declaration of Canada's policy with regard to China. His statement then read as follows:
We are watching the situation closely and Canadian policy will be predicated on a number of factors.


Mr.   Marlin@Essex East: Mr. Speaker, if my hon. friend would read the analysis of the factors that followed in that speech perhaps he could add an interesting part to his question.

Inquiries of the Ministry



NATIONAL CAPITAL COMMISSION


[Stage Direction]
On the orders of the day:
Hon. Paul Martineau (Pontiac-Temiscamingue):: Mr. Speaker, I wish to direct a question to the Minister of Public Works.
Can the minister tell us if the national capital commission has changed its policy with regard to the transfer of buildings to the city of Ottawa, because it now charges a $100 fee for what it used to do for $1.?


Hon. J. P. Deschaielels (Minister of Public Works):: Mr. Speaker, I will inquire about this matter because I am not in a position now to answer that question.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Finance. In view of his statement in the house on March 20 of this year that the government's legislation respecting the Canada development corporation would be, to quote his exact words, "brought forward at the appropriate time", can he say whether the appropriate time has come and, if not, what has happened to this legislation?


Walter Lockhart Gordon: Mr. Speaker, I will be glad to do that at the appropriate time.



INQUIRY AS TO STOCKPILING OF COBALT ORE

[Stage Direction]
On the orders of the day:
Mr. Arnold Peters (Timiskaming):: I should like to direct a question to the Minister of Mines and Technical Surveys and ask him whether the government has made a final decision as to the amount and price of cobalt ore to be stockpiled this year.


Mr. Speaker:: Surely this is a question for the order paper.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a question for the Minister
of Northern Affairs and National Resources. In view of the demand for the minister's resignation that was made at the regular session of the Banff advisory council last evening, could the minister indicate to the house the reason for such action on the part of this responsible body?
Hon. Arihur Laing (Minister of Northern
Affairs and National Resources): Mr. Speaker,
I will first of all disappoint the hon. member by telling him that I have no intention of resigning. This is an advisory body. In the past we have thought that in these unorganized areas within our parks such bodies were good things. After the decision taken last evening I am going to be more cautious about the advice I accept from that particular body.
Two of the reasons given for the action were that we were running contrary to the Oberlander report, and were running contrary to recommendations of the land use code. On checking into the matter I find that in the allocation of this particular property for a motel we are following the Oberlander report completely, and in addition we are following the advice of the body involved in respect of the zoning plans. So I cannot understand how they can be so ill informed, and I shall be very careful about taking any advice from them in the future.


Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. Could the minister indicate whether the development on the Bow river site is in conformity with the recommendations of the Oberlander report with respect to proper land use? Further, could he indicate whether the opinion of the Banff advisory council was not confirmed by the interim development committee?


Mr. Laing:: Mr. Speaker, I want to reply by stating that the Bowview lodge location is not presently zoned for motels, but the location is recommended zoned for motel use in the Oberlander report and the new land use code proposes this location should be zoned for motel use.


Walter Gilbert Dinsdale: Mr. Speaker, could the minister intimate whether the viewpoint of the Banff advisory council was substantiated by the viewpoint of the interim development committee?


Arthur Laing: No, Mr. Speaker, but the recommendation of the interim development committee was not accepted.
8022	HOUSE OF
Inquiries of the Ministry



DOMINION-PROVINCIAL RELATIONS ANNEXATION BY BRITISH COLUMBIA OF YUKON AND NORTHWEST TERRITORIES

[Stage Direction]
On the orders of the day:
Mr. Barry Maiher (New Westminster):: have a question I should like to direct to either the Prime Minister or the minister of northern affairs. I wonder if they are aware of a statement made, I believe yesterday, by Premier Bennett of British Columbia to the effect that British Columbia is now ready to annex the Yukon and Northwest Territories up to the 120th meridian, thus making British Columbia Canada's largest province; and in return he offers the residents of the annexed areas $300 million in road and railway links. If they are aware of this offer by the premier of British Columbia, do they think those concerned should accept?


Arthur Laing: Mr. Speaker, I do not have the statement of the premier of British Columbia. He did not take me into his confidence before making this statement. However, I understand that the convention was treated to high drama at the time. I think there are 23 delegates present, of whom eight came from Alaska.
This is not a new suggestion by any means. My hon. friend may remember that the late great Duff Pattullo of British Columbia once made this suggestion in respect of the Yukon. Premier Bennett appears to be more generous in his territorial ambitions. I do not know the reaction of the people of the Yukon and Northwest Territories.
He is dealing, of course, substantially with the provision of transportation and communication in that area. We are very aware of that, as is indicated by our interest in highways. I should like also to pay tribute to the Canadian National Railways people who for some time have been making a very thorough study of the transportation requirements to develop the resources of that general area as they become available.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: I wish to direct a question to the Minister of Veterans Affairs. Is it the intention of the minister to place before the house


in the near future any legislation implementing the recommendations of the standing committee on veterans affairs, as adopted by this house last session?


Roger-Joseph Teillet: There will certainly be legislation coming forward, we hope before the end of this session. I will have a report later.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I should like to put a question to the Minister of Justice.
Has the minister consulted his cabinet colleagues or officials of his department concerning the proceedings which should be taken following Mr. Hal Banks' failure to appear in court yesterday, the date on which his bail expired?
Does the minister or his department intend to take steps besides what has already been done to explain to the Canadian people Mr. Banks' refusal to abide by Canadian law and to ensure the respect of the law in Canada?


Hon. Guy Favreau (Minisfer of Justice):: Mr. Speaker, I answered yesterday that, as far as the proceedings to be brought before the court of appeal were concerned, counsel for the department had been instructed to ask that, should Mr. Hal Banks not appear in court today after a 24-hour postponement, his appeal be dismissed or rejected. I also said that we had instructed our counsel that, in such a case, they were to start proceedings immediately to have the bond forfeited. Those were their instructions.
I tried to get a report on what was going on in court this morning, but counsel are still held up there. Tomorrow noon, however, I shall be in a position to report, not on whether or not Mr. Banks did appear, but in regard to the proceedings then in progress.


Gilles Grégoire: Mr. Speaker, I should like to put a supplementary question.
Could the Minister of Justice tell us whether he asked experts of his department to examine the report of the Norris commission to determine whether it would not be possible to lay new charges against Hal Banks which would make him liable to extradition and would compel him to serve his sentence.


Guy Favreau: Mr. Speaker, it is clear that a thorough study of this report was made before lodging proceedings against Hal Banks. However, I can promise my hon. friend that I will take into account the comments implied in his question.



LEGISLATION RESPECTING DISSEMINATION OF &quot;HATE&quot; LITERATURE

[Stage Direction]
On the orders of the day:
Reid Scott: I should like to direct a question to the Minister of Justice. It arises out of newspaper reports concerning a fresh outbreak of anti-semitic literature in Toronto and Hamilton, one of which even goes so far as to claim that the Beatles are a Jewish plot to corrupt the world. Since most of this material is far more scurrilous, and in view of the need for some action, I wanted to ask the minister what progress he is making with the attorneys general of the provinces and their advice on amendments to the Criminal Code to deal with the dissemination of this type of material.


Guy Favreau: I do not feel it my duty to make any statement on my personal reaction to the performance of the Beatles, or to draw any inferences from comparisons with other people. However, as far as the last part of the question is concerned, I must remind my hon. friend that the answers I gave to these questions in the past have not been related to a conference with the attorneys general of the various provinces. I said that the attorney general of Ontario had undertaken to make a test case if the Royal Canadian Mounted Police were in a position to furnish evidence which would satisfy him that a complaint might be laid. We have not, as yet, been in a position to satisfy the attorney general that any such evidence was available, sufficient to establish at least a plausible identification of an accused with the hate literature. I repeat, there has been no understanding with respect to the holding of a meeting with the attorneys general, but the suggestion is one which I am ready to consider.


Reid Scott: As a supplementary question, in view of the fact that part of the problem may be that the existing legislation is inadequate to permit successful prosecutions, would the Minister of Justice re-examine the Criminal Code to ascertain whether certain amendments to it would facilitate prosecutions respecting this type of material?
Inquiries of the Ministry


Guy Favreau: With respect to the last question, Mr. Speaker, I must repeat that this is precisely a study which is presently being continued very actively, and I am also considering other ways and means to achieve the purpose sought, in a manner that would be as efficient and rapid as possible.


Mr. William Dean Howe (Hamilton South):: As a supplementary question, Mr. Speaker, is the minister aware of the specific distribution of hate literature in the Hamilton area recently? I have received a letter or sample of the literature distributed in the Hamilton area, and I ask whether anything specific is being done to combat this.


Guy Favreau: Mr. Speaker, the right hon. Leader of the Opposition put a question to me which related to that particular literature which, if I am not mistaken, consisted of a blue card with the ill spelling "This is the end". This has been referred to my officers to peruse in their study, in conjunction with the material already gathered.


Hon. Michael Slarr (Ontario):: As a further supplementary question, in view of the suggestion made some months ago by an interested delegation for an amendment to the Criminal Code in respect to this matter, will the minister advise whether this suggested amendment has been rejected both by himself and by the officials of his department?


Guy Favreau: Mr. Speaker, that suggested amendment is one of those which are being considered. So far as I am concerned I am not satisfied that there may not be a better formula to define or to determine, but I must say that that amendment has not been rejected. It is still being studied and looked into, in comparison with other formulas that have been devised.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I have a question for the Prime Minister. Could the right hon. gentleman advise the house whether it is still the intention of the government to establish an Indian claims commission and, if so, could he give us some idea when this is likely to be done?


Lester Bowles Pearson: Yes, Mr. Speaker, it is the intention of the government to do this and at as early a date as possible.

Inquiries of the Ministry AIRPORTS



HAMILTON


[Stage Direction]
On the orders of the day:
William Dean Howe: Mr. Speaker, I have a question for the Minister of Transport, and I would like to thank him for the answer he gave me yesterday in my absence, with regard to Mount Hope airport. Since then I have found that there is a proposed $7J million United States airport industry considering the use of Mount Hope airport at Hamilton, and the decision on it will be made by this Friday, thereby making it urgent for the government to reach a decision as to how much will be made available for this airport.


John Whitney Pickersgill: Mr. Speaker, I think this is a matter that cannot be decided by the government alone. We are engaged in discussions with the city and there must be a meeting of minds on this matter, but I believe it is very likely to be decided quite soon.



SHIPPING


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, since I am on my feet perhaps I may answer the question I inadvertently failed to answer, which was asked by the hon. member for Three Rivers a week ago today, about the accident to the Tritonica around a year ago. The hon. gentleman asked whether following the inquiry into the sinking:
-any special change in the routing or the various aid to navigation installations on the St. Lawrence was recommended and, if so, whether such recommendation has been followed by the department.
I am told that the report of the investigation into the sinking of the Tritonica did not contain any recommendations of the type referred to in the hon. gentleman's question, but buoys were immediately placed to mark the site of the wreck, and the intensity of navigation lights was increased to assist vessels to pass safely through the area. We can only regret that notwithstanding these precautions they were not effective in the recent case.


Léon Balcer: Could the minister tell us, now that the inquiry by the department into the recent disaster


has been concluded, whether it is the intention to order a public inquiry?


John Whitney Pickersgill: The answer, sir, is yes.



COMBINES


[Stage Direction]
On the orders of the day:
Michael Starr: I have a question for the Minister of Justice. In view of the fact that consideration has been given since February to the setting up of a marketing advisory council and the repeal of section 34 of the Combines Investigation Act, can the minister tell me whether his study has been completed and whether any decision has been reached with regard to future action?


Guy Favreau: As far as I am concerned, my study of the matter is complete. The reference I intend to make to the cabinet has not yet been made, so for some time this will remain a matter of government policy to be announced as soon as a decision has been taken by my colleagues and myself.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Terry Nugent (Edmonton-Stralhcona):: I have a question for the Prime Minister. Perhaps, since the right hon. gentleman has just left, I could address it to the Acting Prime Minister. In view of the fact that we undertook to sit longer hours principally to get rid of some urgent legislation before an expected summer recess, would the government now be prepared to give consideration to the suggestion that we revert to normal sitting hours?


Some hon. Members:: Hear, hear.


Terence James (Terry) Nugent: I wish the hon. gentleman would at least take the question as notice.
Hon Paul Martin (Secretary of State for External Affairs): I am afraid I did not hear the question; I was thinking about the question asked by the hon. member for Winnipeg South Centre. Perhaps I could take a look at it.


Terence James (Terry) Nugent: If the hon. gentleman would take a look at it and answer tomorrow, that would be fine.



CHANGE IN ORDER OP BUSINESS FOR TODAY

[Stage Direction]
On the orders of the day:
Guy Favreau: Before the first item of business is called I think I owe it to the house to advise hon. members of a slight change which will take place in the order of business as announced last evening.
I had announced that we would first proceed with the second reading and committee stage of the Farm Improvement Loans Act, after which we would take the resolution preceding the bill relating to the Crop Insurance Act, to be followed by the resolution preceding the bill with respect to farm machinery syndicates. The order in which these last two resolutions will be taken will be inverted, and after the committee stage of the Farm Improvement Loans Act I will ask the clerk to call the resolution in respect to the farm machinery syndicates.
In view of certain circumstances which have been explained to the leaders of the other parties, I wish to advise the house that I propose, if we get through the committee stage of the farm loans act today, to ask for agreement to proceed with the third reading immediately. I must say I have had no firm answer from the house leaders of the other parties, but I just want to put them on notice that I will make that request.


Gordon Minto Churchill: With regard to the latter part of the statement made by the leader of the house, let me say that if there are no amendments as we go through that particular bill in committee it may be that the house could proceed to give it third reading; it does not appear to be highly controversial.
However, with regard to the other suggested change may I say that this type of alteration at the last moment is unusual and should not be indulged in without adequate reason being produced. We have made our preparations for the discussion of the Farm Improvement Loans Act, the resolution dealing with crop insurance and the farm machinery bill. To alter the order throws out the arrangements by which people who are taking these subjects seriously are prepared to act.
I dislike raising objections to alterations such as this, but I have vivid recollections of a slight change being made several years ago and a storm of criticism descending upon me, some of it from members who are still in the house such as the Minister of Trans-
Farm Improvement Loans Act port, and some from a member of the then opposition who is now over in London.
Are these resolutions not being dealt with by the same minister, the Minister of Agriculture? Could they not stay in the order which was announced last night? There is not much purpose in announcing business the night before if a sudden change is to be brought before the house just before the first item of business is called. I lodge my complaint with regard to this manner of organizing the business of the house. It is surely possible to do it in a better way. Alternatively, let us be given an adequate reason why a change should be necessary.


Guy Favreau: I am sure the hon. member for Winnipeg South Centre in the kindness of his heart does not wish a storm of protest to be raised against me. I am sorry if a few years ago, if the circumstances were almost the same, there was a storm of protest. Perhaps if I had been here I would have convinced my colleagues not to raise it, but I think there must have been a slight difference in the circumstances.
In any event, Mr. Speaker, the reason for my suggesting this slight change is that in our estimation the farm machinery syndicates matter will probably take less time than the crop insurance question; and second, that this is the type of legislation which if brought to a conclusion will be capable of immediate implementation and application. I think that would be sufficient reason for this slight change, together with the fact that I made it clear that today we would take the two measures, so I take it that in their professional conscience all my hon. friends have duly prepared for both matters.
However, Mr. Speaker, if it is felt that any serious inconvenience will be caused, in the circumstances I am sure the Minister of Agriculture would not mind proceeding in the order announced yesterday. But I think for the benefit of the farmers it would be preferable if we could dispose of the farm machinery syndicates resolution right away.



FARM IMPROVEMENT LOANS ACT


Harry William Hays: the second reading of Bill No. C-119, to amend the Farm Improvement Loans Act.


Mr. H. M. Horner (Jasper-Edson):: Mr. Speaker, before this bill is passed I would

Farm Improvement Loans Act like to make a tew remarks with regard to the question of credit generally and how this bill will fit into the credit situation of farmers, and particularly farmers in our area. This bill, of course, doubles the maximum amount that is available under the Farm Improvement Loans Act, from $7,500 to $15,000. This legislation is primarily concerned with the doubling of this amount.
All the credit that is now available to agricultural people in Canada is generally divided into two groups; first, short term lending under the Farm Improvement Loans Act; and second, longer term credit under the Farm Credit Corporation. Both these methods of obtaining credit for our farmers leave a gap, in that they are not well coordinated one to the other and farmers sometimes have a great deal of difficulty securing operating capital because their assets are tied up with either the Farm Credit Corporation or under the Farm Improvement Loans Act. I say to the minister right away that personally I agree with the increased amount he is making available to farmers through this legislation, but I think his departmental officials, and those in the economics branch of his department particularly, should be considering some method by which there could be more correlation between the kinds of credit that are available to farmers.
The Farm Credit Corporation of course takes a mortgage and it mortgages everything it can get its hands on, regardless of the amount of the loan. I suppose you cannot blame the officials for this, but this is what they do. Therefore, when the farm operator goes to the bank to try to obtain operating capital for his immediate needs, the bank has nothing left that it can take in security or hold, even where it can hold title rather than take chattel mortgages; and of course they cannot do this except under section 88 of the Bank Act.
It is a hardship on farmers when both these things tie up their assets so they cannot obtain additional operating capital which they need on a short term basis. I would also like to point out to the minister that with respect to the Farm Improvement Loans Act we depend upon the activities and policies of the chartered banks to make this money available. We have had several occasions in western Canada when the president of the chartered bank has said "We are not going to give these loans; we are going to tighten up on our funds". The first people to get hurt are the farmers who are trying to borrow money


under the Farm Improvement Loans Act because, of course, the bank makes less money on this type of loan than it does on some other types.
It has happened on occasion that the local bankers in the farming communities have received instructions from their head offices regarding the maximum amount of loan that is set out in the legislation. These managers have been told "You are not to make farm improvement loans over $2,000". I have seen letters to this effect that branch managers have shown me. On occasion farmers have had their programs approved by the bank; then the head office of the bank has sent out a circular to the managers saying "We are not going to lend any more money in farm improvement loans". In this case our farmers have not received the loans for which they have applied.
It is vitally important, if we are to pass this kind of legislation, that we have the cooperation of the banking fraternity in order to make it effective. It is no use at all doubling the amount available under the Farm Improvement Loans Act if the bankers are not going to go along with it. I would hope the minister would make sure that he gets in touch with our banks, because they have made a practice over the years, particularly in western Canada, of cutting off the farmer first of all and worrying about him the least. This of course was the reason for the whole system of farm credit and farm improvement loans being put into operation in the first place; it was because our banks were not looking after the credit needs of the people in agriculture. There is hardly any point in passing legislation to double the maximum amount available if the bankers are not going to make this credit available.


An hon. Member:: Why wouldn't they?


Hugh Macarthur Horner: Because they have done it before in situations of tight money, and they will do it again. The bank managers receive instructions from their head offices to cut down on the farm improvement loans because they are not making any money on them. They have done this under previous Liberal regimes and they did it also when our party was in power. As I have said, Mr. Speaker, I have seen letters from the head offices telling the branch managers not to make any farm improvement loans of over $2,000. What is the point of passing legislation providing that the maximum loan available shall be $15,000 if the banks are giving instructions to their man-

agers to curtail the amount of farm improvement loans? To my mind this is the very essence of the legislation. If the banks are going to go along with this program, fine and dandy. If they are not, we are just putting it on paper for nothing.
I would like to know from the minister whether he has had discussions with the chartered banks association and whether they will go along with this program. It is fine and dandy to pass legislation and then go home and tell our farmers, "There is now a maximum amount of $15,000 that is available in loans", but then when the farmer goes into the bank and asks the manager for a loan he finds he will only give him $5,000. There is not much point in passing this legislation unless the banks are prepared to co-operate in this respect.
I would ask the minister again whether he has had any discussions with the chartered banks in this regard. Are they going to make this maximum of $15,000 workable? Are they going to start giving $15,000 in loans under the Farm Improvement Loans Act? If they are not, I would point out that not very many farmers in my area have been able to obtain the maximum that is provided already.
The minister may well stand in his place and say that perhaps the farmers do not have sufficient assets to enable them to apply for loans, but it is not a question of assets at all. It is a question of bank policy, and that policy is set by the head offices of the banks which are located primarily in eastern Canada. I suggest the very crux of whether this legislation is going to be worth even passing is whether the banks are going to do the job once we do pass it. We are dependant upon the banks to do so, and in the past they have let us down on more than one occasion when it was vitally important to obtain additional money.
I recall that the last time the banks let the farmers down was during a period when the crops were under snow in western Canada. At that time the bank managers were receiving notices from their head offices directing them to curtail farm loans. Under those circumstances, when the farmer needs money he is not able to get it, in spite of legislation passed by this government.


Mr. Benidickson:: Can you tell us the year of that occurrence?


Hugh Macarthur Horner: That situation occurred in 1962. That was a time when farmers desperately needed credit but the banks were curtailing loans under this legislation, when the maximum loan presumably
Farm Improvement Loans Act available was less than the proposed $15,000. Bank managers followed this course on numerous occasions before the one I mentioned. They adopted this attitude in 1956, and I am sure will do so again unless the minister uses his power and that of the government to stop them from doing so. I think the minister should discuss this situation with the head offices of banks in an attempt to ascertain whether they are going to go along with this proposed increase.
Mr. Speaker, I should like again to refer to the other point I made reference to, regarding the tying up of farmers' assets. When a farmer makes a loan under this legislation his assets are tied up and he is unable to obtain bank credit for immediate needs when he finds it vitally necessary to obtain that credit. The farm improvement loans legislation is primarily aimed at intermediate credit, whereas farm credit legislation is aimed at long term credit. On many occasions a farmer finds it necessary to obtain immediate bank credit for day to day operations.
As one can readily see, there are three different categories of bank credit, treated in three different ways. A farmer may have obtained a loan through the Farm Credit Corporation and at the same time have a mortgage on his land, his machinery and perhaps his cattle. If he goes to the bank to get more bank credit of course he is unsuccessful, because his assets are all tied up.
We can propose legislation, put it on the order paper, debate it, pass it and have it become law, but that does not necessarily mean it will be operative. We must have some assurance from the banks that the purpose envisaged by this proposed increase will be understood and carried out by the banks, and I should like the Minister of Agriculture to make some comment in respect of whether he has had any discussions with the heads of chartered banks in this regard, and whether he can give us some assurance that they are going to help to make this proposed legislation work efficiently.


William Heward Grafftey: Mr. Speaker, while we are faced with this legislation at the present time I think all hon. members would be remiss if they scrutinized it just in the narrow context of farm loan legislation. I speak particularly at this time for eastern Canadian farmers, and it is my hope that this is not just one isolated piece of legislation but part of the government's larger and broader plan to keep farmers on larger, more economically productive farm units.

Farm Improvement Loans Act
The minister said some days ago in this house that eastern Canadian dairy farmers were better off than they had been for 15 years, and he repeated that on two occasions. Mr. Speaker, that is just not the fact. While it is very interesting for us by this legislation to increase the loan limit to $15,000, many eastern farmers today cannot avail themselves of even the amount presently available. Many farmers in eastern Canada are abandoning their farms, particularly in my area, in spite of the minister's statement that the dairy farmers are well off in eastern Canada. Many of those farmers will be interested in finding out about even a few instances of loans being obtained up to the $15,000 limit under this new legislation.
I suggest this legislation will not be meaningful to many farmers in eastern Canada unless this government commences to make ARDA work. I do not intend to get into an argument on semantics as to whether the Minister of Forestry, with his responsibility for ARDA, is the eastern minister of agriculture. I do not intend to go to any great length in this chamber today to criticize the present government for not getting ARDA working faster and more efficiently in the province of Quebec; because while Ottawa and Quebec wrangle and argue, the plight of the eastern farmer, who so often is abandoning his farm at the present time, does not get any better. I simply say that unless much greater impetus is given to ARDA than has been given by the government in the past, and unless the Minister of Agriculture contacts the Minister of Forestry, who is now in charge of ARDA, and instructs him to get things moving in the province of Quebec at a much faster rate, this legislation before the House of Commons at the present time will not have much meaning to many eastern farmers.
Mr. Speaker, following the statements made by the minister in this house a number of days ago in respect of the improved position of eastern dairy farmers, I visited some farm fairs in my area, and through discussion of the situation with farmers I have ascertained that they are distressed by the fact that someone has apparently informed the minister that they are better off today than they have been for the past 15 years.
This present legislation, coupled with improved ARDA legislation, I hope will enable the Minister of Industry and the Minister of Finance, in co-operation with the Minister of Agriculture, to assist and encourage

farmers to stay on larger farm units which are more economically viable. I hope this present legislation is not an isolated shot in the dark piece of legislation, but that it is well thought out within an integrated plan.
Mr. Speaker, I hope we will see the immediate establishment of vocational training schools in rural areas, because obviously when farms become automated and larger, young people tend to leave them. I hope the government will encourage young people to attend vocational schools in rural areas in order that when they leave the farms they will be trained and able to take their place in industry. I firmly believe it is part of the government's long term plan to keep farmers on larger farm units, and I hope this plan will be worked out in conjunction with a plan to increase vocational guidance and training in rural areas.
I hope the Minister of Industry will also consider, in respect of his area designation program, that tax incentives should be provided in rural areas for the establishment of light and medium manufacturing industries, and that tax incentives should be provided to companies which decide to retrain workers within their own plants and shops.
I am simply saying that while I support this legislation, it will not be effective by itself. I cannot see it will do much good in the long, short or immediate term picture unless it is integrated-call it indicative planning, if you will-with an over-all plan for agriculture in the east. As I said, eastern farmers are not now taking advantage of the present loan limits under this legislation, and because of the generally disastrous situation facing them many have been forced to abandon their farms.
I hope this legislation will be combined with a much greater emphasis on the ARDA legislation than we have seen up to the present time. I hope it is combined with an increase in the building of vocational training schools in rural areas. Again I say that I think the Minister of Industry in his designated area plans can certainly consider the possibility of tax incentives to medium and light industries which decide to establish in depressed rural areas in the east. I also think the Minister of Finance could seriously consider the giving of tax incentives to industries which will retrain workers in light or medium manufacturing industries in rural areas.
While the assumption is that legislation like this will encourage farmers to remain

on more economically productive farm units, we must be realistic and recognize that their sons and grandsons will often be obliged to leave the farms. While this may have to take place, we should make it as attractive as possible in every way for them to remain in rural areas. It is all very well for us at this stage of the scientific revolution to talk about mobility of workers and the necessity for workers and farmers to be willing to move. I understand this. Certainly in an industrial context it is most necessary that many industrial workers and also office workers be willing to be mobile and move in order to advance themselves. The same thing can very often be said of agricultural workers, but at the same time that should not remove from us in Ottawa the responsibility to make it as attractive as possible for our rural people to remain in a rural environment if they so wish.
I hope again that nobody who votes for this legislation will think it is going to work an overnight miracle for eastern farmers, in spite of the fact that the minister says the eastern dairy farmer is better off today than he has been for 15 years.


Thomas Clement (Tommy) Douglas: Mr. Speaker, ever since the present government came into office we have been waiting for the government and particularly the Minister of Agriculture to outline the agricultural program that the government intends to pursue. Various amending bills have been brought in which deal with the periphery of the problem, but we have had no indication that the government is either bringing in or contemplates bringing in any legislation which will grapple with the fundamental problem facing the farmers of Canada.
I think it has to be understood that agriculture today and for the past quarter of a century has been passing through the same kind of technological revolution which confronted industry in the past century. We have seen tremendous changes in agriculture because of the introduction of new agricultural machinery, new methods of farming, the use of electric power on the farms, new varieties of seed and new types of livestock. The result is that the agricultural population has been declining steadily while agricultural production has been going up.
The 1931 census showed that over 30 per cent of the population of Canada lived on farms. In 1961 this had dropped to 11 per cent. This means that a little over 30 years
Farm Improvement Loans Act ago one Canadian out of every three lived on a farm. Today only one Canadian out of every nine lives on a farm. In terms of the labour force there has been a tremendous change and shift in population. Prior to world war II about a million and a quarter persons were in the farm labour force. This has now declined to 650,000, or one tenth of the labour force of Canada. In other words, out of the total labour force only one person in 10 is engaged in agriculture.
The amazing thing is that side by side with this decline in farm population and the farm labour force we have had a tremendous increase in production. Every once in a while we hear some swivel chair farmer saying that the problem of agriculture is that it has to become more efficient. There is no industry in Canada which has increased its productivity at the phenomenal rate which has been achieved by the farmers.
It is estimated that prior to the war one farm worker fed between 10 and 12 persons. Present figures indicate that every person working on a farm feeds about 30 individuals. This is a fantastic increase in productivity. The increase has not been in terms of quantity of goods only, but also in terms of quality of goods, because there has been a great increase in the quality of production. This has been brought about by increasing the size of farms and by the use of expensive machinery which makes it possible for fewer individuals to farm more land and produce more farm produce. No matter what branch of agriculture one investigates one finds that without fail productivity per worker has risen at a very considerable rate.
Alongside this increased productivity a great many problems have been created. Because farms are bigger, and because more expensive equipment is required, the capital investment for land, machinery and equipment per farm unit has increased tremendously. The time has passed when a person with four horses, a cow and a few chickens can start farming. Farming requires a very considerable amount of capital if the farmer is to operate an economic farm unit. Therefore parliament is well advised to give what assistance it can in the field of providing capital.
We have already done this by amendments to the Farm Credit Act. We are now dealing with the Farm Improvement Loans Act, doubling the amount of money which a farmer may borrow from a bank under this legislation from $7,500 to $15,000, as well as increasing the gross amount which may be

Farm Improvement Loans Act borrowed during the present period and increasing the total amount which the government may guarantee under the new period which terminates at the end of June, 1968.
No one can quarrel for a moment with the suggestion the government has made that we should make greater amounts of capital available to farmers for the purchase of land, the purchase of machinery or for the improvement of their buildings and their equipment. I think this is a commendable piece of legislation. However, there is a point I want to make, and I make it with reference to this legislation and equally with reference to the legislation which has to do with the setting up of farm machinery syndicates. Heaven only knows where the minister got the name "syndicates", but we will deal with that when we come to the legislation.
The point I want to make is that legislation making it possible for a farmer to borrow more money to meet his capital needs, legislation to help him make the best use of his machinery, does not even begin to grapple with the central problem that faces the farmer. Almost every speech I have heard the Minister of Agriculture make when introducing legislation or his estimates has stressed the thought that if the farmer got more capital, if he has a larger economic unit, if he improved his livestock or the varieties of seed he uses, this would solve the problem of the Canadian farmer.
No one will deny, Mr. Speaker, that there is value in helping the farmer get increased capital or helping him improve his farming methods or make better use of farm machinery. However, none of these things grapple with the central problem, and the central problem facing the Canadian farmer today is the problem of farm income. Until we come to grips with this problem we are just playing around with the agricultural situation.
One has only to look at two sets of figures to realize how serious the farm income problem is. The dominion bureau of statistics has made all the figures available, and the last figures just came in this morning. If one looks at the index for the prices of agricultural products, one will find that the index commodity figure in 1951 was 296.8. This figure has been declining steadily until in 1961 it reached 261.2. By 1963 it had declined to 259.3. The figures which have just become available today show that as at January 1, 1964 the index figure for agricultural prices was 252.1. From the base year 1951 to 1964 the agriculture price indices have dropped by 44.7 points, and that is a catastrophic drop

in the price which the farmer receives for the products he has to sell.
During the same period there has bsen an alarming increase in the prices which the farmer has been required to pay for the commodities and services which he must buy in order to produce. The dominion bureau of statistics shows that in 1951 the index commodity figure for the goods and services which the farmer purchases stood at 230. By
1962	this figure had risen to 290.8 and by
1963	it had risen to 298.7. As of January 1 of this year the figure was 299.6. This represents an increase from 1951 to 1964 of 66 points in the index commodity figure for the prices of the goods which the farmer must buy in order to stay in business.
If one looks at the income figures, the dominion bureau of statistics prices and price indices, one finds some very interesting facts. The Canadian Federation of Agriculture in its July bulletin prints these figures and makes some comments thereon. They say that:
-the returns of the average Canadian farm operator for his labour and for his capital Investment are only slightly higher, (7.8 per cent) in 1963 than in 1949, while real wages to wage earners have gone up 40 per cent.
They go on to say that:
-the prices of commodities and services used by farmers have gone up consistently since 1949, and in 1963 farm costs showed an increase of about 40 per cent over 1949.
Now, while this report says the average Canadian operator has received 7.8 per cent more in 1963 than he did in 1949, that is in current dollars. If we look at the table put out by the dominion bureau of statistics we find that the realized net farm income in current dollars in 1949 was $1,513,900,000. In 1962 this had declined to $1,490,700,000. The estimate for 1963 is $1,410,200,000.
But if we take the realized farm income in constant dollars and adjust the income each year for price changes, we find that in 1949 the farmers received $1,513,900,000, and by 1959 this had dropped to $977 million. By 1962 this had risen again to $1,074,700,000, and the estimate for 1963 is $986,700,000. In constant dollars, therefore, the realizable net farm income from 1949 to 1963 had dropped from $1,513,900,000 to $986,700,000. If we base this on the average income per operator, during the period from 1949 to 1963 we find that, in 1949 the average income per operator was $2,283, and by 1963 it had risen to $3,519. That is in current dollars, but if we squeeze out the water and make adjustment for price

changes, the income per farm operator only went up from $2,283 in 1949 to $2,462 in 1963.
No industry can possibly stay in business when over a 15 year period, the price of the goods it sells drops by 44 points while the price of the things it has to buy rises by 66 points. No industry whose costs are rising can stay in business when its net realizable income in constant dollars drops in a 15 year period from $1J billion to $986 million. This is the real problem that faces agriculture.
Research, improved strains, better livestock, more modern machinery, larger farm units, ready access to capital, all of these are important but none of them will solve the agricultural problem until the government tackles the question of farm income.
So long as the farmer is caught in a cost price squeeze, so long as he finds the price of everything he has to sell going down while the price of everything he has to buy goes up, and goes up at an alarming rate, then he is doomed to eventual bankruptcy. Lending him money which he has to repay with interest is not going to solve his problem, unless there is some hope that the realizable income he gets will enable him to pay off these loans, and pay his taxes and meet his other costs.
I rose, Mr. Speaker, merely for the purpose of saying that we in the New Democratic party support any measure that will enable farmers to get credit for improving their farms and extending their operations, but we urge the government to bring down some policy to deal with the real farm problem, the problem of farm income, to get the farmer out of the cost price squeeze, to do something about farm costs which are going up, and about farm prices which are going down. Unless the government tackles this problem it is just playing around.
We have had no indication from the Minister of Agriculture that he is even seized of this problem, that he is even conscious there is a problem about farm income, and unless the government does appreciate this problem, tackles it and brings down legislation to provide the farmers with adequate income in relation to their increasing costs, then we are going to continue to have people leaving the farms. We will continue to have farmers going bankrupt, and to have agriculture as one of the depressed industries in this country.
In days gone by we had industrial black areas. Today industry is experiencing a period of boom, but it is a period of industrial boom which surrounds areas of agricultural depression.
Farm Improvement Loans Act
We have cities that are growing and expanding, but our rural areas are going back, and they are going back because the farmers' income will not meet their costs of production and enable them to stay on the farms as efficient producers. Unless the government wakes up to this problem and tackles it, the problem will get worse.
We are not satisfied in this parliament to have the government hand out the soothing syrup, that if only we have more agricultural research and improved livestock strains and better varieties of seed, all our farm problems will disappear. They will not disappear until the government faces up to the problem of the inadequacy of farm income.
Today farmers find that most of the commodities they produce go into the export market where they must be sold in competition, without any protection, without the farmer having any control over the price at which they will be sold. At the same time that the farmer is selling in an unprotected market he is buying in a protected market where almost everything that he purchases has its price set by someone else. That is why he pays more for his machinery and gets less for his products. That is why the farmer is finding it increasingly difficult to meet his outstanding obligations.
We in this party will keep on pressing the government to face up to the problem of agricultural income and, if it does not face up to it, then we will certainly raise our voice repeatedly until the government either admits that it does not know what to do or is not going to do it, or finally resolves to tackle this problem and undertake the only kind of program, that can make agriculture a viable economy, and that is to put the farmers back on their feet and enable them to operate efficiently and to live comfortably on their farms.
The government has to do something about the problem of agricultural income. If it fails to do so the responsibility will lie with it, and the farmers will not be slow to recognize the government's negligence in this regard.


Mr. Marcel Lessard (Lake Sf. John):: Mr. Speaker, my first words in taking part in this debate are to say that I am not an expert in agriculture, far from it, but coming from an area where agriculture constitutes an important factor in the economy, I think it is my duty to speak in the house on behalf of the thousands of farmers from my

Farm Improvement Loans Act area as well as from the province of Quebec in general.
We have before us a government bill providing for an increase in credit facilities available to farmers. If I look up the order paper, I note that two other measures concerning agriculture are to be considered shortly; both deal also with the need to increase credit available to farmers. In my opinion, this is a serious symptom of what seems to be a lasting disorder. I wonder whether we have the right formula to cure that disorder.
There is a desire to help farmers by all means but the only concrete measures which have been offered till now were all meant to get the farmers more deeply into debt by urging him to invest more in a unit which is already recognized as uneconomic, precisely because it is impossible for the farmer to produce at a cost which would leave him a profit at current market prices.
As the hon. member for Burnaby-Co quit-lam (Mr. Douglas) who just resumed his seat said so well, I think that the farmers whom we now advise to increase their production have proved more than any other sector of our economy that they had anticipated this amazing development of productivity at all levels.
I believe, and there is conclusive evidence to support this statement, that farmers were among the first to improve their production, not only in quantity and in quality, as was stated by the previous speaker, but also in variety, since today, in Canada, they offer a great variety of meat, vegetable, fruit and all other farm products. I think we pay a tribute to the farmers when we recognize the tremendous contribution they made to the economy of this country and also the countless goods they supplied to us through their labour and initiative.
But I think we have not yet found a solution to their problems. I think it is somewhat as desperate people that farmers are now looking up to us. They are wondering whether they really knocked at the right door to get a solution to their problems.
What are we offering them? Easier credit. There is the evidence that they do not have enough income, since we have to offer them sources of cheap money and to guarantee their borrowings.
Is that not proof that their profession today is considered by lenders as not offering enough guarantee, since we feel that the government has to become a surety for them with the banks and other institutions? I

think such a situation is really abnormal. I wonder if you will find now in industry firms with a capital investment of $50,000 to $60,000 which get so little income on an annual basis?
I think that it is in that particular area that we will have to work most; we will have to make the Canadian people understand that they must pay a fair price for the work done by the farmer to produce.
We are ready to pay, in the automobile industry, the manufacturing price plus a certain profit and I cannot understand that the Canadian people do not accept to pay a just and fair price for the farmer's production, although they accept to do it for any manufactured product.
I think that farm production is the very basis of life and that the population must accept to pay a just and fair price for it. At the present time the farmer is in our country the worker who gets the lowest pay for his work.
In my opinion, that is the problem and it is not by providing farmers with credit to enable them to purchase equipment or to enlarge their farms that we will remedy the situation. We are forgetting that the basic problem is one of marketing and of adequate prices for farm products.
It is said that farmers now work for 10 to 15 cents an hour. That is fantastic. A floor sweeper in a plant gets from $2 to $2.25 an hour for unimportant work which, for all practical purposes, requires no special qualification or skills. In comparison with such a salary, the income of the farmer who must support his family is just simply ridiculous. That is why so many farmers leave the farm for the city; they realize that people who have absolutely no qualifications earn much more than they do after a whole year during which their wives and children have worked hard for 10, 12 and 18 hours a day.
We will surely vote in favour of Bill No. C-119 which is before us but that legislation is only a partial solution to the problems of the agricultural industry. When the act was passed in 1945, it certainly met a need and it will definitely be useful for farmers to see the amount of loans available for the purchase of machinery raised from $7,500 to $15,000. However, there is a slight problem that has been brought to my attention by farmers and I should like to speak about it because it concerns the whole field of agriculture.
Nowadays farmers are being asked to diversify their crops. Naturally that calls for the purchase of machinery and farmers are

extended the necessary credit to make the additional investment.
But there is another problem. When they want to buy machinery, they can get a loan from the bank, because the latter gets a lien on the machinery bought and knows moreover that the federal government guarantees reimbursement of the loan. The bank is thus assured that it will not lose anything and the only person who has no such assurance is once again the farmer. The bank has no problem, since it does not run any risk, it does not do any work; on the other hand, the farmer takes all the risks, he is responsible and must work to meet his obligations at the end of the year.
He is the only one under our financial system who is not insured, whose income is not guaranteed. The bank has been assured that it would get 6 per cent interest. There is no doubt that the banks do not want to take any risk; they do not even take the risk of working, they will surely not run the risk of losing money, but the farmer must assume every risk.
When the farmer wants to buy farm equipment, he can do so through this legislation and in order to improve his situation, he is actually asked to diversify his production or to specialize in some field. To this end, farmers must have their production financed on an almost annual basis. In the spring, they must obtain the necessary credit in order to purchase seed grain, lime, fertilizers; they need credit to buy feed grain so as to feed their cattle all through summer and until fall. At present, this type of credit is not available from the banks, which are unwilling to take any chance, because there is actually a risk in that case, since the government does not provide any guarantee. And the banks cannot mortgage the future production, because nobody can guarantee it. Since he is unable to secure a loan on those conditions, the farmer must apply to private institutions, and sometimes even to more or less honest money lenders. In most cases, he has to obtain credit from the large milling enterprises. One knows what it means: farmers must get their feed grain by signing a contract with a mill and commit themselves to buy all their grain there all through summer and until fall. At that time, they unload their crop on the market without knowing its value in advance. There again, mills take no chances, but the farmers run all the risks and have to repay the loans in the fall. If not, they will be dispossessed of everything they own.
Farm Improvement Loans Act
Then, I think that if we really want farmers to profit by this legislation, loans granted by a bank should be guaranteed, because under our present system, the bank cannot lose. But I do not see why we could not take another step forward and guarantee to the banks that they will not lose any money if they grant reasonable loans to farmers to finance their needs throughout the summer until harvest time in autumn.
We should accept that first step, since we have already accepted the principle of guaranteed loans to banks. We should guarantee those loans to banks to enable farmers to elude the control of large millers, enjoy a greater independence and get their feed grain at cheaper prices. In other words, they would be free. They would not be compelled to buy solely from dealers who in most cases are taking unfair advantage of them.
I think that this is the main argument I wanted to develop in my contribution to this debate this afternoon, in short, we should guarantee loans granted by banks to farmers to finance their purchases throughout the year up to harvest time in autumn, in the hope that the farmer would have enough money to his credit to finance his purchases during the year and thus avoid paying 6 per cent interest since, in my opinion, he thus loses any profit realized during the year. Of course, with our present system, this will not come about tomorrow.
So, the solution to this problem would be to ensure for farm products a fair price which would cover production costs plus a reasonable profit as any other production in any other industrial field. Agriculture is a basic industry and therefore it is our responsibility today to see to it that farm products are marketed at a reasonable and fair price.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I would have a few comments to make before the bill is read for the second time. I see the Minister of Agriculture (Mr. Hays) is in his seat and I should like to bring to his attention once more the problem of agriculture in Quebec and particularly in the area I represent.
The minister will perhaps be a bit annoyed at always hearing members from the province of Quebec speak on the agricultural needs of Quebec. However, 30, 35 or 40 years ago members from the west were heard stating the needs of western agriculture. I note that the needs of the eastern farmers today are about the same as those of the western farmers, 35 or 40 years ago.

Farm Improvement Loans Act
Today, I would like to try a bringing together by trying to have the Minister or Agriculture enter the province of Quebec, and there examine and at least understand the needs of Quebec farmers.
Mr. Speaker, I think that the present crisis in Quebec agriculture must be solved through the united efforts of farmers and of the governments.
Farmers should be helped primarily by their respective provincial governments but, inasmuch as our present system forces us to ask Ottawa, for the funds required to fill the gap left by the provincial government, we have to ask the federal government, no matter how reluctantly, to do something to help Quebec farmers.
Mr. Speaker, our provincial government cannot, by itself, solve the problem which exists today, for the simple reason that it lacks the necessary income. That is why we urge the federal government to act as quickly as possible, so it will not let our Quebec agriculture collapse once and for all.
Today Bill No. C-119 is introduced with a view to increasing farm improvement loans.
Mr. Speaker, I must admit very frankly that the reading of this bill leaves me quite puzzled, because I wonder if the government sincerely wants to assist the farmer by increasing-


Mr. Nasserden:: Mr. Speaker, I rise on a point of order. The hon. member who has the floor at the present time is delivering in French a speech for which I believe he has made a great deal of preparation, yet across the way we have the Minister of Agriculture (Mr. Hays) not listening to this speech-


Some hon. Members:: Order.


Edward Nasserden: -conversing with those on the other side of the house and laughing.


Some hon. Members:: Hear, hear.


Mr. Deputy Speaker:: Order. I am sure the hon. member realizes that is not a point of order at all.


Edward Nasserden: I think it is a point of order, Mr. Speaker, because we all know the minister did not have the earpiece on, and he cannot understand French.


Mr. Deputy Speaker:: If the hon. member thinks it is a point of order perhaps he would refer the Chair to the particular standing order to which he is referring.


Reid Scott: Section 1.
[Mr. Gauthier.l


Mr. Deputy Speaker:: Order. The hon. member for Roberval (Mr. Gauthier).


Charles-Arthur Gauthier: Mr. Speaker, I could see that the minister was talking with other members, but I was under the impression that he was consulting his colleagues in order to know whether Quebec agriculture still concerned them. That is why I let him go on. I think he will get good advice, because I know those with whom he speaks now and I know they can give him most profitable suggestions for Quebec agriculture. As a matter of fact, Mr. Speaker, those two members are from Ontario and they know Quebec very well, I presume.
I see the Minister of Agriculture has left the house; he will probably consult Quebeckers, which may be more favourable to agriculture in Quebec.
I am not against the increase proposed in Bill No. C-119, but I wonder seriously whether the fact of increasing the loan from $7,500 to $15,000 will really be profitable for Quebec farmers.
One must have lived in our area and accompanied some Quebec farmers to our chartered banks to know the difficulty they experience when they want to borrow $1,000 or $2,000.
Mr. Speaker, is it sincerely believed-as far as I am concerned, I do not believe it at all, take my word for it-that in the coming months or years, farmers will dare borrow up to $15,000 from chartered banks? This is impossible in 98 per cent of the cases in the province of Quebec, especially when one knows all the investigations conducted by the banks in connection with such loans and all the guarantees they require. In fact some banks require as collateral more than three or four times the amount of money they are risking by granting some loans to farmers.
I know beforehand that in 98 per cent of the cases, this bill will not be to the advantage of our farmers in the province of Quebec, not because the legislation is not good, but rather because the chartered banks are the only judges, in brief, the ultimate judges in all these loans, just like they are for all the transactions they enter into with the farmers.
It is all very well to say in this house that we grant loans to farmers, and we do this and that in order to allow our farmers to get into debt. But what are we actually doing? We are simply acting as sales agents between the chartered banks and our farmers. That is all we are doing in this house. We incite the

farmers to get into debt with the chartered banks. Moreover, the government guarantees such loans, not in order that the farmers may not lose anything, but above all in order that the chartered banks may not lose anything.
The federal government guarantees the loans, and we are asking our farmers to get into debt so that two, three, four or at the most ten years from now, their properties will not belong to them any more and they will be so indebted that they will have to sell everything and seek refuge in the city.
Furthermore, I have had occasion to witness this in numerous cases, as far as loans from the Farm Credit Corporation are concerned. As a matter of fact, some farm loan counsellors, seemingly competent, told a farmer who owned four lots and more than 250 acres of land under cultivation: "You had better sell your farm and go to the city". I have heard that dreadful remark with my own ears and I would like to draw it to the attention of the Minister of Agriculture who, once again, unfortunately, is not in the house. However, I hope he will read my remarks, for I have already pointed out to the house the doings of certain farm loan counsellors whom I had qualified as not being serious, as amateurs, as people who sometimes are touring the country with their wives telling this or that farmer who has no gravel yard or no sidewalk in front of his house: "You are too poor to obtain a loan, go to the city".
Mr. Speaker, I am sure that as long as we have that kind of men and, as I said in one of my articles, men from the cities trying to show the farmers how to live on a farm, we shall always be faced with failures such as the one we are encountering at present. And this will last until the government awaken and realize that they must send competent technical advisers to the farmers so as to see that these loans will enable them to live, for some years at least, on their farms.
Mr. Speaker, I said a while ago that we were merely selling agents. I am asking the government to try, at least in that capacity, to have their say with the banks as far as these loans are concerned.
It has often been claimed that the government controls the banks. This is 8 per cent true. Now, the government might at least control them in so far as directing them to give the farmers a fairer deal.
Moreover, if the government undertakes to guarantee farm improvement loans it should see to it that the farmer who needs only $4,000, $5,000 or $6,000 to raise 20220-509
Farm Improvement Loans Act the yield of his farm by 50 per cent, obtains those sums. At present, the bank manager will offer him only $2,000, whereas he needs $5,000 or $6,000. That is a way of refusing a loan, because the farmer is bright enough to know that a $2,000 loan will often put him in a worse position than before.
For instance, a farmer wants to develop a business of his own-I say of his own, because I am not speaking of such business firms as exist at this time in my country, such as commercial hatcheries, piggeries, flour mills, or any other large animal producing business making a good profit. Indeed, at the end of the year, when the farmers have worked hard, night and day, for those companies, they find that they have earned a salary of about $1800 to $1900 to maintain a family of 10 or 12 children. And we think that this is fine. And we leave the entire control to those large companies or mills which establish profit-making farm production here and there. And then, we are told in this parliament: All is well, farm production is increasing. We are told that it is increasing, but it is always to the advantage of the centralizer, the capitalist, and not of the small farmer.
Mr. Speaker, we in Quebec are able to produce. But I say, even if it should surprise some people, that the crucial point, in Quebec farming today, is not necessarily to accelerate production. To my mind, the capital question is marketing.
I was brought up on a farm, and I know that the farmer's problem in the fall consists in disposing of his products at a reasonable price.
If today we may congratulate ourselves that there is prosperity in the west, it is mainly for this reason: Not only is western production very large, but its marketing is excellent. The west succeeded in establishing the Canadian wheat board, with the help of the governments. Should the Canadian wheat board be abolished in that part of Canada, I am sure that the living standard of our western farmers would decline by 50 per cent.
What do we really need in Quebec? A sound marketing policy so that farmers can be sure that they will sell their products at an economic price.
I am sure that when we have succeeded in giving Quebec a sound marketing policy with economic prices, Quebec farmers will not be reluctant to produce, production will come automatically and in large quantity, as is the case in the west.

Farm Improvement Loans Act
Look at the variety of farm produce in the province of Quebec. In a few years, thanks to this marketing policy and government help, the producer will be more prosperous. It is what has taken place in the west. When the Canadian wheat board was set up, farmers made an effort and that effort was supported.
In my area, I know several groups which work hard, but their efforts are supported neither by the provincial government nor by the federal government. And I must say that in this field the work of the provincial government in co-operation with the federal government is badly directed.
I will give only one example: the blueberry farm program under ARDA. One after the other, the federal and provincial ministers visit the area and say: We have invested more than $3 million in blueberry farms; look how wonderful it is.
Precisely, Mr. Speaker, this is the mistake that is made. Production and overproduction are looked after, and no attention is given first to marketing.
We have set up more than 14 or 15 of these blueberry areas. But, try to find out anything about them. Nobody dares mention them, because nothing has been produced. There has not been anything other than the personal efforts of those who worked for the marketing.
If, this year, blueberries sold a little better, it is due to the fact that two or three private organizations took the matter in hand-and I want to say it in this house-without any kind of help from any government, while we spent $3 million-I am not the one to say it, Mr. Speaker, it is the ministers-in an attempt to set up blueberry patches. However, there was not a cent spent for marketing, not one cent.
I just heard a remark. Since farming now comes under forestry, I say to the Minister of Forestry (Mr. Sauve) that it would have been better for him to appropriate $1.5 million for marketing and $1.5 million for the development of blueberry fields, in order to help those already operating blueberry fields, instead of systematically destroying the forests.
Tremendous projects have been set up lately. Trees are cut down over hundreds of acres of forest lands in order to grow blueberries. Exactly the opposite should be done. Those who were entrusted with this problem know nothing about blueberries and therefore, they were unsuccessful this year, because out of 14 blueberry fields, not one yielded a profitable crop.


Mr. Deputy Speaker:: Order. I wonder
whether the hon. member now speaking should not be concerned that he is straying a little from the matter now before us, that is the Farm Improvement Loans Act?


Charles-Arthur Gauthier: I was just going to stop dealing with that point, because I was thinking that my example was perhaps a little too long. So I will come back to the bill now before us, that is the Farm Improvement Loans Act.


Mr. Byrne:: On a point of order, Mr. Speaker, I wonder whether the hon. member was not trying to get the attention of the hon. member for Qu'Appelle, who does not seem to be interested in the discussion.


Mr. Deputy Speaker:: The hon. member for Roberval.


Charles-Arthur Gauthier: Mr. Speaker, I only wish to prove to the house that if loans are to be granted to improve the lot of Quebec farmers, they would be more beneficial if at least half of them were meant to assist the farmer in organizing the marketing of his products on a solid basis. This is the particular matter to which I want to call the attention of this house.
Let us stop getting farmers to run into debt, let us stop looking at only one side of the picture while we completely forget the other, which is much more important than to be willing to grant loans.
Our farmers do not need loans, they need substantial assistance instead. I figure it would be much better to take 50 per cent of the amount allocated and hand them out as subsidies, instead of continuing to burden the farmers with more debts.
You can boast all you want, throughout the province, about the help you are giving farmers, but I maintain you are only helping them temporarily and that, in its present form, that assistance is harmful to them. When you truly and sincerely want to help somebody, you give him something.
Here, I should like to touch upon a subject about which farmers feel very strongly. I shall not wander too much from the resolution and, in any case, I shall come back to it in a few seconds.
I should like to deal with farm machinery. Here again the Minister of Agriculture should take whatever steps are necessary to try to reduce the price of farm machinery

which the farmers need to operate their farms.
Coming back, now, to farm improvement loans, I will say that if we continue, through chartered banks, to make loans to farmers, thus getting them deeper into debt, we are simply playing into the hands of the financiers. The final solution to the whole problem, as regards both farm improvement and the Farm Credit Corporation, would simply be to decide once and for all to set up a special fund to make loans which would really help the farmer. That fund will be made available, even for marketing, through the facilities of the Bank of Canada. Let us stop lending through private banks, that is chartered banks; let us stop always depending on them to try and get our economy moving. In advance, we are sure that chartered banks will start moving their own economy before the economy of the country.
We have a bank in this country, an institution that belongs to us. Why not use it to help agriculture, which is the basic industry in our country? Now that the Minister of Agriculture is back in his seat, I am sure that he will take the remarks I just made into serious consideration, in order to arrive at some understanding of the needs of agriculture in Quebec and then act as quickly as possible, so as to rectify the farmers' situation in that province, because if we want to put a stop to the rural exodus towards the cities, the federal Department of Agriculture, together with the provincial minister of agriculture, must absolutely try to find a much more serious solution than all those proposed to this date.


Mr. J. E. Brown (Brantford):: Mr. Speaker, the farmers of my constituency have looked forward for some considerable time to the passage of this bill. This bill is very good legislation. I should like to remind the minister however that many of its benefits could be nullified by the attitude of farm valuators, as that attitude has been evident under farm credit legislation. On many occasions in my constituency these valuators have valued farms in such a way that if this situation continues under the banks, the loans made under this bill will be almost worthless to the earnest, progressive farmers in their efforts to modernize and expand farm operations. I refer particularly to those farmers residing in the localities around the village of Mount Pleasant and the villages of Scotland and Burford in my constituency. I trust nevertheless, Mr. 20220-509J
Farm Improvement Loans Act Speaker, that as a result of this legislation loans will be more readily available than they have been in the past.
I must hasten to add, however, that I agree with much of what has been said by hon. members who have preceded me in this debate. I look forward hopefully, Mr. Speaker, to some realistic change in the near future in connection with the availability of farm loans in general in order that the farmers in my area and in my province may maintain their traditional position. If this is to be done they will require more and more money for modernization and expansion in order that agriculture may play a more vital part in the life of my constituency in these times.


Reynold Rapp: Mr. Speaker, I just want to make a few remarks on this Bill No. C-119 and I intend to restrict my remarks to the Farm Improvement Loans Act. I come from a province in which these farm improvement loans are greatly appreciated. One of the reasons for this appreciation is that these loans are made by the banks in times of emergency. In my province crops are very uncertain things. In 1960 or 1961 when we had snowed under crops, many farmers availed themselves of these loans. The same situation could occur this year. At one time we thought we had a very good crop and farmers had no intention of borrowing money. Now, after these heavy frosts, our farmers may have to again avail themselves of these loans. They may have to use the frozen grain as feed for livestock or by going into hog production. In this way they will realize a better return from the grain than by selling it to the Canadian wheat board.
I am pleased to note that the size of the loan has been increased from $7,500 to $15,000. In the past we have found that a loan of $7,500 was not sufficient to enable farmers to invest in new machinery such as grain dryers, which may be needed this year. I was home over the long week end, and it had been raining for three or four days. The prospects were that it might rain for another three days. This means that the crop, which is ready to be combined, is going to be damp and tough. Farmers may be able to make use of these loans by buying grain dryers. As I have said, this is very important because you can go to your bank or credit union and avail yourself of these loans. I regret that this legislation was not introduced a year ago to increase the amount of the loan to $15,000. Western agriculture today is highly mechanized and a loan of:

Farm Improvement Loans Act $7,500 is not large enough to enable farmers to buy certain implements, such as combines.
As I have said, the farmers make use of these loans in cases of emergency. I appreciate too the fact that the loan fund has been increased from $400 million to $500 million. Another thing I should like to stress is that when livestock is purchased these loans are available for a period of ten years. When conditions are such that there may be a drop in farm income, the banks are often reluctant to extend this credit to farmers. However our experience in the past has been good, and I am pleased that the minister saw fit to increase the amount of the loan from $7,500 to $15,000.


Edward Nasserden: Mr. Speaker, like many of the other members in the house I want to congratulate the government for introducing this legislation at this time. This amendment will result in an increase in the amount available under the Farm Improvement Loans Act, and this is something to which the farmers have been looking forward for the last 16 or perhaps 20 months. A great change has taken place during that period in the type of machinery that the farmers are likely to use.
There were some of us who thought this legislation might have been dealt with earlier in this present session. This draws to our attention the importance of the priority that is given legislation in the House of Commons. I felt the government would have been well advised to have brought this legislation forward before introducing the farm credit legislation and then this legislation would have been of some use to the farmers during this harvest period. This was one of the pieces of legislation that was on the statute books when the government led by the right hon. member for Prince Albert (Mr. Diefen-baker) took office.
After that the government led by him retained this as a part of the over-all agricultural policy of the country, and made certain improvements to it. In its initial stages it provided loans of something like $3,000 and now, under the terms of this bill, loans up to $15,000 will be provided. This indicates something of the inflation that has taken place in the price of farm land, and also something of the increased capital costs for anyone engaging in agriculture.
I would like to commend the hon. member for Brantford (Mr. Brown) on his reference that this legislation alone is not enough. I should also like to commend the hon. mem-

ber for Roberval (Mr. Gauthier) and the hon. member for Lake St. John (Mr. Lessard), who drew attention to the government's failure to tackle the problems facing Quebec farmers. Each of these members has indicated to the government that what farm people need more than anything-and I am not at all decrying the value of this measure-is attention to the problem of marketing their products.
We in this party are proud of the record achieved by our government when the hon. member for Qu'Appelle (Mr. Hamilton), who is presently in his seat, was minister of agriculture. One of the members of the Ralliement Creditistes mentioned the problem producers had in getting a market for blueberries, and this is only one of the marketing problems.
I was interested in the remarks of the leader of the New Democratic party (Mr. Douglas) as we in this party have also been waiting for the minister to indicate the agricultural philosophy and general policies of the government. Having these minor amendments brought in on a piecemeal basis is hardly fair to members of the house when they are considering the over-all effect of an agricultural program. Without saying more I repeat that this is a good piece of legislation, perhaps a little late in its introduction, but it should be of benefit.


David Réal Caouette: Mr. Speaker, the purpose of Bill No. C-119 is to increase from $7,500 to $15,000 the maximum amount which a farmer can borrow.
I will say quite sincerely and quite frankly that that is not doing too much to help our farmers get out of a difficult spot. However, I should like to take this opportunity to state that Quebec has not taken advantage as much as the other provinces of this legislation which has been in our statute books for a number of years.
I have here the 1963 report of the Minister of Finance (Mr. Gordon) on the administration of the Farm Improvement Loans Act. When looking at this table, we find, for instance, that, with regard to the purchase of farm implements, Saskatchewan comes first with 18,913 loans; Alberta, second, with 15,246 loans; Ontario third with 9,369; followed by Manitoba, with 7,387, and Quebec with 2,223 loans.
The same situation prevails with regard to the construction, repair and alteration of farm buildings.

As far as the purchase of animals is concerned, Alberta comes first with 3,057 loans; Saskatchewan, second, with 1,899; Ontario, third, with 1,531; Manitoba, fourth, with 1,367; British Columbia, fifth, for livestock purchases, with 429, and Quebec comes last with only 364 loans.
You will agree, Mr. Speaker, that if we compare our province which has six million people, with Saskatchewan which has one million, Alberta with a little more than one million, British Columbia and Manitoba which do not even have one million people, and if further, we compare the total of 2,871 loans granted to the province of Quebec with regard to livestock purchases and other improvements, machinery purchases, construction, repairs, alteration of farm buildings, to the total of loans granted, Quebec comes fifth in line. Saskatchewan comes first with 23,519 loans for a total of $41,639,177; Alberta, second, with 22,085 loans for a total of $37,763,054; Ontario, third, with 14,582 loans for a total of $26,472,190, and Manitoba, fourth, with Quebec in fifth place with a total of $5,598,713.
Mr. Speaker, it is hardly surprising to my French Canadian fellow members from the province of Quebec, whether they be Liberals or Conservatives, that the government today should boast about the advantages of ARDA and so on. On the other hand, why have loans been systematically denied to applicants from the province of Quebec? Do the Quebec farmers not have as much courage as those in the other Canadian provinces to meet their obligations and to take the opportunities they have to produce something on their farms? Just a few minutes ago, somebody was dealing with-


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


David Réal Caouette: Certainly.


Yvon Dupuis: Is the hon. member for Ville-neuve not aware of the fact that the province of Ontario does not provide farm loans, and that it is precisely for that reason that the federal government is granting more loans in Ontario? In the province of Quebec, many loans could be granted by the federal government but they are not for this reason.


David Réal Caouette: I understand what the minister means, but he must admit that we pay taxes just the same in Quebec.
It is not the federal government which pays for the provincial farm loan. If Ontario,
Farm Improvement Loans Act Saskatchewan or Alberta do not have a provincial farm loan board, that is their business. In Quebec we have one, but it is not enough, and it is precisely on this point that I want to call the attention of the house. I feel that it would be reasonable to give Quebec the financial means to grant its own loans to farmers. The problem will be solved when applications for loans from the province of Quebec are no longer accepted at the federal level.
Mr. Speaker, I have here a comparative table which will likely be of interest to the Minister without Portfolio.
In 1962-and please note that I am not a Conservative, far from it-under a Conservative government, the number of loans in the province of Quebec was 3,244, for a total amount of about $5i million, while in 1963, under this government, the number of loans was only 2,871, a decrease of 373. Why such a difference? Why do the Liberals lend less to Quebec than the Conservatives did when they were in office? It would be interesting to know the answer to this question.
In the same report, there is table No. 6 concerning loans granted for the purchase of agricultural implements, new and used. The province of Saskatchewan comes first with 19,432 loans, for a total amount of $34 million; the province of Alberta is second with 15,919 loans, for a total of $26 million; Ontario is third with 9,890 loans, for a total of $16 million; Manitoba comes fourth, with 7,597 loans, for a total of $12.7 million. Quebec comes next with 2,506 loans for a total of $3,934,604.
The federal act applies as much in the province of Quebec as in the other provinces concerning loans for the purchase of agricultural implements, new or used.
In fact, I know personally that the federal authorities have refused to guarantee payment of a tractor or a small farm truck; that happened many times.
If we now consider table No. 7 entitled: "Loans for the construction, repairs and alterations of farm houses and other farm buildings"-


Yvon Dupuis: Mr. Speaker, I do not want to interrupt the hon. member, but I would like to point out that, a moment ago, he stated that 3,244 loans had been made in 1962 under the Conservative administration.


David Réal Caouette: Yes, Mr. Speaker.


Yvon Dupuis: The hon. member also said that in 1963, 373 fewer loans were granted.

Farm Improvement Loans Act However, the hon. member forgot to say that, even though fewer loans were granted, the total amount of the loans is not lower. In fact, it is a little higher. This means that the quality rather than the number of borrowers has been taken into account.


David Réal Caouette: Mr. Speaker, does the minister mean that the quality of borrowers is lower in the province of Quebec than in the other provinces?


Yvon Dupuis: Mr. Speaker, that is not what I said at all.


David Réal Caouette: The amount loaned out matters very little. What counts is the number of farmers who will actually benefit from this assistance provided under the farm loan legislation.


Yvon Dupuis: Mr. Speaker, if you lent money to someone and you knew beforehand that he would be unable to meet his obligations, would it be good policy to lend him money?


David Réal Caouette: Mr. Speaker, does the minister believe there are only 2,871 solvent borrowers in the province of Quebec?


Yvon Dupuis: There are others who have benefited from the provincial farm loan.


David Réal Caouette: Certainly, but the provincial farm loan is under the jurisdiction of the province, not of the federal government, and I am now speaking specifically about the federal farm loan legislation.


Yvon Dupuis: They are the same farmers.


David Réal Caouette: Yes, I understand, but the same farmers, in some cases, tried in vain to borrow from the federal government. They even encountered a refusal from the federal authorities, Liberal as well as Conservative, and that is why I insist to have the government give as much importance to the province of Quebec as to the other provinces.
The Minister without Portfolio just said that 2,871 loans were granted, for a total of $5,598,000, in comparison to 3,244 loans in 1962, for a total of $5,515,000. Perhaps larger farmers were helped, with larger loans; however, a smaller number of farmers were assisted.
The Minister without Portfolio and, needless to say, the government, are aware of the fact that under ARDA, it is intended to help not an exclusive class of farmers. In fact, it is intended to reach all the farmers and to try to assist them. I am of the opinion that had this been done some 10 or 15 years ago, we would probably not have to face today's prob-

lems. The Quebec farmers would probably be as well off as their colleagues in other provinces, for the minister knows very well that agriculture is less prosperous in the province of Quebec than in the province of Ontario or other provinces.
The minister is aware also that the present state of agriculture in the province of Quebec is not due to the negligence of the farmers, but really to the bad administration of the provincial government as well as of the federal government. In fact, our governments have not assisted our eastern farmers in the same way as the farmers of other provinces.
I now go back to table No. 7: loans for construction, repair and alteration of houses and other farm buildings. I appreciate that in this field also, there is the provincial farm loan, but I know that quite often, in some cases, and more particularly during an election, they have played politics with the farm loan. The minister is aware of that, because this has been done in his own constituency.


Yvon Dupuis: At the federal level?


David Réal Caouette: No, on the provincial level. They played politics with the provincial farm loan by making propaganda in certain parishes. As a matter of fact, they were saying that such or such a parish would get farm loans provided that this or that man agreed to take part in the candidates' political organization. We have seen some politicians play politics with agriculture instead of assisting it.
Table No. 7 shows that 223 loans were granted in Quebec for construction, repair and alteration of houses and other farm buildings; those loans amounted to $904,811. On the other hand, Ontario was granted 2,980 loans, Saskatchewan, 1,634 and Alberta, 1,851.
Table 8 of the same report shows that Quebec holds the fourth place concerning loans for other improvements. Ontario got 52 loans for clearing and seeding while Quebec got none. It must be said, however, that our province has its own department of colonization.
Under the heading "Irrigation works", one can see that 83 loans were granted to Ontario, 284 to Alberta and eight only to Quebec.
As far as farm installations and electrification are concerned, 180 loans went to Ontario, 21 to British Columbia, 22 to Alberta, 24 to Saskatchewan and 28 to Manitoba. In that respect, Quebec comes second with 39 loans.


Yvon Dupuis: Those figures do not include provincial loans; that is important.


David Réal Caouette: Mr. Speaker, the important thing is federal loans. At that rate, we would still beat zero, since the province of Quebec can provide farm installations and electrification.
In the field of fencing and drainage, Quebec got three loans as compared with 112 for Ontario.
As for "other than improvements and installations", the report indicates that 499 loans went to Alberta, 451 to Saskatchewan, 151 to Manitoba, 275 to Ontario and 11 only to Quebec.
All this, Mr. Speaker, is just to show that we are doing our share just the same for agriculture and that we are ready to help the other farmers who are still in need of assistance. But I feel the federal government should consider the possibility of calling upon the provinces to establish their own programs, just as Quebec has its own, and of providing the funds required to finance agriculture, not only in Quebec, but in the other provinces as well. For instance, instead of telling us it is ready to lend the sum of $15,000, the federal government should give back to the province its sources of taxation, so the province can have the means to implement this federal suggestion. The farmers would then be more satisfied than they are now.
That is why we have claimed for a good many years and we still claim that the province should control credit so that it can look after its farm and labour problems, in any field for that matter, because the farmer is more at home with the government of his province than with the Canadian government. Ottawa is far from home; his provincial capital is nearer.
That is why, Mr. Speaker, we urge upon the provincial governments, the one in Quebec as well as the others, to make representations to the federal authorities so that the taxation sources of the provinces may be given back to them and that they may have the financial means to set up for the farmers a program which would neither stifle nor crush them, but would really make them kings on Canadian farms.


Mr. Clement Vincent (Nicolei-Yamaska):: Mr. Speaker, I have only a few words to say following the remarks made by the hon. member for Villeneuve (Mr. Caouette) and the Minister without Portfolio (Mr. Dupuis), as far as the number of loans made in the province of Quebec is concerned.
Farm Improvement Loans Act
I have no intention whatsoever to defend the government or to attack the hon. member for Villeneuve, but I feel it is necessary to set the record straight concerning certain figures in the 1962 and 1963 reports.
First of all, in 1961, 11,126 loans amounting to $18,101,149 were granted in the province of Quebec; in 1962, 3,244 loans amounting to $5,515,926 were granted; in 1963, 2,871 loans amounting to $5,958,713 were granted. If there was a decrease it is due to the fact that in 1960 the government of the province of Quebec passed a legislative measure-before the Union Nationale lost power-allowing the provincial government to pay up to 3 per cent of the interest on the loans granted by banks and caisses populaires for the purchase of machinery or for the improvement of farms in the province.
That legislation enabled the farmer to borrow up to $4,000 for the purchase of machinery, farm improvement, the construction of buildings, etc., and up to $3,000 for the purchase of livestock. This means that the Quebec farmer availed himself to the maxi-num of the farm improvement legislation till 1961. Then he somewhat broke away from it to borrow from banks and caisses populaires through the provincial act, because with the latter he could avail himself of a subsidy of 3 per cent granted by the provincial government, so that he had only 3 per cent interest to pay on loans secured under the provincial act.


David Réal Caouette: Would the hon. member for Nicolet-Yamaska allow a question?


Clément Vincent: Certainly.


David Réal Caouette: I wish to ask the hon. member if he is aware of the number of farm loans granted by a caisse populaire or a bank in the province of Quebec.


Clément Vincent: Mr. Speaker, I am not aware of the number of loans granted by the caisses populaires or the banks, but I do know that the caisses populaires granted so many loans that there came a time when they had to stop granting those loans because available funds were rapidly decreasing.
In that connection, I wish to point out that hon. members from the other provinces must not believe that there was any discrimination against the Quebec farmers with regard to that legislation. They took full advantage of it until 1960 to improve their farms and their operations. But after 1960, that is in 1961 and 1962, they found it advisable to take advantage of the provincial legislation to get

Farm Improvement Loans Act the 3 per cent grant from the provincial government.
I repeat it, Mr. Speaker, no one must get the impression that there was any discrimination against the Quebec farmers. The only reason why the number of loans decreased is the one I just gave.
But with the amendment which the federal government is presenting today, increasing the maximum from $7,500 to $15,000, the number of loans will probably increase, because the maximum now allowed by the Quebec legislation is $7,000, that is $4,000 for the improvement or purchase of farm implements and $3,000 for the purchase of livestock, which is not enough for a farmer with a large operation.
Just the same, I wish to point out that I think this legislation should have been presented to us several months ago, because if I am not mistaken-I speak from memory- that resolution has been on the order paper since July 11. Several farmers became interested in it and asked members on the government side as well as members in the opposition to put pressure on the Minister of Agriculture so that this bill could be discussed as soon as possible. I think, Mr. Speaker, that within a few days, this legislation will be passed, but before it has gone through all stages, it surely will be too late, in certain areas, to take full advantage of it. Indeed, by the end of September or by October, farmers will not be as interested as they were in July or August to purchase some machinery they need, or to carry out some improvement on their farm. It is on that point that I wish to criticize the government for not having introduced this legislation sooner. We are going to accept it readily, but it is most unfortunate that they had to wait until now to bring it before the house.
Also I take this opportunity to tell the government that since they took office the only legislation they brought forward in the field of agriculture were amendments to existing legislation. I appreciate that amendments had to be made to those measures, but that is not what the farmer wants nowadays. He is asking for completely new legislation that will improve the lot of farmers in eastern Canada and more particularly, as far as I am concerned, the lot of farmers in the province of Quebec.
To conclude, I wish to say this: all these amendments, even if they are satisfactory, could not be compared to legislation which could be passed to assist the eastern farmers. I refer to legislation concerning the dairy


industry, because it is the basic industry of farming in eastern Canada just as wheat growing is the basic income of western farmers.
We are able to pass practical legislation for the farmers. I should like the government to refer to the remarks made in this house by the hon. member for Qu'Appelle (Mr. Hamilton) and by myself on July 10 last, because if the government really wants to help the eastern farmer, who is now in need of help, it will have to consider the field of dairy farming in order to introduce new legislation. I am sure that this would solve the existing problem and thus, really help the eastern farmers.


Richard Russell Southam: Mr. Speaker, as a member for an important agricultural area of western Canada it gives me great pleasure this afternoon to make a few comments during this debate about this proposed amendment to the Farm Improvement Loans Act. I was disappointed that this piece of legislation was not introduced prior to the legislation dealing with the Farm Credit Corporation because, as was mentioned I believe by the hon. member for Rosthern (Mr. Nasser-den), a lot of beneficial effects have been lost for this particular year. However I am very pleased to see at last that the Minister of Agriculture (Mr. Hays) has introduced another piece of legislation which will help to bolster the agricultural economy.
Mr. Speaker, this piecemeal policy in respect of agricultural legislation, to which we have been exposed by this government, is a far cry from the policy laid down by the right hon. leader of Her Majesty's loyal opposition (Mr. Diefenbaker), when he was prime minister, and in the statement he made I believe in August, 1958, when he laid down a comprehensive national agricultural policy including various measures such as the crop insurance Agricultural Stabilization Act, farm credit, water conservation, amendments to the Seeds Act, human slaughter of animals, and other measures dealing with a multitude of problems facing the agricultural industry. Today we find we are dealing with only the second piece of legislation introduced by this government in respect of the agricultural economy.
Mr. Speaker, today I think my remarks could be related to a statement made by the Canadian Federation of Agriculture in a presentation made to the Prime Minister of Canada (Mr. Pearson) under date of February 26, 1964. As you will realize, the Canadian

Federation of Agriculture represents and speaks for something in the neighbourhood of 500,000 Canadian farmers. That federation presented its brief last February and I should like to read several excerpts dealing with the subject of farm credits. Stated in this brief is the following:
The federation, at the federal-provincial agricultural conference in December of last year, made a number of submissions on farm credit to the government, urging in general much more intensive attention to farm credit needs, and the development of new programs.
I will not repeat these representations here in full, Mr. Speaker, but in the resolutions delegates to the annual meeting laid special emphasis on three immediate needs which I should like to draw to the attention of the house at this time. Those needs are stated in this brief as follows:
First, they reiterated our long standing request for special disaster loan legislation.
This matter is now under study by the Farm Credit Corporation, and the federation is looking forward to early action in this regard.
The brief then goes on to state:
No interest should be charged for the first year at least, and very low interest for an appropriate period, perhaps five years.
Second, the loan limit of the Farm Credit Corporation should be raised to $50,000.
Of course, the house has dealt with that matter and as we are aware, this has been increased to a maximum of $55,000.
The third suggestion in this brief dealing with farm credit relates to the discussion we are having this afternoon, and states:
Third, the loan limit on farm machinery under the Farm Improvement Loans Act should be raised to $10,000-
Mr. Speaker, this point was dealt with a few moments ago by my illustrious colleague, the hon. member for Nicolet-Yamaska (Mr. Vincent), and I think his point was very well taken.
This section of the federation's brief in respect of farm credit concludes as follows:
May we repeat that we feel well-developed, flexible credit services to meet farm needs are of utmost importance and deserve more intensive investigation and research than they have received in the past.
Earlier this afternoon the hon. member for Jasper-Edson (Mr. Homer) made a very valid point when dealing with policy, as far as the application of these loans is concerned. I should like to refer to the annual report of the Farm Improvement Loans Act for 1963. Perhaps I should tell the minister that I 20220-510
Farm Improvement Loans Act am pleased this report was forthcoming. Yesterday when I was looking up some information in respect of this subject I had to refer to the 1962 report, and wondered at the time why there was a laxity in that the 1963 report was not available. We are happy to have received it this afternoon, even though the debate has been under way for some time.
Under the heading "Review of lending operations since inception" this annual report states:
The average size of loans has increased from $784 in 1945 to $1,757 in 1963.
It is interesting to note at the outset that $784 is a very low average, although perhaps it is compatible with the year 1945, and the fact that this was new legislation at that time. However, 19 years later we find that the average size of loans has only increased to $1,757. The comparable figure for 1962 is $1,626. In other words during that year the average loan has only increased approximately $125.
I should now like to refer to the point emphasized by the hon. member for Jasper-Edson. Apparently the lending institutions are taking too tough an attitude in their consideration of applications that come to them, because in looking at the 1963 report in respect of loans made under this legislation we find that they continue to be low. The report goes on to state:
The total amount of all claims paid to the banks under the guarantee represents about one tenth of 1 per cent of the total amount of loans made to date.
I believe that is a remarkable record and indicates that the government has not incurred any great loss in respect of loans made under this legislation. The government has incurred only a minimum loss. A total of $207,622 has been recovered on claims paid as of 1963, including $39,421 which was collected in 1963.
I think the banks should be more flexible and tolerant in their consideration of these applications. I notice this statement at the end of the report in reference to bank loans:
The banks continue to extend their co-operation in the implementation of the Farm Improvement Loans Act. Rural branch banks have established many outstanding lending records in various agricultural areas across Canada. Several individual branch banks, for instance, have made farm improvement loans under this act in excess of $4,500,000. Operations under this legislation have, however, not been confined to rural banks. Farm improvement loans are made by a number of branch banks in smaller cities.
I should like to emphasize the last expression by repeating it: "-a number of branch

Farm Improvement Loans Act banks in smaller cities". I presume they mean that a number of these banks have established good lending records. I do not think that in itself is good enough. The banks of this country have an enviable record, of which we are proud, and they play a very important part in the successful economy of the agricultural industry as a whole. These leading institutions have a definite responsibility under this act to see that there is no discrepancy or variation in policy between one bank and another, and between one area and another. There should be laid down a general policy so that all banks many establish good records in this lending field, rather than just a few. I should like to emphasize the fact, referred to so aptly by the hon. member for Jasper-Edson, that there has been something wrong in the operation of this legislation, in view of the fact that we are today considering an amendment to increase maximum loans to $15,000. Yet, as I say, in looking at the figures we find that the average loan is only $1,757, so the act is not doing the job that we as legislators intended it to do. I think that the Minister of Finance (Mr. Gordon) and the Minister of Agriculture (Mr. Hays) have to take this matter under serious consideration and encourage the lending institutions to take a much more tolerant attitude toward the needs of the agricultural industry.
I was going to go into a more extensive review of the lending operations but this has been done very adequately by previous speakers. In my opinion the hon. member for Brome-Missisquoi (Mr. Grafftey) gave a very forthright review of the need for credit in the province of Quebec, and other speakers this afternoon also dealt with credit needs. Personally I am very much in favour, and I think the agricultural industry in general is too, of the legislation that has been introduced into the house today to make more money available through increasing the limit on loans and also increasing the amount of money available for lending. The necessity was impressed on me as a member of the standing committee on agriculture both two and three years ago when we were inquiring into the cost of farm machinery and were considering how farm credit affected the agricultural industry as a whole.
In the evidence presented to the committee something came out that I thought was very pertinent and important to the committee and the agricultural industry in general. Evidence was given that a great number of farmers who were purchasing machinery on credit


were getting credit through subsidiary loan companies established by the farm machinery companies. In other words, in order to promote the sale of farm machinery on a credit basis the machinery companies were providing credit facilities and credit was not being secured by these farmers under the Farm Credit Act or the Farm Improvement Loans Act. When we inquired into the reason for this situation we were alarmed to find that in many cases farmers were paying from 11 to 13 per cent for the use of money in order to buy farm machinery to equip their farms properly.
To my mind this was a very significant fact and I believe I made the comment at that time that we should look immediately at the farm credit situation so far as farm improvement loans were concerned, and increase the amount of money available for the purchase of farm machinery which money, as hon. members know, is made available at an interest rate of 5 per cent. The interest rate of 5 per cent is in effect over the four year period, which is the period for which the farmer borrows money under the Farm Improvement Loans Act in order to purchase machinery. The difference between an interest rate of 5 per cent and a rate of 11 to 13 per cent that many farmers were paying to the subsidiaries of machinery companies would mean a vast saving.
I wish to emphasize again that the banks must take a more flexible and tolerant view of applications. I also emphasize that we are pleased that this legislation has been brought before the house. I trust it will be passed as soon as possible so that the money will be available to our farmers who need it so badly.


Mr. L. T. Pennell (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, as the house is well aware the Minister of Finance (Mr. Gordon) is charged with the responsibility of presenting this particular bill to the house, and in the circumstances perhaps I may be allowed to answer very briefly several of the questions that have been raised. I might add that I have listened with great interest to a series of excellent speeches that have probed into the very heart of the agricultural problem. However the house will appreciate that the bill deals only with one aspect, namely farm credit.
The hon. member for Jasper-Edson (Mr. Horner) wanted to know whether the banks are co-operating with farmers who apply for loans. This question was also raised by the hon. member for Moose Mountain (Mr. Southam). The only answer I can give, of

course, is to be found in the report itself, which shows that the number of loans has increased steadily over the years, that the size of loans has increased and that the aggregate principal amount of money for guaranteed loans in the present lending period will have to be increased from $400 million to $500 million. I respectfully suggest that this is powerful evidence that there has been a good measure of co-operation between bank managers and farmers, although I am the first to admit that there may be isolated cases in which this co-operation has not been forthcoming.
I am indebted to the hon. member for Nicolet-Yamaska (Mr. Vincent) for the very lucid answer he gave to the hon. member for Villeneuve (Mr. Caouette) regarding the discrepancy between the amount of loans being made in the province of Quebec and the amount in other provinces. I just wish to say to hon. members from Quebec that, as was pointed out by the hon. member for Nicolet-Yamaska, there is no discrimination against the farmers of that province.
One of my colleagues made reference to the fact that some of the merits of the act have been detracted from by the fact that there have been improper farm valuations. With great respect I say to my colleague that I do not think this criticism applies to the Farm Improvement Loans Act, although it may be a valid criticism so far as the Farm Credit Act is concerned. As I did not detect any note of hostility toward the bill now before us I think I should conclude my remarks and respectfully anticipate speedy passage in the committee stage.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee and reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.


Harry William Hays: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



FARM MACHINERY


Harry William Hays: that the house go into committee to consider the following resolution:
20220-510J
Farm Machinery
That it is expedient to introduce a measure to provide for the extension of credit to farm machinery syndicates for the purchase of farm machinery and for the terms and conditions of such loans, the amount of a loan not to exceed 80 per cent of the actual price to the farm machinery syndicate of the farm machinery to be purchased with the loan; and to provide also for the establishment in the consolidated revenue fund of a special account not to exceed $25,000,000 to which shall be charged advances made to the Farm Credit Corporation and to which shall be credited all moneys paid to the Receiver General by the corporation and for other financial provisions in relation to the said fund in connection with the administration of the measure.
Motion agreed to and the house went into committee, Mr. Lamoureux in the chair.


Harry William Hays: Mr. Speaker, the resolution before us for consideration today proposes a type of farm credit which is fundamentally different from all previous credit programs in Canada. We are all aware of the rapid developments that have taken place in agriculture in the past 20 years, and in particular the developments with regard to the types of farm machinery and equipment available for use on our farms today. We know the value of this machinery to the farmers, both in its ability to save manual labour and in its ability to provide the farmer with the timeliness of operation which is so essential to successful agricultural production. Unfortunately we are all also aware of the high cost of a full line of equipment on a farm today.
When a farmer purchases a modern farm implement he very frequently finds that if he purchases an efficient machine it is able to handle considerably more work than he has for it. He may pay the cost, and sometimes a rather high cost, of a machine which he may use only a limited period during the year, and the capital represented by the machine, which could be used to good advantage for other purposes, must remain idle for long periods. It thus becomes a very expensive machine for him to own unless he expands his farm operations greatly. Probably more than any other single factor, the increased cost of modern farm machinery has made it difficult for the small farmer to make his way and earn a reasonable living under today's conditions.
One of the ways in which farmers can reduce their machinery costs is by sharing equipment with their neighbours, either by sharing in the ownership and use of equipment or by obtaining it on a custom or rental basis for the period of time required. Cooperative use of farm machinery is not new.

Farm Machinery
Many farmers presently share the ownership of individual machines or have work done on a custom basis. It is highly desirable, however, that facilities be provided to enable farmers to organize groups for this purpose on a formal basis and to provide the credit facilities necessary for such groups to procure machinery for the joint use of their members.
The proposed measure will provide for the establishment of a revolving fund of $25 million to be administered by the Farm Credit Corporation. The farm machinery syndicates set up under the provisions of this measure will be able to borrow up to 80 per cent of the cost of the machinery they wish to buy. In this way three or more farmers, each of whom might find it difficult to buy all the machinery they require to operate their farms individually, may join together in a syndicate to buy items of machinery of sufficient capacity to do the work of all members. Furthermore, the farm machinery syndicates will be able to make the machinery which they have purchased available for use by other farmers on a rental or custom basis. In this way farmers who are not members of farm machinery syndicates may still obtain benefit from the proposed measure because of the availability of machinery from such syndicate for use on their farms.
Adequate credit facilities are an important need of Canadian agriculture. We now have the Farm Credit Act to provide long term mortgage credit for the establishment of economic farm units. We have the Farm Improvement Loans Act to provide operating credit for individual farmers. Both of these have been, or are in the course of being, amended at this session to increase their usefulness to farmers. As I stated during the debate on the bill to amend the Farm Credit Act, we have set up an interdepartmental committee to keep the credit needs of farmers under continuing review. The present measure will in my opinion provide an additional and valuable supplement to the present farm credit facilities, and will make a substantial contribution to the welfare of Canadian agriculture.
This is the thought behind the bill which introduces the farm machinery credit act. If we can adopt the resolution, Mr. Chairman, then we could present the bill which certainly covers the proposal in a great deal more detail.


Francis Alvin George Hamilton: Mr. Chairman, there does not appear to be too much time available in which to put forward any particular ideas before six o'clock. I shall therefore content

myself by saying that one of the tremendous unsolved problems of the agriculture industry has been rising costs in general and those of machinery in particular. I was planning to put on the record some of the figures that bear out this statement, and then go on to discuss the principle of this particular measure to see how far it moves into the field of meeting this problem. I should like to keep my remarks coherent, so I shall deal with that part of them after the dinner recess.
I should like to point out to the committee that on several occasions in the last 30 years governments have sought to find some answer to the rising costs of machinery. I think all of us recognize that the agriculture revolution during the last 30 or 40 years has been sparked by the mechanization of our farms. I think it is fair to say, generally speaking, that this mechanization hit the prairies first, because they seem to lend themselves to the rapid change-over to mechanization. I think it is recognized also that the move toward mechanization in the twenties was checked by the depression and the war. Since about 1945, western Canada has demonstrated the tremendous willingness of the farm people to risk their future livelihood by borrowing money and by translating this money into modern farm machinery, not only to increase their productivity but to lower the per unit cost of production. The same trend has now become apparent in the central provinces, and I think it will soon spread to all parts of Canada.
May I call it six o'clock, Mr. Chairman?
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Francis Alvin George Hamilton: Mr. Chairman, when I
adjourned the debate at six o'clock I was outlining briefly the characteristic that has been most outstanding in agriculture during the last 40 years, namely the use of machinery in the agricultural revolution that has taken place in our country as well as in others. This machinery that I have been talking about as the main ingredient of the agricultural revolution has been very costly, and to date the farmers of Canada have poured over $10 billion into farm investment to try and make their industry more efficient.
To deal more precisely with the resolution under discussion tonight, I went back in my

reading to the several sources that are available to members of the house. One is the fact, as I said earlier, that the costs of farm machinery have exercised people in government circles for many years. I personally recall at least four farm machinery investigations into the cost of equipment, and one of them was being conducted during the period of the government preceding this one, in the standing committee on agriculture and colonization. For two years practical farmers on that committee tried to get the figures of their costs from farm machinery companies, tried to get from distribution agencies estimates of what it cost to handle this machinery with present techniques, and tried to find practical ways of reducing the cost of machinery to farmers.
Since the change of government the standing committee on agriculture and colonization has been called together, but not once has the matter of farm machinery been referred to that committee, and I gather from what the Minister of Agriculture said this afternoon that very little reading of the records of that committee was done before this resolution was introduced. Later in my remarks I shall make this point even more emphatically.
Another source of information is the royal commission appointed in Saskatchewan, called the royal commission on agriculture and rural life. I remember very distinctly in the years after the war, with the sudden rush of mechanization in western Canada and the rising price of farm machinery, that this was one of the greatest single issues facing leaders of various parties and governments in power, and the government of Saskatchewan, realizing the tremendous need for examination into the whole revolution in agriculture, set up this royal commission which sat for four years, from 1952 to 1956.
I know many hon. members have spent a great deal of time looking over the 14 volumes of that royal commission's report. Volume 2 deals with mechanization and farm costs, and even though this volume deals in generalities I think the conclusions arrived at in the royal commission's report are not only true in many parts of Canada which are just going through the revolution of the mechanical age on farms, but will also be true for many of the areas that have still to go through that revolution.
One thing that intrigued me this afternoon as I listened to the hon. member for Burnaby-Coquitlam put the finger on the federal
Farm Machinery
government, urging it to tackle the problem of farm income or else his party would continually press for that action, was that these were exactly the same words as I heard him use 20 years ago. Because looking at this problem as an outsider for many years, the thing that struck me about the attitude of the C.C.F. party, now the N.D.P., is that it pointed the finger at the federal government and always held it responsible for farm income.
Generally speaking I believe that this is correct, that rightly or wrongly, the federal government has assumed responsibility over the years for farm income; but it so happens that on this question of action on farm machinery costs, which is recommended in various circles, it is usually only in the constitutional field controlled by the provinces that the definitive and final action can be taken.
It is rather interesting to look at this royal commission report of eight years ago and ask ourselves how much was done in Saskatchewan about its recommendations. I shall not go through the whole 31 conclusions; I will just deal with the recommendations at the end of the report, where the first recommendation urged reform within the farm equipment industry and distribution system as it now exists. The distribution, as it now exists at the consumer level, can only be controlled under property and civil rights by a province.
A second recommendation was that cooperative manufacturing and distribution be examined as a way out of the dilemma, and a third recommendation was nationalization of the industry. This would probably be in the field of federal power, if you are going to do it on a federal basis, but actually constitutionally the power lies only with the provinces.
Looking back over the last eight years we see there was certainly no atempt in Saskatchewan, which is the leading province so far as mechanization is concerned, to nationalize the industry. Of course it was impossible for the Saskatchewan government to do this, because if it nationalized industry in Saskatchewan it would have been called socialist. No socialist government would ever dare to be called socialist, so it shied away from that alternative.
The commission recommended co-operative manufacturing and distribution. There is, Mr. Chairman, one company in existence, C.C.I.L.-Canadian Co-operative Implements

Farm Machinery
Limited-which is set up on the basis of co-operative distribution of the products of one of the manufacturers. It is spread pretty widely through the west and has made a tremendous effort to gain the advantages of co-operative distribution in a very wide area of the country; but if you are objective in your observation of this operation you have to agree it has not been successful, and there are various reasons for that. As to the first recommendation, I think something was done on those lines in Saskatchewan under an act dealing with the distribution of farm machinery in that province. Regulations were changed and tightened up, in consequence of which I believe some 200 merchants engaged in the distributive side of the industry were squeezed out of operation; the regulations prescribed in detail what they had to do if they were to retain their licences to distribute machinery. Apart from that, very little was done in Saskatchewan. I mention this because in my opinion a solution to this problem of machinery costs will not be resolved by one government or another; there needs to be a co-operative approach by governments in both realms of jurisdiction.
I make these comments as an introduction to the general discussion of this resolution. I believe there are in this house a large number of members who have had long experience in farming. Many of them have mechanized their operations completely. Many of them know the problems of financing and the difficulty of equipping farms with modern machinery while keeping costs low enough to enable them to stay in the competitive business of agriculture today. The experience of these members represents a wealth of human resources which could be applied to this task, and from the evidence of the work of the committee on agriculture and colonization over the last few years it appears that the committee had begun to think of a full series of practical suggestions to improve the distribution of farm machinery and reduce costs. I should like to suggest at this point that the bill before us should go before the committee on agriculture so that we may have the benefit of the tremendous amount of knowledge available on the subject in this house. Admittedly, most of the members who have this experience are on the opposition side, but there are several government supporters with practical experience in mixed farming and I am sure they could use this knowledge to assist the efforts of the minister to solve this problem.
I heard only part of the minister's introductory remarks. I gather they were in line

with the resolution before us. We are all wondering what the word "syndicate" means. Some of us thought immediately of Spain in the days of the anarchists when syndicalism was prominent among the social and political ideas of the day. But obviously, on reflection, this is not what the minister has in mind. The expression means some grouping of farmers. I do not suppose there is anything in farming which is harder than persuading farmers to work together. In my personal experience even men who have fought side by side during the war as comrades on the field of battle, and who returned to farming after the war was over, found such co-operation impossible to achieve. With that sort of background one would think they could work together and utilize the same machinery. Yet those same men who served as friends during the greatest of difficulties fell into hostility and enmity when they had to make joint use of farm machinery. In the early days, the trouble arose largely over the use of separators. Farmers would get together and buy a separator. Then, under the pressure of fall weather, the fights which occurred, in many cases between friends of long standing, made them enemies for life. This same difficulty has marked shared farming operations in all parts of Canada. The only time such programs seem to work is when those engaged in them are connected by a blood relationship or when the partners are unusually congenial. After all, it is hard for a man, when his whole year's wages depend on a successful harvest operation, to wait his turn under a pooling arrangement.
This is a difficulty which we must expect. To refer to the situation in Saskatchewan once again, a serious and sincere effort was made after the war on the part of many people to set up a co-operative type of farming. The failures, which were legion, almost always came down to this question of people getting along together. Success was encountered only when those concerned were of a congenial nature, accepting the leadership of whomever they had appointed or elected. No government should be condemned on account of this human frailty. It is a fact which has to be faced when we are considering what is likely to happen in connection with this legislation.
I, for one, intend to support this measure. I do so because I do not think there is any problem which is more vexatious on the cost side of agriculture today than is the cost of machinery. So I think the effort we find here should be supported. I have warned the

house about the difficulty likely to be encountered when a group of farmers is brought together. I hope farmers will accept the logic of the situation-that the use of one set of machinery for a certain operation spread over five farms is more economic than the possession by each of the five farmers of his own equipment. I will submit a corollary to the point I have made about the difficulty of getting people to co-operate. It seems we must accept the fact that certain farming operations must necessarily be carried on when the weather is right. Then we should accept the principle that in relation to these operations a farmer must have his own machinery, his individual possession. If we accept this, then I believe we would make a step toward wisdom by letting him have it, even though logic says farmers would be better off if they pooled their operation. The operation I have in mind is, primarily, harvesting, though my remarks apply also to certain types of seeding and cultivation equipment. However, there a number of operations, particularly in mixed farming on modern farms which lend themselves to some form of co-operation, especially those which can be carried out over a period of time without any loss in return to the farmers concerned. One example which occurs to me is machinery for clearing out cattle corrals; this is applicable to the west generally, and it is increasingly applicable to eastern areas. Another example is machinery for removing manure piles and distributing them over the fields. This is another job which can be done over an extended period of the year, and it can be done more efficiently by a group which comes in to carry out this particular task than by the farmer himself who is often occupied doing other jobs at a busy time of the year. It does not matter whether it is done in May, June, July or August and it is obviously unwise to have this equipment on only one farm if several farms can share it.
There is another type of operation which comes into this category. It may not be so common in eastern areas but I do know that it is of importance in the Red River valley of Manitoba, namely the harvesting of com and sunflowers. This is an operation which can be carried out over a period of several weeks without any prejudice to the farmer either as to quantity or quality, and it seems sensible that there should be pooled machinery in connection with it. I could outline half a dozen such operations where pooled operations would not only be wise in themselves but where they would not conflict with the ele-
Farm Machinery
ment of human nature which has, in the past, upset so many efforts toward co-operation.
I put this corollary forward because I am trying to demonstrate as best I can that there are arguments in favour of this type of approach. I am also warning the minister and his officials that they can expect trouble with many forms of co-operation in those fields of activity on the farm where everything has to be done at the same time on every farm.
I would like now, if I may, to just put on the record the size of the problem, using figures taken from the d.b.s. handbook. The figures I am going to use are based on the eight-year period from 1954 to 1961. I think they will demonstrate that in this race to get the increased income about which the hon. member for Burnaby-Coquitlam was speaking we are barely holding our own, and in some parts of the country we are actually losing ground. I give these figures under two main headings. The first heading is "Realized gross income" and the second is "Operating and depreciation costs".
Any person knowledgeable in farm economics will know that these figures do not include the interest on the land value and the labour of the man working on the land. Let me put these figures on the record to show the house how the race between income and costs is going in Canada. These are national figures and they do not tell the story in regions. I will attempt to clarify that later. In the year 1954 the realized gross income of farmers across Canada was $2.7 billion; the costs were $1.6 billion. I am taking these amounts to the nearest round figure. In 1955 the income was $2.7 billion, and the costs had risen to $1.6 billion plus. In 1956 the income had risen to $2.9 billion plus, and costs had risen to $1.7 billion. In 1957 income was still at $2.9 billion, and the costs were still at $1.7 billion. In 1958 the income jumped rather drastically to $3.1 billion, and the costs had risen to $1.8 billion. In 1959 the income had gone to $3.1 billion plus, and costs had gone to $1.8 billion. In 1960 income had climbed to $3.2 billion, and costs to $1.9 billion. In 1961 income had risen to $3.3 billion, and costs to $2 billion.
These figures show that in the last eight years there has been a rise of 22 per cent in farm income; but the costs during that period have risen 27 per cent. If you take the figures for 1962 and 1963 which are available, you will find this trend has continued. So as a nation, Mr. Chairman, the costs are rising at a greater percentage than the income.

Farm Machinery
When you break it down into farm income per farm-because it must be remembered that not only has farm income been going down and costs have been going up, but the number of farmers has decreased-you get a more accurate picture. In the period 1954 to 1957 the realized gross income, as an average all across Canada, was $4,891 per farm. The operating costs of the average farm in that period were $2,883, leaving a net realized income of $2,008. In the years 1958-1961 the income for those four years was $5,964 per larm; but costs had gone up to $3,514 per farm, leaving a net income of $2,450. If I may do the arithmetic for hon. members, comparing the period 1958-1961 with the four preceding years, farm income had gone up $1,073, costs had gone up $631, and the increase in net income per farm was $443.
Therefore, I think in all fairness we can say that if the federal government is responsible for farm income, there was some betterment of the position; not as much as we would have liked, but at least we reversed the trend that had been there in that first period after the war. So we can say that for each one of those four years the increase in net income, after costs had been taken off, for the average farmer across Canada, was $443 better each year than it had been in the preceding four years. I translated those figures into income per farm to give the real picture and to point out to the committee, and I hope to the country, that progress has been made in meeting this question of farm income. I have given the figures of rising costs to indicate that the battle is still going on and percentagewise the costs are rising, as a nation, faster than the income. If this trend were to continue indefinitely, eventually the net income increase would slow down again and we would be in serious trouble.
When you look at the picture in areas across Canada you get a different story. I broke these figures down for the maritimes, for the same eight years. With regard to the maritimes, if you compare the years 1958-1961 with the previous four years, during those four years the average increase in income per year, per farm, was $431; but the costs went up during that same period each year by $433. By the correction of decimal places it actually works out that in each of those years the average farm in the maritimes lost out by a little better than $1 each year. So in the maritimes, when the rest of Canada was getting ahead by $443 a year income over costs, farmers actually lost $1 a year. I think this gives a very dra-

matic picture of why our attention should be increasingly on the farms in eastern Canada.
With regard to the province of Quebec, once again using the figures per farm, in the four years 1954-1957 the average income per farm was $3,755. It increased in the years 1958-1961 to $4,428. This was an increase of $673 per year, per farm. But the costs during that same time climbed from $2,122 per year, per farm, to $2,767, or a net increase in costs of $645. Therefore, Mr. Chairman, with regard to Quebec farms in those four years the gain of income over costs each year was only $28 per farm, compared to the national average of $443. Therefore Quebec is just barely holding its own, and no more.
With regard to Ontario the figures are a little better. In Ontario the increase per farm, per year, for those four years was $1,173. The increase in costs was $915 per year; so there was a net gain in each of those four years of $258 per farm, as compared to the national average of $443.
The figures in relation to the prairie provinces tell a very dramatic story. Comparing the four years of 1957 to 1961 with the succeeding four years their income increased very dramatically to the extent of $1,315 per farm, and the cost only went up per farm to the extent of $453, which is one of the lowest increases in the whole of Canada. This gives an increase in realized income, when you subtract costs from gross income, of $863 per year per farm. Therefore, western Canada, because it had poured these hundreds of millions of dollars into mechanization, the farmers were gaining the benefits of it, and the gains in income rose quickly over costs as compared to the rest of Canada.
To complete the picture across Canada I will give the figures for the province of British Columbia. The province of British Columbia had an increase per farm for each of those four years over the previous four years of $1,056. Costs went up $748 per farm per year giving a net increase of income of $309 for each of those years as compared to the national average, $443.


Lucien Lamoureux: Order. Does the hon. member have the unanimous agreement of the committee to go beyond his allotted time?


Some hon. Members:: Agreed.


Francis Alvin George Hamilton: I think I can complete my remarks in two or three minutes, Mr. Chairman.
I have put these remarks on the record with the hope that the situation, vis-5-vis

farm income increases, cost increases and realized net income, can be applied to this legislation that the minister has brought in. I am going to suggest that this is an attack on these rising costs across Canada, which are growing at about 5 per cent greater than income, or 27 per cent compared to 22 per cent. However, this is such a small step that I hope farmers across this country are not going to become too excited about what it is going to do.
I know something of the tremendous difficulties that will have to be faced to reduce farm machinery costs, which represent the largest single item of expense in the agricultural industry in Canada today. In eastern Canada of course the highest cost factor is in respect of feed grains. Generally speaking, across Canada, when one averages out the figures he will find that farm machinery represents the greatest need and the greatest single cost of operating a farm. If this legislation, small step as it may be, does even a little bit to help reduce the expense incurred by even a few farmers, I think we have no choice but to support it.


Thomas Clement (Tommy) Douglas: Mr. Chairman, the resolution which is before this committee is designed to do something about the very serious problems that exist in respect of farm machinery, and how it can best be made available to farmers in view of the heavy costs which are involved. As most members realize, this question of farm machinery, and the high costs which are imposed on farmers, is something which has concerned this House of Commons and the legislatures of some of the provinces for the past 25 years. I think the first committee set up by this parliament was set up in 1937, sat through 1937 and 1938, and made a very exhaustive report to the house, in respect of which unfortunately action was never taken. Other reports have been made, one of the most exhaustive of which was made by a legislative committee of the Saskatchewan legislature. That committee made a series of recommendations, most of which were carried out in so far as they fell within provincial jurisdiction.
The hon. member for Qu'Appelle has made reference to the royal commission on rural development in Saskatchewan which sat between 1952 and 1956. He took some time to deal with those recommendations and to offer some criticism in respect of the alleged failure of the government of that province to carry out those recommendations. The hon. member seemed to be somewhat incensed about the fact that I said this afternoon that the real
Farm Machinery
problem facing farmers of Canada today was the lack of farm income. He was only able to belittle this statement by saying he heard me make it 20 years ago. Of course the fact it was made 20 years ago does not destroy it today; it is still true.
As I pointed out in the figures I gave to the house this afternoon, any industry which finds the index price for the things it sells down by 44 points, and the index price for things it buys up by 66 points knows it is on its way to bankruptcy. There are parts of the agricultural economy which do not share this general situation from time to time, but the over-all picture of the agricultural industry is serious, and until we grapple with this problem of farm income we are not going to solve it, and certainly not by putting on little patches. We are playing blind man's buff with this agricultural problem.
The' hon. member for Qu'Appelle dealt with some of the recommendations made by the royal commission on rural development in Saskatchewan, one of which related to nationalization of the farm implement industry and he said, that the reason this had not been done was because socialist governments never believe in socializing anything. I believe that even one as naive as the hon. member for Qu'Appelle knows that one cannot socialize an industry unless it is within one's jurisdiction, and the farm implement industry does not happen to be located in the province of Saskatchewan. The centre of the farm implements manufacturing industry is pretty well located in central Canada, and while distribution is carried on in the province of Saskatchewan and the other prairie provinces, it would be of little value to nationalize distribution when someone else has control of manufacturing. The fact is of course that when the member said this is a field falling within the jurisdiction of the provincial government, and they alone have the power to nationalize the farm implement industry, he is talking complete nonsense. A provincial government could hardly deal with an industry which is nation-wide; but the government of Canada which has power to deal with matters which are for the general advantage of Canada, does have the power to deal with the farm implement industry. The only reason I can imagine why the hon. member for Qu'Appelle spent so much time on this question discussing what happened or did not happen in Saskatchewan is because he was trying to create a smokescreen behind which he could hide the fact that during the years he was federal minister of agriculture noth-

Farm Machinery
ing whatever was done to tackle this problem in respect of farm implement prices. As a matter of fact, a committee of the house was set up and spent I think two years studying this situation, but during at least the last two years the Conservatives were in office the committee was not called together, and the whole thing died after it had received the necessary publicity to create the impression that the Conservatives were concerned about this problem and might eventually do something about it.
Another recommendation of the royal commission on rural development was in respect of co-operative manufacturing and distribution, and the hon. member for Qu'Appelle is quite wrong when he says that was not at all successful. As a matter of fact, Canadian Co-operative Implements Limited has been very successful in its operations.
As a result of loans made to it by the three prairie governments it was able to go into the manufacture in Winnipeg of small farm implements, has been able to enter into long term agreements to buy farm machinery at very acceptable prices from one of the manufacturers in eastern Canada and one in United States; has been able to reduce the price of farm machinery to its members and has brought about very substantial savings for the farmers who make use of the co-operative implements organization. No one should rule out the co-operative manufacturing and distribution of farm machinery as one of the methods for improving the lot of the farmer, in so far as farm implements are concerned.
As a matter of fact, I hope the minister will look into this field, and if the federal government is not prepared at some time to nationalize the farm implements industry it could help by making capital available to the co-operatives so that they could expand their operations both in manufacturing and distribution. I think the competitive effect of a powerful co-operative implement manufacturing and distribution organization in Canada would go a long way toward compelling some of the farm implement companies to get their prices more in line with what they ought to be.
The hon. member for Qu'Appelle said that the Saskatchewan government had done something about distribution, but that all it had succeeded in doing was to squeeze some 200 individuals out of business. I make no apology for the kind of people who were squeezed out of business. The government took the recommendation of the royal commission and of a legislative committee and

required all persons who were handling farm implements to be licensed, primarily so that they would be reliable persons who would not only sell machinery but would be prepared to service it and would be prepared to keep on hand adequate supplies of repair parts when they were needed. A farm implement agent has a responsibility to do more than just sell you a piece of machinery and then disappear into the mists. He has a responsibility to be there when the farmer needs a part for his machine, especially if he needs it in the middle of harvesting or when spring seeding is on. He needs to be able to get that part quickly. The licensing was restricted to those who were prepared not only to be financially responsible but to have adequate supplies of parts and repair facilities on hand at all times, and if they were not prepared to stand by the product that they had sold, and prepared to service it and supply parts for it, they could not have a licence.
It seems to me that instead of the hon. member for Qu'Appelle belittling this action he should be commending it, because this is what ought to be done all across Canada. This of course is not a federal responsibility. It is something over which provincial governments alone have jurisdiction. But if people are going to make a very handsome commission, as they do, out of selling farm machinery, then they have a responsibility to stand behind that machinery, to service it and to see that when people want parts for a machine those parts are available. I shall have something more to say about that later.
The other thing which the royal commission recommended, as did the legislative committee, was the setting up of co-operatives for the co-operative use of farm machinery. Again I must take issue with the hon. member for Qu'Appelle who said with regard to these co-operative farms, if I remember the phrase he used, that "failures were legion". I would be obliged if the member for Qu'Appelle would produce figures some time as to the legion that were unsuccessful.
These co-operatives fell into two classes. There were actual co-operative farms, of which I believe 27 were established and I think 26 are still in operation. In the main these farms were set up by veterans when they returned from world war II. They owned the land co-operatively, owned the equipment co-operatively and farmed as a unit. In the main they have been extremely successful. I agree with the hon. member for Qu'Appelle that the main problem is a social one rather



IS, 1964

[Stage Direction]
than an economic one. Sometimes some of the members did not get along or, more specifically, their wives did not get along, and sometimes they moved off the co-operative farm.
Roger-Joseph Teillet: They were generally successful.


Thomas Clement (Tommy) Douglas: But of the less than 30 that were set up I think 26 of 27 or 28 are still operating, and operating most successfully from an economic viewpoint, and I believe from a social viewpoint as well. But the more successful experiment was the setting up of co-operatives for the co-operative use of farm machinery. Between 300 and 400 of these co-operatives were established and they are still in operation. They were particularly designed to help small farmers who found they could not operate with the old horse drawn vehicles and remain in business. Yet if they bought farm machinery their capitalization was greater than the size of their farms warranted.
Not only that, but because their farms were small they bought the smallest kind of machinery, which is the most expensive to operate. A man with a large farm who can buy diesel equipment can purchase fuel at half the price of fuel for an internal combustion tractor. These men who were buying small tractors found that their cost per unit was much higher than that of their neighbour down the road who was using diesel equipment. So these co-operatives enabled groups of farmers to come together, buy large machinery with its low cost of operation and do their farming with this machinery, with the result that none of them had too heavy an investment for the size of his farm and yet was able to get all the advantages of low cost operation.
These co-operatives for the co-operative use of farm machinery have been quite successful. They have had problems, it is true, but they have had a great deal of help from the farm management branch of the University of Saskatchewan. A very careful accounting has been kept of their costs per unit, per acre and per hour, and they have enabled several hundred smaller farmers to remain on the farm and continue operation who otherwise would have been driven off the farm, had they not been able to engage in this type of co-operative endeavour. Therefore when the hon. member for Qu'Appelle says that nothing was done about the royal commission report on rural development, I want to say that everything was done that could be done within provincial jurisdiction, including the matter of licensing, the matter of trying
Farm Machinery
to improve the distribution system, cooperatives for the co-operative use of farm machinery and the co-operative farms themselves.
One other thing was done as a result of this report, which has been most useful. I refer to the setting up of the first and probably the only provincial farm machinery testing operation in Canada. Every piece of farm machinery that comes into the province is tested by a provincial agency set up for that purpose, and the machinery is graded A, B, C, and D and so on. A statement by the agricultural implement engineers accompanies the particular piece of machinery, and at the university and experimental farms it is put under all kinds of tests. A report is written as to its performance, how it stands up under certain conditions and certain strains, and all of this information is made available to the farmers and to the farm organizations. If any farmer wants to buy a piece of machinery in spite of the report, or purchase a piece of machinery that has not been graded, that is his privilege. Nobody can stop a man buying something which has not been proven and about which he knows nothing. But any farmer, before he buys a piece of machinery, can get a report on that piece of machinery. He can find out how it is graded, how it stood up under various types of farming conditions, and before he buys it he knows how it is likely to react under given conditions.
He knows also, when he is dealing with a farm implement agent in the province of Saskatchewan, that the agent must give him a warranty guaranteeing the performance which is advertised. He knows also that the implement agent, in order to retain his licence, must carry repair parts and must service the machinery which he has sold. He must stand by it or take the chance of losing his licence. I say, therefore, that far from decrying the actions which have been taken by the government of Saskatchewan with respect to these reports on farm implements, the hon. member for Qu'Appelle, as a member from Saskatchewan, ought to be taking some pride in the fact that there is no province in Canada which has done more, within the limited jurisdiction which a provincial government has, to improve the sale, distribution and servicing of farm implements.
Now, Mr. Chairman, I hope that when we get to second reading of the bill the minister will give us some further information relating to what he has in mind. I am interested in what he calls these farm implement syndicates. Are they to be co-operatives in the

Farm Machinery
true sense of the word, that is will they be organized on the basis of one member one vote? If there is a surplus, will this be distributed on some basis related to the amount of work which is done for each member, or the amount of use which each member makes of the machinery which has been purchased by the syndicate? Will joint stock companies be permitted or will these syndicates be organized entirely on a co-operative basis? 1 hope the minister will tell us whether or not corporation farms are going to come under this type of legislation, because corporation farms are becoming all too prevalent in some parts of Canada. Packing companies and food processing companies have set up farms on which the farmers are paid what is virtually a commission for operating them. Are they going to be able to come under this legislation, or is the legislation designed solely to provide a service for the family farm and the individual farm operator who joins with his neighbours in forming an organization for the purpose of jointly purchasing and using farm implements?
I think there is the germ of an idea here that could be useful, if what the minister has in mind is something similar to the cooperatives for the use of farm machinery. This method could be useful, particularly to the smaller farmers. If this legislation which the minister is going to bring down makes it possible for the smaller farmers to combine themselves so that they can get the advantage of the larger machinery which they cannot afford to own or operate themselves, then it will certainly help to reduce farm costs and do something toward helping get the farmer out of the cost-price squeeze. I want to suggest to the minister that I hope he is not going to accept this as a solution to the problem of farm implement prices. All the investigations which have been made by various royal commissions and parliamentary committees indicate that over the last 30 years, while the labour factor in producing farm implements has reduced on a per dollar cost basis, the amount spent in promotion and advertising has gone up; that a very great part of the excessive cost of farm machinery is due to duplication in the industry and particularly to the duplication of repair services. In every small community there are three or four implement agents, each of whom must carry a supply of repair parts. All of this costs money.
The possibility has been looked into of setting up repair depots at which repair parts for all the different makes of farm machinery CMr. Douglas.]
would be available, rather than having three or four separate agents handling these repair parts in every community. I think the government will have to go much farther. I think the government will have to sit down with the farm organizations in Canada to see if the co-operative manufacture, co-operative distribution and co-operative servicing of farm machinery cannot be worked out, with the government assisting by way of loans to these co-operatives to enable them to set up the necessary factories or to buy out some of the existing farm implement companies. I am convinced that nothing effective will be done about reducing the price of farm machinery to farmers, that nothing effective will be done about removing the costly duplication of services in both the selling and repairing of machinery until the farmers themselves, with whatever assistance the government is prepared to give them, establish effective cooperatives for this purpose. While I hope this measure the minister is introducing will be of some value, and we will know more about that when we get down to examining the legislation, I trust he will not consider this first, faltering step to be a solution to the problem by any means.
For 30 years parliament has looked at this problem, but so far nothing really effective has been done to cope with it. I hope the minister will be prepared, in the not too distant future, to work out a dynamic, bold policy and bring it to this house. I am sure if he does he will have the wholehearted support of the organized farm movement in Canada, and I am sure he will get a good reception from the members of this house.


Horace Andrew (Bud) Olson: Mr. Chairman, the resolution that has been introduced today for the purpose of financing what has been termed farm machinery syndicates is certainly a new departure in the provision of farm credit. It is not my intention to embark on a general discussion of agriculture or its credit requirements. Furthermore I do not intend to deal at length with the submissions made by the hon. member for Qu'Appelle and the hon. member for Burnaby-Coquitlam, but I do wish to deal briefly with the remarks made by the minister earlier today.
I was very disappointed at the very brief explanation he gave respecting the application of details envisaged in this measure. I hope he does not misunderstand me; I do not criticize him for being brief, but he ought to be criticised for introducing what could prove to be a very important piece of legislation, what I have already described as a new de-

parture in farm credit, and then failing to give us any of the details of the mechanics of its operation. The only alternative left is to wait until we get the bill and make a detailed examination of it at that time.
The sharing of equipment with others is a well established practice in western Canada. The minister says the intention is to set up a $25 million revolving fund to provide the capital required by the provisions of the bill which this resolution precedes. He also mentioned that it is intended to provide up to 80 per cent of the cost of the machinery purchased by the syndicates that will be established, and one of the obvious deficiencies in the minister's explanation was what he meant by a syndicate.
We have no idea what the requisite terms will be for the incorporation of these syndicates. The minister said they would include three or more farmers; but when we are dealing with legislation to provide a maximum of $75,000 to each syndicate we have a responsibility to protect the public purse in respect of that which is guaranteed by it, in other words to see that we have a reasonable level of security for this extension of credit.
If I may digress for a moment, the minister mentioned the establishment of an interdepartmental board of review for farm credit. We are entitled to a more detailed explanation of this board's functions, of what matters will be referred to it, of what is intended to be reviewed, whether it is the whole field of farm credit, including the Farm Credit Corporation, the Farm Improvement Loans Act, this measure when it becomes law, and whether it will also take into consideration other sources of credit for agriculture available from provincial governments and private concerns?
To return to the resolution, it is fair to say that the sharing of equipment has some historic credence in Canada. I remember many years ago when one, two or three threshing machines took care of the threshing for a whole community. Generally speaking, one tractor and threshing machine were able to look after the needs of 10 to 15 farmers, so it is not a new concept that one piece of equipment will do certain operations for more than one farmer.
When agricultural land was first being settled in the west it was also a rather common practice for large, steam powered breaking equipment to go around communities and do a lot of custom work. Such a piece of equipment was far too heavy and expensive for an individual settler to buy, and in many cases
Farm Machinery
there was almost what one might call a cooperative purchase of such machinery. Also in the case of smaller pieces of equipment, such as crushing and grinding equipment for preparing livestock feed, which was used only a few days a month, or in some cases a few days a week, it was not uncommon for a few farmers to co-operate in the purchase of that equipment.
Mention was made this evening about the possibility of this measure interfering with what is commonly known in the west as custom work, done by those people who make a business of doing work such as seeding or harvesting for so much per acre or so much per hour. I do not believe this legislation ought to be intended to provide credit facilities that would interfere with such a valid, useful and legitimate business.
There is a much more important matter that needs attention, the matter that has been referred to by every previous speaker. It is the matter of equipment costs, and in this connection I am talking about the whole operation of farms in Canada today. Earlier this session we were told by the Minister of Agriculture, and other people also have similar statistics, that in western Canada equipment costs including acquisition, repair and depreciation amount to about 50 per cent of the total operating costs of farming operations in the three western provinces. We should direct our attention to this matter and do something about these tremendous costs of equipment.
We should also bear in mind, so far as custom work is concerned, that finding operators is often as difficult as finding machines at the busy season of the year, and that custom work operators usually have experienced operators who are willing to move on from operation to operation at harvest time.
I do not intend to speak at length this evening, but I wish to say there are several categories of equipment that could usefully be purchased by several farmers, such as heavy trucks used by livestock farmers and grain farmers. For that matter, there are other types of farming operations in western Canada which from time to time require the use of heavy trucks. Trucks are required in the spring for brief periods for hauling seed to be cleaned, ready for planting. They are required at harvest time. They are required to carry stock to market, and so on. But I think it is correct to say that most of these heavy trucks are standing idle in farmers' yards more than 90 per cent of the time. This is

Farm Machinery
one piece of equipment which is very important when you need it. But a farmer does not need it for very long. Thus it seems to me it is a piece of equipment which could properly be purchased under the terms of the bill before us, in spite of the fact that a motor truck is not confined to the category of farm equipment. The minister has not yet indicated whether or not the measure will be limited so as to apply only to certain specific pieces of equipment, but I hope that if this is the case motor trucks will be included in the list.
Perhaps the next most expensive pieces of equipment used on the farms of western Canada-indeed, in some cases they are the most expensive-are grain combines. However there is a problem here, because most of the grain within a community ripens at the same time and some arrangement would have to be worked out among members of a syndicate as to whose crop should be harvested first. Most members from western Canada who are experienced with the problems caused by wet weather at harvest time realize there is always a possibility of differences arising between the members of a syndicate in this regard. I would point out that in the southern region of Alberta this fall, the harvest is already 45 per cent to 50 per cent complete as far as threshing is concerned; a lesser amount as one moves north. If farmers had the services of a heavy combine for a matter of a week it could, on occasion, gather up a grain harvest sufficient to pay for its cost. A few weeks of inclement weather might mean the loss of a whole crop. This would be the problem, though I do not think it is insurmountable: Who would use this equipment first, when weather conditions permit it to be used?
Heavy tillage machinery is another item which no doubt will be considered. In this case, as compared with harvesting, timing is not so delicate and the deterioration or loss of value if the operation cannot be carried out at a particular moment is not so important. Then there are types of equipment designed to handle specialized crops. I think of equipment for harvesting sugar beets, for example. Anyway, if there is to be a specified list of the machinery which can be purchased under this measure I think we are justified in asking the minister to provide such a list. Moreover, he should be willing to accept suggestions for additions. In my own riding and, indeed, throughout southern Alberta there is a need today for a very heavy piece of equipment which could break the prairie, prepare a seed
[Mr. OlsonJ
bed and actually seed tame grass in some of the submarginal land. I do not know whether such a machine is in existence, but it would necessarily have to be a very heavy and costly piece of equipment. One farmer would not have any use for it over an extended period of time; he might want to prepare a few acres of land each year to ensure correct grazing rotation. I bring this up as an example; there are many other specialized pieces of equipment required in connection with other farming operations in various parts of Canada.
In closing, I wish to ask a number of specific questions which I hope the minister will answer, either when he closes this debate on the resolution or when the bill comes up for second reading. First I should like to know what will be the requirements facing these corporations or syndicates. There is clearly some need to protect the guarantees which are to be made by the public purse; a need to see that the machinery will be maintained so that the undepreciated value will always be higher than the unpaid balance of the credit, as well as to make sure that there is some continuity of the syndicate after the money has been expended. Then I should like to know, as I have already indicated, whether the eligible equipment is to be specified. I have already dealt with that point. The third question I should like to ask is this: What are the anticipated terms of repayment? Will the arrangement follow the lines of the Farm Improvement Loans Act or of the administrative provisions applied by the Farm Credit Corporation, with extended terms? Or will there be a variable schedule of repayments to match the estimated depreciation of the machine or machines which have been purchased?
There is another question which I am sure the members of these syndicates will be asking. What security, what personal guarantees will be required from the farmers who form themselves into these groups? This was not dealt with by the minister in his opening observations today. If we could have answers to the questions I have raised I believe we would be in a far better position to discuss intelligently some of the practical applications of this measure as it moves to its further stages.


Clément Vincent: Mr. Chairman, I would like to put a question to the hon. member who just yielded the floor.

Can he tell us where he has taken his figures, when he mentioned the $75,000 maximum?
All day, I have listened to speeches delivered either by the Minister of Agriculture (Mr. Hays), or by members, and 1 have not heard of any maximum for such loans.

Is there a special pipeline between the government and the hon. member?


Horace Andrew (Bud) Olson: I did not hear the last part of the question.


Clément Vincent: Is there a special pipeline through which the hon. member receives information from the government, and which we could tap?


Horace Andrew (Bud) Olson: I think there were some suggestions in the press during the past weeks mentioning the figure I put forward as a maximum. With regard to the comment about a pipeline, I should like to tell the hon. member that I have enjoyed very good cooperation from the members of the present government as I did from members of the government when his party was in office about a year and a half ago.


Gilbert F. Rondeau: Mr. Chairman, my turn has come to make some remarks about the resolution now before us.
The hon. members who spoke before me talked mostly about their respective riding or province; we heard mostly about the western provinces and the usefulness of that resolution for the prairie farmers.
That resolution is meant, as explained by a number of hon. members, to allow some groups of farmers to get together in order to be able, on behalf of their group, to purchase machinery under the new loans which will be granted when the bill which will follow this resolution has been adopted.
However, in the remarks he made this afternoon, the Minister of Agriculture did not say anything which could lead us to believe that in the near future the price of farm machinery would decrease thanks to grants from the federal government or a tax cut, for instance the repeal of the 11 per cent tax which has also affected in its own way the price of farm machinery.
Nothing was said about reducing the cost of farm machinery. But, I recall that in 1949 or 1950, a farmer had to pay from $1,800 to $2,000 for a new tractor, with all the necessary
Farm Machinery
farming attachments. Today, we would pay between $5,000 and $6,000 for such a tractor. It means that the cost of that equipment increased by 300 per cent over the past 15 years.
However, as I have just mentioned, nothing in the act, as it now stands, suggests that the price of farm machinery sold to farmers will be lowered. Instead of lowering prices, we want the farmers, who have to suffer the consequences, to get organized, to form a syndicate or a group of three to buy what one man could afford 15 years ago.
Mr. Chairman, before I took the floor, some hon. members have discussed the practical effects which this resolution will have in their respective riding or province.
We realize, on examining this resolution, that its object was commendable and that those who have prepared it or are encouraging it are surely well intentioned.
But let us look at it in a practical way. It may be practical in some provinces, I have no doubt about that and I am not discussing that point. But as far as agriculture in eastern Canada is concerned, when we come to think of the type of machinery which the farmers will be able to buy through co-operatives under the existing legislation, we realize that this legislation will be almost unworkable in that part of Canada.
Farmers cannot get together to buy a milking machine, for instance, because if they did, they would have to milk their cows at different hours. Perhaps they could manage it but it would go against the cows' nature.
Farmers will not be able to agree either on the purchase of a litter carrier through a syndicate because such a machine is a fixture in the building and therefore, cannot be lent to other farmers.
There are also the hay balers for the storage of hay. Everyone knows, especially in the province of Quebec, that our farmers have been the victims of bad weather for the past few years. When the weather is nice for a few days all the farmers are in a hurry to use their machines to store their hay on time. Consequently, farmers could not get together under this legislation to purchase a single hay baler.
Now, if four or five farmers take advantage of this bill to buy a piece of machinery they will be joint owners and there will be trouble when the time comes to use the machine. On the other hand, when a farmer is the sole owner of a machine he is independent and works when it is convenient; he can make

Farm. Machinery
arrangements with his client as to the day on which he will go and work for him on his farm.
I am looking at the practical side of this legislation. I see that the Minister of Agriculture is laughing. Perhaps it is practical for western Canada to have a combine for five or six farmers, but in the east of the country I certainly cannot see the practical aspect of this measure. I do not deny the good intentions of the minister, but I look forward to reading the bill to be able to say what will be the practical aspect of the proposed legislation.
Can people organize a syndicate in order to buy a tractor? It is impossible. Nowadays a tractor is used daily on our farms. People certainly cannot organize a syndicate to buy one.
Let us analyse our farm situation and see which farm implements we need. The minister should analyse the situation in order to know if it is possible, from the practical viewpoint, to apply such legislation.
I do not deny the good intentions of the Minister of Agriculture, but it would be much wiser and more useful if the minister would introduce as soon as possible measures likely to enable our farmers to get farm machinery at a cheaper cost, so that they might, allowing for the changing weather in the east, do their work at the convenient time.
If five or six farmers are to use the same machinery in eastern Canada, I do not see the practical aspect of such a system.
I think that those who really know the farm problems of Quebec will agree with me when I say that the aim of this resolution is a worthy one, but I am anxious to hear the Minister of Agriculture explain to us the practical side of this legislation.
And now, Mr. Chairman, we are impatiently waiting for this bill to be made available to us.
A lot was said about our farmers' prosperity which is made much of especially at election time. But if today our farmers cannot buy machinery for themselves, they will be able in the future, not because of their prosperous situation but rather because of the farm crisis, to unite to get the machinery which a few years ago each was buying to meet his own needs.


James Elisha Brown: Mr. Chairman, I am delighted with this bill. I was glad to hear the hon. members for Qu'Appelle and Burnaby-Co-quitlam state that they thought it would help somewhat to reduce farm costs. As

the hon. member for Qu'Appelle said, if it helps to reduce these costs a little bit, it will be worth while, and will be well worth supporting. Mr. Chairman, I am not a farmer and so I am no expert in these matters; but I am anxious to see bills of the kind that the resolution speaks of coming before the house, because these are matters which should be of great assistance to those who follow agricultural pursuits in this country. I trust that the bill will greatly assist groups of farmers. The resolution refers to syndicates and I hope this will be of assistance to cooperative movements and, as a result, to the general enhancement of farming in other provinces, in these crucial days for our farming population. Like the hon. member for Burnaby-Coquitlam, I trust that this legislation will help the small farmers to band together in order to rise above the cost-price squeeze in the purchasing of equipment.
Mr. Chairman, the purchasing of farm machinery by syndicates composed of farmers is, of course, of assistance to the farm implement business, a business which has been the backbone of industrial life in the city of Brantford, Ontario, over the years. Today in Brantford we have a new farm implement plant which is one of the largest, if not the largest manufacturing plant of its kind in North America. Speaking both for the farming population and for those enterprises engaged in manufacturing of farm equipment, I cannot but be enthusiastic about this resolution. Mr. Chairman, I shall look forward with keen interest to studying the bill.


Hugh Macarthur Horner: Mr. Chairman, I have been looking forward to the time when this legislation was presented to the house. I hope the minister will not think this is a complete answer to the agricultural problems of today, because it is not. I should like to point out several things in respect of the cost of farm machinery, of which he may or may not be aware.
First of all I should like to suggest that if as a result of this kind of legislation he thinks he is going to reduce the cost of farm machinery to the individual farmer, he is having a pipe dream. If it has that effect I will be pleased, but I do not think it will. I have some very definite views in respect of how, if he has any desire to do so, he can reduce the cost of farm machinery to farmers all across this country.
Several years ago members of parliament spent a great deal of time accumulating several thousand pages of evidence in respect

of the cost of producing farm machinery. That committee on agriculture, after its detailed study, made certain recommendations, the main one being that the committee should continue to study the problems and look at what was being done by other countries today in relation to the cost of farm machinery.
Mr. Chairman, so far as the resolution and the minister's statement are concerned, I am of the opinion that very little will be done to reduce the cost of farm implements. We have just heard the hon. member for Brantford speak in support of this piece of legislation, and I wonder whether it is going to be more beneficial to the manufacturers of farm machinery than to the farmers. Perhaps that is a good question and one deserving of an answer. Before we accomplish anything in respect of solving the difficulties relating to the cost of farm implements-and I should like to remind the minister that costs incurred by farmers are increasing all the time, while the farm income picture is not rosy- we will have to take more definitive steps than proposed at this time.
We are greatly concerned about what the minister and his cohorts intend to do in respect of rising costs in relation to many farm products including the cost of raising cattle and producing grain, because we are vitally concerned with these difficulties. I suggest one of the ways by which costs incurred by farmers could be reduced is by government leadership in the field of standardization. For the last two or three years I have had a private member's resolution on the order paper in respect of this situation. I believe that if we are going to accomplish anything in this field of standardizing the costs of farm machinery parts we must have leadership from the government. Parts must be standardized before any reduction in costs will be realized, and although there has been a slight step in this direction, we have a long way to go. Farmers complain mainly about the cost of repairs to farm implements. They are familiar with capital costs of machinery, and figure these costs into their over-all plans; but the high and unforeseeable cost of repairs is hurting them badly.
One reason for the high cost of repairs is the lack of standardization in respect of parts. I believe a system of standardization should be set up under the authority of a three man board, one appointed by the farm organizations, one by machine manufacturers and one by the government, and this board could work towards standardization of as many parts as possible. I appreciate that this would involve
Farm Machinery
great difficulties, and that we must continue to maintain private enterprise in the manufacture of farm machinery if we are to keep up to date and make progress in the development of agricultural technology; but we must be able to compete with the rest of the world in agricultural products, if we are to keep this industry healthy, and we certainly should not allow costs of repairing farm machinery to rise out of all proportion. I suggest that the minister give some consideration to my suggestion in respect of standardization when drafting his next bill to assist farmers. This will be difficult, but I think we should make a start by establishing a three man board to look into the situation with a view to gradually bringing farm implement parts under a standardization policy.
Mr. Chairman, the hon. member for Burn-aby-Coquitlam made a suggestion in respect of repair depots. I am not a socialist and do not believe in his theory that we should nationalize the farm machinery industry, and that is what his agriculture minister suggested to the agricultural committee of the Saskatchewan legislature. He suggested that we nationalize the farm machinery industry and do away with private enterprise in this field. I am wondering how the hon. member for Brantford would feel about that sort of proposition put forward by the hon. member for Bumaby-Coquitlam when he was the premier of Saskatchewan.


William Arnold Peters: He might not find it any different having civil servants in the Brantford machine factory.


Hugh Macarthur Horner: The hon. member for Timiskaming was also a member of our committee and expressed that same attitude. I intend to also refer to some of the other suggestions made by that committee in respect of the cost of farm machinery.
The hon. member for Burnaby-Coquitlam referred also to the fact that labour productivity had increased and that this was not the reason for the increased cost of farm implements. Of course one must realize that one of the conclusions of that committee was that there was a difference of opinion expressed by witnesses in respect of labour productivity compared to the increase in wages. I do not feel competent to deal with the finer economical points of this argument, but there was a considerable difference of opinion expressed by labour unions and management in regard to whether or not the increase in wages could be compared favourably or otherwise to the increase in produc-

Farm Machinery
tivity, or whether in fact increased wages did contribute to the increased cost of farm machinery. I appreciate that the increases in wages were justified and that labour has the right to an improved standard of living, just as do farmers and others, but I do not believe that the nationalization of the farm machinery industry will cut costs incurred by farmers. As I have stated, I think a standardization policy would do much toward that end.
Second, I should like to point out that the majority of farm implements are not manufactured in Canada, unless that factory in Brantford is now engaged in this field. At least in the years 1961 and 1962 there was not one tractor manufactured in Canada. These companies, Massey-Harris, International Harvester, John Deere and Case are international farm machinery companies. They manufacture their machinery in the country where they can find the lowest costs, and they sell their machinery in countries like Canada for what the market will bear, with no regard to their costs. The then general manager of Massey-Ferguson admitted this to the committee when he said in answer to the hon. member for Kent (Ont.) that "market conditions here establish the price of equipment in this market". He went on further to tell us point blank that what they charged farmers in Canada had nothing to do with their costs.
Many years ago the entry of farm machinery into Canada was made available to farmers on a free trade basis, without duty. So we set the stage for these international companies to build their machinery in the country where they could find the lowest standard of living and the lowest labour cost, so that they could then sell their machines in countries like Canada at prices set on the basis of what the market would bear. This is what the general manager of Massey-Ferguson admitted before the committee.
If we really want to do something about the cost of such machinery to the farmers of Canada we have to have regard to the fact that Massey-Ferguson manufactures all its diesel tractors in Coventry, England. If a Canadian farmer wanted to do so he could travel to England and buy an identical tractor from a dealer there for several hundred dollars less than the price for which he could buy it from a Canadian dealer.
Here is the crux of the situation. If we are going to lower the cost of some of this machinery we are going to have to say to these manufacturers that if they want to continue

to enjoy duty free entry of their product into Canada they must sell it to our dealers at a price equivalent to the price at which they sell it to dealers in the country of origin. Our farmers cannot even buy machinery manufactured in the United States from a dealer in Canada at the same price as they could if they went to the United States and bought the same machine from a dealer there. Why is this so? Because our farmers have been suck-ered into a deal where they are paying what the market will bear.
If we want to do something about the cost of farm machinery, let us have a look at the situation which makes it possible for these international companies to operate in this way. Massey-Ferguson puts forward the proposition that they are really a Canadian company because they have their head office here, but most of their manufacturing is done outside of Canada and most of their sales, of course, are also made outside of Canada. These international companies have taken advantage of the free trade situation and in my opinion have in fact conspired to set prices in Canada at what the market will bear. What in fact are Canadian farmers doing? They are paying for the cost of erecting factories in low labour cost countries. If we want to do something about the cost of farm machinery, then let us say to these people that if they are going to bring in tractors from England they must treat their dealers in Canada in the same way as their dealers in the country of origin. If they did so the price of tractors would come down tomorrow by $400 to $500, far more money than the farmers will save as the result of anything contained in this resolution.
I am sure the minister is aware that a year ago the Alberta legislature set up facilities so that farmers could get together in groups to buy farm machinery. This plan has been operating for a year and I believe, subject to correction, that there are seven such groups now operating in the province of Alberta under a similar sort of arrangement to what the minister is now trying to set up. I wonder whether the minister's department has got in touch with the department in Alberta to see how their plan is working. My understanding is that it is working very well for certain types of machinery, but that in the case of harvesting and seeding equipment it does not work very well.
I have spoken to some of those in the group in the Camrose area where they have a farm machinery co-operative and my information is that machinery such as land

levellers, caterpillar tractors and feeding and grinding equipment is ideally suited to this kind of approach but, as a Creditiste member mentioned, what about tractors? A tractor has to be readily available if maximum benefit is to be derived from its use.
If we want to reduce the price of farm machinery we have to do more than is envisaged in this resolution. We have to proceed with a standardization program. I believe we should take the best parts of Saskatchewan's program and institute it on a national basis. I think there should be national standards with regard to warranties because the most common complaint I have had from farmers in my area with regard to farm machinery is not that the dealer would not do anything for them but that the company would not stand behind the warranty. The farmer could not return the machine if he was not happy with it and had nothing but trouble with it. This applies to some of our larger farm machinery companies, even if their head office is in Canada.
These people have had a good market in Canada for their product, and while I appreciate they have provided some jobs in cities such as Brantford, Toronto and Hamilton the number of jobs that the farm machinery companies have really provided have not been that many. Therefore they should think about doing more manufacturing in Canada, particularly in view of the fact that they have had free access to the market here and have set their prices here without regard to their costs. All we say is that our farmers should be able to buy the same tractor for the same price that a farmer has to pay for it in the country of origin, and I am taking into consideration freight and everything else. I know what I am talking about because I had a friend who was going to Scotland price a Massey 35 diesel for me, and if he had purchased it he could have saved $600, even taking into account the cost of shipping the tractor to Canada.
Surely it would be a simple thing for the Minister of Finance to say to these people: You will no longer have free entry into our market unless you show us that you are making this machinery available to our farmers on a basis comparable to that on which you make it available to farmers in the country of origin. This is not restricting trade. This is making sure that these companies do not make suckers of Canadian farmers.
There are one or two other things I wanted to say with regard to the type of machinery
Farm Machinery
that might be worth while under a program such as the minister has outlined. Again I say that this program can be of some little help, particularly with regard to the clearing of land. It seems to me that would be an ideal situation for a group of farmers to get together to buy land clearing machinery, and in my area this is vitally important. I hope the minister will make allowances for this in the bill and that he will not exclude large caterpillar tractors, large breaking plows, large diskers and so on that can be used in clearing and breaking new land, particularly in those areas where there is good arable farm land available.
I also think that the best way to proceed with the bill, once we have it, would be for the minister to refer it to the standing committee on agriculture for its consideration. Many members on this side of the house and some on the other side took part in previous committees which spent some time studying the problem of farm machinery costs. I think the minister should take advantage of their knowledge by submitting the bill to the standing committee on agriculture. I believe that in this way we could hammer out a bill with which we would all be happy and which would be really effective. There have been many questions asked by hon. members who have already spoken. Who is going to qualify? What kind of machinery is going to be available under this legislation? All of these things, of course, so far are merely the subject of conjecture.
The hon. member for Medicine Hat apparently had some word from someone that $75,000 was the amount which would be made available to each syndicate. This is a lot of money, but I can say that in an area such as mine in which clearing and breaking equipment is required, it is not going to be enough. I do not know whether or not the hon. member has a pipe line to the minister's office, but these are some of the problems that could be thrashed out in the committee. Perhaps if the committee were to meet in camera we could hammer out a bill that would be effective, and which would help the farmers right across the country to a greater extent than some superficial bill that will be the subject of so many regulations that it will not be effective. I understand that the farm credit officers are going to administer this measure. If this is correct, then I agree with it. I think this is essential. This is one of the things for which we fought when I pointed out to the minister that he

Farm Machinery
was being pushed around by the justice department in connection with the naming of solicitors.
The idea of having a farm credit officer out in the area is one which we brought about. We think this is a worth-while idea. This is the kind of work such an officer can do, along with his farm credit work. He can supervise some of these applications from these syndicates and find out what they are doing. I feel this is an excellent idea-if it is the idea.
I come back to one other point, and that is the question of regulations. We have to make sure we are not just passing another piece of paper. We have to make sure this is going to work. As I said in connection with the Farm Improvement Loans Act, that measure will not be of assistance if the banks will not lend the money. This type of legislation is fine; it looks good. It will help a few farmers, but I have a suspicion it is going to help the larger farmers who can find $5,000 to go into a syndicate. What is it going to do for the poor little farmer who cannot find $300 or $400 to go into a syndicate which will buy machinery? How is it going to benefit these people?
We will be looking forward with interest to the bill which will be following this resolution. I hope the minister will follow our suggestion that the bill be referred to the standing committee on agriculture and colonization, so that we can hammer out a bill which would be a first step toward the effective reduction of farm machinery costs. I hope also he will give consideration to the two areas with which I have been concerned, namely standardization and the importation of equipment from low labour cost countries. According to their own admission, these companies have charged whatever the market would bear. I ask him, along with his colleague the Minister of Justice, to look at whether or not these companies are in fact in breach of the combines legislation in their pricing policies on farm machinery. I refer particularly to machinery which is manufactured in other countries, and this covers the majority of farm machinery now used in Canada. If we really want to do something about the cost of farm machinery, here is an area in which we could save our farmers a great deal of money and in which we may even be able to provide additional jobs by manufacturing machinery in Canada.


Clément Vincent: Mr. Chairman, I have a few comments to make about this resolution.
First, I must say that the measure the government is bringing forward today is still but

a pebble in the ditch separating the pitiful income of the farmer from a reasonable income.
I should like to quote what the Minister of Justice (Mr. Favreau) said on television on August 23, 1964:
Never, since 1956, has parliament done so much legislative work in so little time.
Those were the words spoken by the Minister of Justice on August 23 of this year.
On the other hand, on other occasions we have heard the same minister tell us that we were carrying on a filibuster.
Despite all those measures referred to by the Minister of Justice, we have yet to see a concrete one really designed to help the eastern farmer.
For several months we have been hearing about the legislation now before us. Yet, it was put on the order paper only on September 14 last, that is only yesterday. What the minister stated this afternoon does not give us much information on the bill which will be brought forward after the passing of this resolution.
I expected that the minister would give us some information that would enable us to see whether this new legislation would at least put a little stone in the trench separating the farmers' pitiful income from a reasonable revenue.
Now, what would be the maximum amount allowed for that organization or co-operative mentioned in the said resolution? Will it be $75,000? That amount was mentioned by an hon. member a few minutes ago. Will the maximum amount be larger or smaller? We would have liked the minister to tell us.
Moreover, the Minister of Agriculture told us that this agency or co-operative would be made up of three or more members. Now, I wish to point out that in this resolution nowhere is the word farmer used. Maybe it is the intention of the minister, at this time, to eliminate completely this word in future legislation.
As far as I am concerned, even if I am still a farmer, I am not in the least ashamed of it. But it is to be noted that the resolution does not mention that those three persons must be farmers. I think, therefore, that a farm machinery salesman could, for instance, form a syndicate, which would be quite easy for him, for he would only have to ask two other persons, who are farmers, to form this syndicate with him, and after a while, he could sell his share to another farmer. In the meantime he would have sold a lot of farm machinery, and in six or eight months

he could set up the same scheme and form another group or syndicate. As I said before, how are we to know if only farmers or producers of farm products will form such groups.
Now, if such a group is an organization, a co-operative or a syndicate composed of three members, could three brothers who have formed a farm corporation, owning the same farm, the same livestock, organize such a syndicate or co-operative? That is another question I have asked, and I believe that under the circumstances it would serve a good purpose if three members of the same family could form such an organization or syndicate.
Here is another point I immediately thought of when I read the resolution and after hearing the statement of the Minister of Agriculture: What would be the rate of interest charged on loans made to those organizations? Would it be higher than the rate now charged under the Farm Improvement Loans Act or would it be the same as the rate accepted by the present government on loans over $7,500 made under part 3 of the Farm Credit Corporation Act?
Now, what will be the method of reimbursement? Over how many years will the repayment of loans granted to those syndicates be spread? We would have liked the minister to clarify this point when he spoke on the resolution earlier. I think we would have passed through this stage more promptly so that he might ask his officers to make the necessary corrections to the bill and submit it to us afterwards as soon as possible.
There is a further question several of us are asking themselves: Why will this act be administered by the Farm Credit Corporation instead of by chartered banks, as is the case with the Farm Improvement Loans Act?
I approve the Department of Agriculture for having entrusted the implementation of this measure, the provisions of which I do not know yet, to the Canadian Farm Credit Corporation, because I know several advisers of this corporation and I am aware of their wide experience in the preparation of such loans, and I am convinced that they will be able, by working in agreement with their advisers throughout all the provinces, to deal with this measure which is highly prized by the farmers; they have, in many areas, efficient advisers who will be able to welcome and advise the farmers who are anxious to set up syndicates.
Farm Machinery
I should like to take this opportunity to say to the minister that it is very nice, indeed, to introduce pieces of legislation to enable farmers to purchase farm machinery, but it is even more important to be able to advise farmers in such a way that they will not engage in a series of commercial operations they may be sorry for in a few months or years. If, in a given area, the farm counsellor takes time to pay the necessary attention to farmers who want to unite in a group and to give them appropriate advice by explaining to them the best way to organize themselves, I think the Farm Credit Corporation will play a part which will be beneficial to all farmers in this country.
When a group of farmers wish to form a syndicate or a co-operative to buy machinery, they must necessarily know the operating cost per hour of work of a combine for instance. I am unable to tell you what it is, but the farmer must know. If the Farm Credit Corporation has those figures, the farmers can meet its farming counsellors and establish their program before buying machinery they would then know the annual rate of depreciation, the interest charges and the method of reimbursment, and they could make their purchase accordingly.
I know that we will resume consideration of all these questions when we study the bill.
But before reading the bill I should like the Minister of Agriculture to give me a few answers, so that I will not have to move amendments to this bill when it is brought before us.
As the hon. member who spoke before me said a moment ago, it would have been preferable for this bill to be submitted to the committee on agriculture and colonization, so that every member informed by the advice of officials of the department could express his idea in order to hammer out the best possible legislation.


Edward Nasserden: Mr. Chairman, no matter has come before the House of Commons of as much importance to the agricultural industry as that of the cost of farm machinery. About six months ago I listened to the minister addressing the municipal convention in Regina. I recall the plateau he was on at that time, and the forecast he made of the inroads that would be made into the problem of farm machinery costs, and his forecast of what the government would do to attack that problem. If this resolution is the result of all the intervening months' work, then I for one am sincerely disappointed.

Farm Machinery
When I say that, I do not intend to indicate that this is a useless measure in itself; but if it is the sum total of all those months of study, and of the long hard look that was taken at this problem, then it is a weak and pale measure indeed.
The hon. member for Shefford indicated his belief that this would be a more useful measure for farmers in western Canada than for those in other parts of the country. I am inclined to agree with him. In fact I am inclined to go a little further and say it will be of more benefit to the larger farmer than to the smaller farmer who, for the past several years, has been the chief concern of governments both at the provincial and federal level. I am interested in this word "syndicate". I wonder why it is used in this resolution, and whether it will be used in the bill. I wonder whether this measure envisages the setting up of simple co-operatives for the purchase of machinery they require. If this is so, why does the minister not want to use the word accepted in most farm communities across Canada, rather than the word "syndicate" which is before us at the present time.
There is one other question I should like to raise. In the last several months, particularly the last five or six months, the Minister of Agriculture has indicated a desire to get the provinces to bring in legislation supplementary to the legislation he proposes-legislation which, I take it, is encompassed by the measure now before us. I should like the minister to tell us whether he has been successful in securing commitments or indications from any of the provinces that they are willing to bring in legislation which will complement or supplement the legislation envisaged in the resolution before us.
I think back to the inquiry into the cost of farm machinery which was undertaken by the government several years ago, when we were sitting on the other side of the house. I recall the frustration some of the members of that committee felt as they questioned the officials of certain of the companies which came before the committee at that time. One member who spoke today in the debate said we took no action on the recommendations of that committee during the last few months during which we were in office. I cannot allow that observation to pass without making reference to the determined obstruction mounted by members opposite, who then formed the official opposition, obstruction which prevented the government from completing many of the courses upon which it bad embarked in its first years of office.

I know the minister is a learned man in many ways and that he keeps in close touch with what is happening in the business world in Canada. I suggest he take a look at what has happened to the value of Massey-Harris shares in the last few years. This will give him some indication whether or not an inquiry into the cost of farm machinery should now be undertaken for a second time, and proceeded with. No one can deny that the situation has changed, even since the inquiry which was held some two years ago.
The fact that these arrangements are to be under the supervision of the Farm Credit Corporation brings up the question of the interest rates to be charged on these loans to farmers. I want to tell the government that if in the bill they propose to bring before parliament there is a further erosion of the principle which was embodied in the Farm Improvement Loans Act as it existed before the present administration came to office, this will be another step along the road which will raise instead of lowering the cost of loans to farmers across this country. I notice that certain people have been taking notes, and I hope the minister and his officials will take note of that observation. I trust we shall not have to rise when the bill is brought forward and oppose it on that ground, at least.
Another matter which was mentioned briefly by an earlier speaker this evening concerned the nature of the syndicates or cooperatives themselves. As I mentioned, in western Canada Canadian Co-operative Implements Limited has been operating for some years. This organization was set up in an attempt to reduce the cost of farm implements, and it is a fact that in the past two years dividends from the company have amounted to between 10 and 12 per cent. This immediately raises the question as to the nature of the syndicate or co-operative or other form of company which would be set up to make possible the purchase of machinery in accordance with the provisions of the bill to be laid before us. Dividends will be forthcoming to the purchasers, and there must be some basis upon which these dividends can become the equity of those to whom they belong.
Another problem which concerns farmers in this regard has to do with warranties, and this too has been mentioned by an earlier speaker. In Saskatchewan I believe the leader of the New Democratic party indicated his belief that the problem had been licked or, at any rate, that an effort had been made to solve it. I can assure the committee that

this is far from the truth. Farmers on the prairies today are having a difficult time with the implement companies as far as warranties are concerned. Many of the machines coming off the assembly lines now are not proven. But farmers who find them unsuitable for the operations for which these machines were purchased are often unable to return them to the manufacturers when it is apparent they are not performing satisfactorily.
A word now about parts. As I recall it, when the inquiry into the cost of farm implements was under way the implement companies presented what seemed to many of us a very fair case with regard to the parts carried for the farm people. But this still remains one of the problems facing those who buy machinery-the fact that parts of many of these machines are not as readily available as they should be, even for new machines. This is particularly damaging when a replacement part is needed at seeding time, or during the harvest or in the course of some other urgent farm operation.
I am disappointed in this resolution and in its terms. If this is supposed to be the answer the government has to the high price of farm machinery I can only say it is a poor substitute indeed for legislation which could have accomplished its purpose more effectively. It will help only a limited number of people, in many cases people who would otherwise be able to secure the credit they need from other sources-and I am not referring to those sources which are charging 12, 14 and 16 per cent. I know the minister has been anxious to create the impression that he intends to do something for agriculture. We on this side like to think he is sincere in that desire. But when I look at this resolution I cannot see very much in it which will enhance the prospects of the agricultural community of Canada. In so far as agriculture is concerned, it is one of the weakest resolutions that has ever been brought before the parliament of this nation, when one compares its limited extent with the promises that were held out, almost on a daily basis, from one end of this country to the other by the Minister of Agriculture. In view of this, sir, all I can say is that if the bill follows the terms of this resolution, it will be a shocking dereliction of duty, in so far as the promises that were made to the farmers across this country are concerned.
I say that it is particularly shocking to those in eastern and central Canada, and the smaller farmers in other parts of Canada,
Farm Machinery
who will find this legislation almost useless to them in their struggle to beat the cost-price squeeze that today engages the attention of farmers across this country. I am sure the minister and his officials have been taking notes during this discussion, and perhaps this point has occurred to them already; but I would hope that grain handling,, grain storage and grain cleaning equipment would also be included in the definition of "farm machinery" when the definition is decided upon. I do not think I have anything, else to say at this time, Mr. Chairman, except that I hope the bill is much better than the resolution would indicate.


Mr. Horner (Acadia):: Mr. Chairman, I and many other members of this house have been greatly interested in this proposed piece of legislation, perhaps because the minister has gone across the country talking about it and saying what it would do to the agricultural economy. I think at one time he said it. would revolutionize the agricultural economy of this country. We have been waiting anxiously for this measure to be introduced, f have a brief clipping from a Lethbridge newspaper away back in April, when the minister made a statement in Lethbridge and said, "Farmers, wait". Well, Mr. Chairman,, this house has been waiting since that time, and at last this measure is on the order paper and is before us.
In Lethbridge in the spring the minister said he could not supply any information with regard to what he envisaged would be in the bill, and he did very little better when introducing it at the resolution stage. He failed to enunciate what he meant by the word "syndicate". An hon. member asked,. "Does it mean three farmers or more? Can it be two farmers and their sons who are already operating farms?" We really do not know. What does it apply to; what does the minister mean by the words "farm machinery"?
I can remember that a couple of years back I had quite an interesting discussion about the terms "farm implements" and "farm machinery". What do these terms include? I could ask, for example, will they include feed mills, and a syndicate opening and starting to operate a feed mill for the purpose of feeding their own livestock? Will it cover those people who are going to be in the business of dealing with livestock or buying livestock? I hope the minister will consider these points before bringing in the bill. The resolution says:

Farm Machinery
-the terms and conditions of such loans, the amount of a loan not to exceed 80 per cent of the actual price to the farm machinery syndicate-
What does the minister mean by "farm machinery"? Does he mean that the provisions of the bill will apply only to machinery, and not to livestock? Certainly anybody in the feeding business knows that he can put his own money into livestock and put the government's money into the feed mills, corrals, and the feed distribution system, which has become highly automated in the last five years in particular.
Perhaps the most one can say for this resolution, as it has been devised by the minister, is that it is his hope of doing something for the farmers. But whom will it help? Will it help the grocery growers, the food manufacturers, or just the plain farmer? Will it help the wealthy farmers, or will it help those who need help the most?
Some years ago when we were on the other side of the house we implemented the Farm Credit Corporation, or revised the old farm loan board. It was a well established fact that the old farm loan board only helped those who did not really need it, who had financial backing to help themselves. We established the Farm Credit Corporation under the principle of helping those who needed help; in fact, one who had already established himself on an economic unit could not obtain a loan from the Farm Credit Corporation. During this session quite recently we saw some erosion of this principle; we saw the Farm Credit Corporation granting loans up to $40,000 and $55,000, when it was a well established fact that anybody obtaining a loan of $40,000 from that corporation should at least have collateral equalling $40,000.
Now we have before us a proposal that is going to be operated by the Farm Credit Corporation, and the provisions of the bill will mean that loans will be granted to syndicates. I do not know what the minister thinks of farmers. From his definition, or his evasion with regard to the word "farmer" I am led to believe that he has perhaps been ashamed of being called a farmer all his life, and has been trying to find a new name for himself. Personally, Mr. Chairman, I am not ashamed of the name "farmer" and I have always been proud to be proclaimed as one. But the Farm Credit Corporation was set up with the basic principle of helping those who needed help most. Now, however, we find that the Farm Credit Corporation is helping those who need it the least. Certainly any farmer, or any ten farmers in

any part of Canada would not like to be called grocery growers and would hate to be called a syndicate. I am sure farmers would view that title with some scepticism, to say the least. In this resolution we fail to see any definition of the words "farmer" or "syndicate". Would it include a lawyer, for example, who is practising a law business but also operates a farm on the edge of town? Would this measure allow him to go into the feeding business, for example? This is, of course, occurring in many areas of Canada.
Mr. Chairman, may I call it 10.30?


Guy Favreau: Mr. Chairman, if the committee had a disposition to give this bill first reading tonight-and I sense that it has- we might be disposed not to see the clock and let the hon. gentleman complete his interesting remarks. In that event, we might give the bill first reading.


Francis Alvin George Hamilton: Mr. Chairman, I think it might facilitate the speed with which the house deals with this measure at the resolution stage if we could get some answer from the government as to whether this brand new legislation will go before the standing committee on agriculture and colonization. That committee is not holding any meetings now and would be free to give this legislation a detailed examination outside the house, and therefore the house could go on with other business.


Harry William Hays: Mr. Chairman, we have given this bill a great deal of consideration. We realize that after the bill has been in operation for possibly a year some parts of it will perhaps need amending. But it is important, I think, in so far as farmers are concerned, and I believe that after hon. members of the committee see the bill they will agree with this. I have listened very carefully to all the questions that have been asked this evening, and I think they are all answered in the bill. I do not think one question has been asked that is not answered by one of the clauses of this bill. Mr. Chairman, I also should indicate that I have discussed this proposed legislation with all of the ministers of agriculture of the ten provinces of Canada, and they have indicated they think this is an excellent bill.


John (Jack) Henry Horner: Who do you say thinks this is an excellent bill?


Harry William Hays: I have discussed it with all ten of the provincial ministers of agriculture of Canada, and they agree with me that there

are no specific items of machinery not covered, or that will not be covered by the legislation. Be that as it may, I think we could go ahead and accept the resolution tonight, then have the bill presented, which I am sure is selfexplanatory.


John (Jack) Henry Horner: Mr. Chairman, I intend to continue my remarks or call it ten thirty.


Guy Favreau: Mr. Chairman, it is my suggestion that we allow the hon. member to complete his remarks so that we might be in a position then to give the bill first reading. In view of the importance of this legislation I am sure all hon. members are interested in seeing the bill, so as to be in a position to discuss it more thoroughly at the second reading stage.


Thomas Clement (Tommy) Douglas: Mr. Chairman, there is little value in doing that unless we know this is the last speaker. There may be other speakers, and by sitting for an extra 20 minutes or half an hour only to find that there are others would be useless.


Guy Favreau: Mr. Chairman, if I am not too
much out of order perhaps I could ask the members of the opposition parties present whether there are any others who intend to speak at this stage, and if there is an indication that this is the last speaker I am sure we would all be interested in listening to him so that we may receive this bill and make some real headway.


John (Jack) Henry Horner: Mr. Chairman, I do not know whether there are any other speakers to follow me, but I do know I have ten or twenty minutes left which I intend to use, and if the committee is good enough to stay and listen to me I will complete my remarks. I might say that I asked for permission during the flag debate to speak longer than my allotted time and it was not given. Those members on the opposite side seem to have had a change of heart. I will gladly forgo my further remarks at this time if the minister will state that this whole question in respect of farm machinery will be referred to the agriculture committee, and that representatives of farm organizations, machine companies and other interested parties will be heard, so that we will have a better idea of what is envisaged by this legislation.


The Acting Chairman (Mr. Batten):: Is it
the wish of the committee to allow the hon. member to continue?
Business of the House


John (Jack) Henry Horner: Mr. Chairman, if I am right, I must have unanimous consent in order to continue past ten thirty.


Herman Maxwell Batten: Is it
the wish of the committee to continue?


Mr. Monteith:: It is ten thirty.
Progress reported.



CANADIAN FLAG


Mr. J. E. Walker (York Centre) moved:: That the special committee on a Canadian flag appointed September 10. 1964, be composed of Messrs: Batten, Cadieux (Terrebonne), Deachman, Dube, Flemming (Victoria-Carleton), Mrs Konantz, Langlois, Lessard (Lake St. John), Macaluso. Mathe-son, Monteith, Pugh, Rapp, Ricard and Scott.
He said:	In moving this motion, Mr. Speaker, I hope the house will allow me to assure the members of the special committee on a Canadian flag that they have the good will of their parliamentary colleagues, and our full confidence in their sincerity, integrity and patriotism. We wish them well in their arduous and historically important task.


[Stage Direction]
Motion agreed to.

Gordon Minto Churchill: May I ask the house leader whether we are to carry on tomorrow with the two resolutions now in front of us?


Guy Favreau: Mr. Speaker, tomorrow we will carry on with the business as announced yesterday and try to complete-I hope we will-the resolution stage of the farm machinery syndicate bill. I might try to communicate with the house leaders to find out whether it would not be possible to complete the other stages of that bill tomorrow. I am not prejudging any issue, of course. I say that, in view of the importance of the measure as already stated by the Leader of the Opposition.
We will then take the resolution preceding the crop insurance bill, to be followed by the continuation of the debate at the committee stage of the redistribution bill. I should like to say that beginning Thursday, as announced, we will be taking estimates. The order will be that already announced, that is the Department of Transport to be followed by northern affairs, public works and citizenship and immigration.
I should like to advise the house that in view of a commitment of the Minister of Transport, the consideration of the estimates

Business of the House
of the Department of Transport will be limited will proceed on Friday with those of north-for this week to Thursday only, although I em affairs, followed by the departments I hope they will be completed on that day. have just announced.
However, if we have not completed the esti- At 10.40 p.m. the house adjourned, without mates of the Department of Transport we question put, pursuant to special order.

Wednesday, September 16, 1964