1964-07-13

Mr. Richard Cashin (St. John's West):: Mr. Speaker, my question of privilege is as follows. Does the publication of an article in the July 11 edition of the Toronto Telegram constitute a breaking or crossing of picket lines, in view of the fact that this paper is now being picketed; and does this now mean that the hon. member for Port Arthur (Mr. Fisher) has dissociated himself from the Canadian Labour Congress?



HEALTH AND WELFARE


Hon. Paul Martin (Acting Prime Minister):: Mr. Speaker, I wish to table copies of the letters that have been received from five provincial premiers, the premiers of Manitoba, Alberta, British Columbia, Nova Scotia and Quebec, as requested the other day by the hon. member for Winnipeg North Centre. I have taken the liberty of sending copies to the right hon. gentleman and to the other leaders for their convenience.



JUDGES ACT


Hon. J. Watson MacNaughl (for the Minister of Justice) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency: That it is expedient to introduce a measure to amend the Judges Act to authorize the provision of salaries for seven additional judges as follows:
(a)	three judges of the superior court of Quebec;
(b)	one justice of appeal of the supreme court of Alberta;
(c)	two Ontario county court judges; and
(d)	one British Columbia county court judge.


[Stage Direction]
Motion agreed to.


John Watson MacNaught: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the National Parks Act to authorize the governor in council to add from time to time crown owned lands to existing national parks; to provide new legal descriptions for certain national parks and in the case of Waterton Lakes and Prince Albert national parks to provide for the withdrawal of small tracts of land no longer required for park purposes; to provide for certain additions to Mount Revelstoke park, to Riding Mountain park and to Georgian Bay Islands park; to provide also that the governor in council may set aside as a national park of Canada, lands in the area of Kejimkujik lake in the province of Nova Scotia and the conditions therefor; and further to make certain changes in connection with the administration of the act.


[Stage Direction]
Motion agreed to.


Hon. Walter L. Gordon (Minister of Finance) moved: that the house go into committee forthwith to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to facilitate the making of loans to students at a post-secondary school level by providing for payment out of the consolidated revenue fund, to a bank making such a loan, of interest thereon accruing while the borrower continues to be a student and for a period of six months thereafter and by guaranteeing payment of the principal amount of the loan and of interest thereon accruing after the expiration of that period; to provide for the authorization of loans in any province by a provincial authority designated for that purpose and for the making of compensatory payments out of the consolidated revenue fund to any province having its own plan of student loans, that does not designate a provincial authority for the purpose of authorizing loans in that province under the said measure; and to provide further for the payment out of the consolidated revenue fund of certain costs of administration and for other related or incidental matters.
Motion agreed to and the house went into committee, Mr. Lamoureux in the chair.
S364	HOUSE OF
Farm Improvement Loans Act


The Chairman:: Order. The house in committee of the whole on a certain proposed resolution concerning loans to students. Shall the resolution carry?


Mr. Douglas:: Mr. Chairman, there was agreement that we would not debate this resolution, but I thought the minister would probably make a statement on it. Does he prefer to make it on second reading of the bill, Mr. Chairman?


Walter Lockhart Gordon: I would sooner make the statement on second reading, Mr. Chairman.


Mr. Diefenbaker:: Mr. Chairman, this is another example of further co-operation. I must say that since the Secretary of State for External Affairs has been Acting Prime Minister, as a result of his attitude there has been a remarkable improvement in reactions generally.


Mr. Gregoire:: Mr. Chairman, we agree to let the resolution pass without debate. However, we want it to be known that it is passed on division, since we are opposed to this federal intrusion into a field under provincial jurisdiction and we shall make our comments on second reading, when the bill is available.


Lucien Lamoureux: Shall the resolution carry on division?


Some hon. Members:: Carried.
Resolution reported on division and concurred in.
Mr. Gordon thereupon moved for leave to introduce Bill No. C-110, to facilitate the making of loans to students.
Motion agreed to and bill read the first time.



FARM IMPROVEMENT LOANS ACT


Walter Lockhart Gordon: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Farm Improvement Loans Act to increase from $7,500 to $15,000 the maximum amount of any loan that may be made under the act to a borrower together with any amount owing in respect of other guaranteed farm improvement loans, to increase from $400 million to $500 million


the aggregate principal amount of guaranteed loans that may be made in the three year loan period ending June 30, 1965, to provide for a further three year loan period ending June 30, 1968, and to provide that the aggregate principal amount of guaranteed loans that may be made in that period shall not exceed $700 million.


[Stage Direction]
Motion agreed to.

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

Mr. Latulippe: 1.	How many lawyers in the constituency of Compton-Frontenac, have worked for or represented the Department of Justice since April 22, 1963?
2.	Who are these lawyers, what work did they do in each case, and what fees were paid to them?


Mr. Macdonald:: 1. Two.
2.	J. A. Drouin, Q.C., two prosecutions under the Excise Tax Act, $66.
Lacourciere & Lacourciere, two prosecutions under the Income Tax Act and two prosecutions under the Excise Tax Act, $95.


JUSTICE DEPARTMENT MOTOR VEHICLE PURCHASES, QUEBEC
[Stage Direction]
Question No. 1,147 (Additional) -Mr. Latulippe:
1.	How many vehicles did the Department of Justice buy in the constituencies of Compton-Frontenac, Beauce, Megan tic, and Sherbrooke In 1961-62-63?
2.	Were these purchases made following public tender calls?
3.	Who tendered in each case, and what was the amount of the tender?
4.	Which tenders were accepted?
5.	Are maintenance, repairs and gasoline and oil for these cars obtained through tender?
6.	Who is in charge of these activities, and what amounts were spent in 1961-62-63?
Answer: (Supplementary) The answer to this question, insofar as it relates to the Royal Canadian Mounted Police, is as follows:
1961: Compton-Frontenac, 1; Beauce, none; Megantic, none; Sherbrooke, 2.
1962: Compton-Frontenac, none; Beauce 1; Megantic, none; Sherbrooke, 1.
1963:	Compton-Frontenac, none; Beauce,
none; Megantic, none; Sherbrooke, none.
2.	No.
3.	1961: Compton-Frontenac, F. R. Dallaire Inc., $1,557.40; Megantic Auto Parts Inc., $1,564.58; Megantic Auto Parts Inc., $1,583.46; Roy Automobiles Inc., $1,814.29.

Sherbrooke, De Luxe Automobiles Ltee, $1,575; Martin Motor Sales Ltd., $1,580.73; Cyr Automobiles Ltee, $2,108.70.
Sherbrooke, Martin Motor Sales Ltd., $2,061.92; Cyr Automobiles Ltee, $2,158.70; De Luxe Automobiles Ltee, $2,200. 1962; Beauce, Cliche Auto St-Georges Inc., $1,396.01; Fernando Veilleux, $1,407.65; Garage National Inc., $1,623.60.	
Acquisition of motor vehicles Constituency	1961
Compton-Frontenac	$1,557.40
Beauce	Nil
Megantic	Nil
Sherbrooke	$3,636.92
Maintenance of motor transport Constituency 1961	
Compton-Frontenac	$1,106.10
Beauce	$1,004.96
Megantic	Nil
Sherbrooke	$2,689.48

Mr. Laiulippe: 1.	How much did the 1962 riot at St. Vincent de Paul cost the government and for what purposes was money spent?
2.	How many inmates were transferred as a result of the riot?
3.	What new security measures were taken as a result of the riot?
(a)	Direct costs
Demolition and construction Replacement of:
Equipment Materials
Industrial revolving fund materials Canteen revolving fund materials Replacing officers' personal losses Legal fees
Special office services Payments to neighbouring municipalities for use of firefighting equipment Ambulance services Medical services, injured inmates
Questions
Sherbrooke, Cyr Automobiles Ltd., $2,206; Martin Motor Sales Ltd., $2,368.45; De Luxe Automobiles Ltee, $2,450.62.
4.	The lowest tender in each case.
5.	No.
6.	Chief purchasing agent, Royal Canadian Mounted Police headquarters, Ottawa.
Year	
1962	1963
Nil	Nil
$1,396.01	Nil
Nil	Nil
$2,206.00	Nil
Year	
1962	1963
$ 883.79	$1,401.75
642.95	955.79
Nil	Nil
$2,692.45	$2,751.38
4.	What new working conditions, recreational and vocational training facilities have been established?
5.	How many guards have been dismissed or transferred to other positions as a result of the riot?
6.	Did the municipality where the prison is located ask the government for special measures as a result of the riot?


Donald Stovel Macdonald: 1. The 1962 riot at St. Vincent de Paul cost the government the sum of $2,357,043 spent for the following purposes:

16,784	$1,320,704

Questions
(b)	Indirect costs (consisting of new facilities and services designed to improve the institution's standard to an acceptable level and whose need was accentuated by the riot and fire)
New facilities	606,715
New services	429,624	1,036,339
* Grand total	$2,357,043
*Includes $643,000 submitted for construction in 1964-65.
2.	One hundred and ninety one inmates were transferred as a result of the riot.
3.	The new security measures taken as a result of the riot are as follows: (a) The construction of chain link fences to enclose outdoor exercise areas; (b) The construction of a cement block wall to enclose the segregation area; (c) The construction of chain link divisions on all elevated cell walkways; (d) The construction and manning of an additional watch tower; (e) The relocation of one watch tower; (f) The construction and manning of two additional watch cages in cell blocks No. 1 and 2; (g) The relocation and enlargement of the watch cage in the central dome; (h) The employment of 25 additional custodial officers; (i) The implementation of a refresher training program for all personnel with emphasis on discipline and security; (j) The reorganization and intensification of the custodial staff recruits training program; (k) The institutional staff has been reorganized in five sections, each of these sections placed under the supervision of senior keepers in charge of a sector of the penitentiary.
4.	(a) Seven industrial shops have been reconstructed; (b) Sports and games have been reorganized in two different exercise areas;
(c)	The school has been rebuilt and a preemployment training shop has been added.
5.	As a result of the report of the board of enquiry, there was not sufficient evidence justifying the dismissal of personnel. However, approximately ten custodial officers involved have resigned from the service after they had been made aware that their services were not satisfactory or that they did not possess the personal characteristics required for the efficient performance of their duties.
6.	No request for special measures as a result of the riot was received from the municipality of St. Vincent de Paul, province of Quebec, where the penitentiary is located.
IMr. Macdonald.]


RACIAL DISCRIMINATION IN UNIVERSITIES
Mr. Lalulippe: 1.	Has the Minister of Justice received any representations to the effect that some Canadian universities directly or indirectly encourage racial discrimination?
2.	Is the Department of Justice studying the possibility of requiring universities receiving federal assistance or loans to ensure that no student will be discriminated against in obtaining accommodation near universities?


Donald Stovel Macdonald: 1. No.
2.	This is not a matter coming under the Department of Justice.


JUSTICE DEPARTMENT EMPLOYEES, COMPTON-FRONTENAC CONSTITUENCY
[Stage Direction]
Question No. 1,18.9-Mr. Lalulippe:
What are the names of all those working for the Department of Justice in Compton-Frontenac and, (a) how long has each worked for the department (b) what fees have been paid to each since June 18, 1962?
Donald Stovel Macdonald: (a)	(b)
J. A. Drouin, Q.C. Lacourciere &	May 6, 1963	$66Lacourciere	July 15, 1963	$95Thomas W. Leonard	Oct. 9, 1963	$107Paul Veilleux	March 1964 work not completed


R.C.M.P. TENDERS FOR VESSEL, JOLIETTE-L'ASSOMPTION-MONTCALM CONSTITUENCY
Mr. Pigeon: 1.	Did the Royal Canadian Mounted Police call for tenders in the constituency of Joliette-L'As-somption-Montcalm for the purchase of a vessel and, if so, what are the names of the persons or firms who were invited to submit tenders?
2.	What prices were submitted by the tenderers?
3.	Does the government intend to accept the lowest tender?


Mr. Favreau:: 1. Yes, from the following firms: A. Blais & Fils Enrg., Joliette, Quebec; Normand Roy, Joliette, Quebec; Roger Goulet, Joliette, Quebec.
In addition, tenders were called for from the following firm:	Traveller Mfg. Co.,
Peterborough, Ontario.
2.	A. Blais & Fils Enrg., $750; Normand Roy, $866; Roger Goulet, $934.58; Traveller Mfg. Co., $727.
3.	The lowest tender has been accepted.


POST OFFICE DEPARTMENT
Mr. Douglas: 1.	What was the number of post office administrative personnel of all classes on January 1, 1959?
2.	(a) What was the total staff in methods and standards personnel on January 1, 1959 (b) how Is this staff broken down by classification and grade?
3.	What was the number of operating staff in the post office on January 1, 1959 (a) full time (b) part time (c) casual?
4.	What is the number of administrative staff today?
5.	What is the number of non-operational staff today (a) full time (b) part time (c) casual?
6.	What is the number of operating staff today
(a)	full time (b) part time (c) casual?
7.	How many part time and casual employees are there today receiving the hourly rate of (a) $1.75
(b)	$1.72 (c) $1.57 (d) $1.43 (e) $1.58 (f) $1.55 (g) $1.40 (h) $1.13?
8.	What was the mail volume for the year 195859 (a) first class (b) second class (c) third class (d) fourth class?


Mr. Nicholson:: The following answers include only the postal employees paid out of parliamentary appropriation, that is, headquarters, 14 district offices and 350 staff post
Questions
offices. The answers exclude employees in semi-staff and revenue post offices, who are paid out of postal revenue.
The word "administrative" is interpreted as applicable to headquarters and the district offices, but excluding the railway mail clerks. Although there are classes in the larger post offices which might be regarded as administrative, it is difficult to draw a clear line and therefore all employees in staff post offices are treated in these answers as operational.
1 and 4.	January 1,	March 31
	1959	1964
Headquarters	1,041	932District offices	739	856Total	1,780	1,788
2. (a) 25; (b) 1, postal superintendent; 2, technical officers 5; 8, technical officers 4; 14, technical officers 3.
3 and 6. "Operating staff" is interpreted to refer to all employees in staff post offices plus the railway mail clerks.
January 1, March 31, 1959	1964
(a) Fulltime	20,630	23,392(b) Part time	2,440	2,825(c)	Casual, see note following part 7.
5. In the post office department "nonoperational" is considered synonymous with "administrative" and is covered in the answer to parts 1 and 4. The number of part timers and casuals in this group is negligible.
7.	Regular part timers as at March 31, 1964:
Classification	Number
Letter carrier	175
Postal chauffeur	8
Postal helper	547
Postal clerk 2	1,729
Postal clerk 1	72
Mail handler	292
Typist 1	1
Telephone operator	1
Where two rates are shown, those who work during day hours receive the lower rate whereas night work calls for the higher rate.
Casuals: We have no breakdown by wages of the number of casual employees in the operating service since they are paid locally. The control by headquarters is primarily
Wage Rates $1.75 per hour 1.75 per hour
1.43	per hour
1.57 and $1.72 per hour
1.43	and 1.58 per hour 1.40 and 1.55 per hour
annual rate annual rate
through the dollar cost of casuals rather than the number. The number fluctuates daily. In the 17 largest post offices there was a total of 508 casuals in 1959 and 988 on March 31, 1964. In addition there was a small number of casuals in the smaller post offices but no record of these is maintained at headquarters.

Questions
8.	Volume of mail by classes (pieces): (a) First class, 1,983,942,753; (b) Second class, 546,748,782;	(c) Third class, 1,182,512,698;
(d)	Fourth class, 89,158,912.
The above figures for staff show the actual number of employees in contrast to the hon. member's question on related subjects last November which dealt with the number of positions. Usually the number of positions is somewhat greater than the number of employees due to delays in replacements; the difference varies from time to time.


ASSISTANCE TO EASTERN FARMERS
Mr. Maite: What assistance is given directly or indirectly by the Department of Agriculture to the farmers of eastern Canada?


Mr. Hays:: Department of Agriculture assistance to farmers in eastern Canada- 1964-65: In addition to the functions of the Department of Agriculture in the fields of agricultural research, production, marketing, and animal and plant disease control, the following are items of assistance to farmers of eastern Canada involving direct and indirect support, assistance and subsidy programs.
Price support programs: creamery butter, Cheddar cheese, skim milk powder, eggs, hogs, steers, sheep, lambs and wool, wheat, oats, barley, soya beans, sugar beets, flue cured tobacco.
Subsidy programs:	butterfat, milk and
cream, Canada first grade Cheddar cheese, casein.
Assistance programs: quality premiums on hog and lamb carcasses, premiums on high quality cheese, assistance in construction and reconstruction of cheese factories, compensation for animals slaughtered under provisions of Animal Contagious Diseases Act, grants to agricultural fairs, exhibitions and museums, grants to agricultural organizations.
Federal-provincial shared cost programs: premiums on purebred sires, contributions for livestock improvement, agricultural lime assistance, assistance in construction of potato warehouses, contributions for barberry eradication, crop insurance, contributions for payment of rabies indemnity, purchase of vaccine for control of brucellosis, freight assistance on livestock shipments to and from royal agricultural winter fair, grants to 4-H clubs.


ASSISTANCE TO WESTERN FARMERS
Mr. Matte: What assistance is given directly or indirectly by the Department of Agriculture to the farmers
of western Canada?


Harry William Hays: Department of Agriculture assistance to farmers in western Canada- 1964-65: In addition to the functions of the Department of Agriculture in the fields of agricultural research, production, marketing, animal and plant disease control, and rehabilitation, the following are items of assistance to farmers of western Canada involving direct and indirect support, assistance, and subsidy programs.
Price support programs: creamery butter, Cheddar cheese, skim milk powder, eggs, hogs, steers, sheep, lambs and wool, sugar beets.
Subsidy programs:	butterfat, milk and
cream, Canada first grade Cheddar cheese, casein.
Assistance programs: prairie farm assistance, see note 1. Quality premiums on hog and lamb carcasses, premiums on high quality cheese, assistance in construction and reconstruction of cheese factories, compensation for animals slaughtered under provisions of Animal Contagious Diseases Act, grants to agricultural fairs, exhibitions and museums, grants to agricultural organizations.
Federal-provincial shared cost programs: premiums on purebred sires, contributions for livestock improvement, agricultural lime assistance (British Columbia only), assistance in construction of potato warehouses, crop insurance, purchase of vaccine for control of brucellosis, freight assistance on livestock shipments to and from royal agricultural winter fair, grants to 4-H clubs.
Note 1: Western grain producers contribute to the prairie farm emergency fund through a levy of 1 per cent on value of all grain marketed through licensed elevators.


COST OF TRANSPORT DEPARTMENT AIRCRAFT
Mr. Mather: What was the cost in dollars of the Jet Star transport aircraft purchased for use by Department of Transport officials?


Mr. Pickersgill:: The Jet Star aircraft was not purchased for use by Department of Transport officials, but to provide the department with complete operational data and experience in civil jet aircraft, since these must be regulated by the department. Delivery of the aircraft was obtained in January 1962

Questions
Department of Public Works when the buildings were not yet completed?
2.	To whom was each contract awarded?
3.	When was each contract awarded and at what price, per square foot?


Mr. Deschalelels:: For the purpose of this question, it is considered that a contract exists when an officer of the Department of Public Works, being properly authorized to do so, advises the owner of the premises, in writing, that the department has accepted his proposal to rent a substantial portion of, or his complete building, to the government.
1.	Thirteen.
2 and 3.
Location and project	Owner	Date contract awarded	Price per square footPort Cartier, Que.- Post office-1,500 sq. ft	Mr. Gabriel Pelletier	. 27- 2-64	$ 3.75Vercheres, Que.- Post office-1,100 sq. ft	Caisse Populaire	. 2- 4-64	2.32Lambeth, Ont.- Postal station-2,000 sq. ft	Blendcraft Construction Co. Ltd...	. 28- 5-64	1.55Ottawa, Ont.- Postal station-7,600 sq. ft	Carlingwood Properties Ltd	. 14- 5-64	1.73.Toronto, Ont.- Post office-5,066 sq. ft	E. W. Dempster	. 15-11-63	2.54Victoria Harbour, Ont.- Post office-1,152 sq. ft	Mr. T. J. Bernard	. 29- 5-03	1.87Moosehorn, Man.- Post office-875 sq. ft	D. Ferguson	. 3- 2-64	2.20-Elbow, Sask.- Post office-800 sq. ft	L. A. Robbins	. 18-10-63	1.74Calgary, Alta.- Postal station-9,050 sq. ft	T. D. Barnes	. 11- 6-63	2.60'Spruce Grove, Alta.- Post office-1,100 sq. ft	Spruce Grove Development	. 5- 2-64	2.50Ottawa, Ont.- Depts. of Defence Production and Industry-96,420 sq. ft	Metcalfe Realty Co. Ltd	. 24-10-63	3.99Ottawa, Ont.- National Harbours Board-16,520 sq. ft....	Thomas L. Hum	. 21- 1-64	3.50Ottawa, Ont.- Dept, of Citizenship and Immigration- 200,000 sq. ft	Laurentian Realties Ltd	. 15-11 63	3.25NATIONAL CAPITAL COMMISSION	2. Has settlement been made to the owners ofEXPROPRIATIONS, OTTAWA	these properties and, if not, what offers have been
Question No. 1,376-Mr. Thompson:	made to the owners of these properties?
1.	When were the properties on lots 13, 14, 15	3' **ow are	values determined in making
and 16, concession 2, Ottawa front, expropriated settlement with owners of property expropriated by the N.C.C.?	by the N.C.C.?
and it is used for the evaluation and investigation of electronic aids to air navigation and associated landing systems. It is also used as available for the transportation of distinguished visitors to Canada and official flights of the Prime Minister and members of the government.
The cost of the aircraft was $1,136,000.


RENTAL CONTRACTS FOR BUILDINGS NOT COMPLETED
Mr. Grafftey: 1.	Since April 8, 1963, how many contracts for the rental of buildings have been let by the

Questions
4.	What Is the policy of the N.C.C. in servicing and maintaining expropriated properties which the original owners have vacated?
5.	Is service maintenance contracted out to private firms or individuals?
6.	How many N.C.C. employees in each of the trades are engaged in service maintenance of expropriated N.C.C. properties?
Answer: 1 and 2. Please see table below.
3.	In determining fair values of expropriated properties, the national capital commission secures data with respect to value from technical experts such as real estate appraisers, building contractors, soil experts, engineers with respect to machinery and equipment, and chartered accountants for business disturbance, cost of moving and other such claims.
Upon receipt of the foregoing information, the negotiators of the commission meet with the former owner or his agent to discuss elements of value peculiar to his property. This includes such things as loss of value of drapes, Venetian blinds, broadloom rugs, disconnecting of stoves, dryers, etc., the cost of moving or other costs occasioned by the expropriation.
When agreement is reached as to the amount of the compensation, an option setting forth the terms is prepared by the commission and signed by the former owner. This option is then considered by the land committee of the commission, which after viewing the property, makes recommendations to
the commission. The commission then may approve the option. If the amount exceeds $25,000, treasury board approval is also required.
4.	Policy of servicing and maintaining properties which the original owners have vacated.
These fall into four classifications:	(a)
Economic properties; (b) Uneconomic properties; (c) Buildings unfit for human habitation because of fire and health hazards; (d) Properties which must be cleared of buildings in order to carry out projects of the commission.
Generally, the buildings on economic properties are serviced and maintained to the same standard as if they had continued in private ownership. However, the standard of maintenance on buildings which do have to be demolished because of the requirements of major national capital commission projects does vary, since this depends on the date when the demolition is likely to occur.
Uneconomic or substandard properties are offered for sale for demolition or occasionally for removal, by public tender.
5.	Not entirely; a small amount is done by national capital commission staff.
6.	One truck driver and one tractor operator plus part time use of park maintenance crews on weed control.
		Area and Settlements		
Parcel No. and	date of	and	Remarksname of former owner	Description	expropriation	amount	G.N.O. 2-13-1	Pts. lots 13-14-15,	July 9, 1959	Nil	Compensation in the amount of $414,700Elmer Henry	con. 2, O.F., Nepean	332 acres	has been discussed.G.N.O. 2-14-1	Pts. of lots 14-15,	June 22, 1959	Nil	(An information has been filed in theDr. H. B. Moffatt	con. 2, O.F., Nepean	95.9 acres	Exchequer Court of Canada in the amount of $180,000)G.N.O. 2-14-1A	Pts. of lots 14-15,	June 13,1961	Nil	Dr. H. B. Moffatt	con 2, O.F., Nepean	7.0 acres	G.N.O. 2-15-4	Pt. lot 15, con. 2,	June 13, 1961	Yes	Ottawa Jewish Home for the aged	O. F. Nepean	12.2 acres	$37,500	G.N.O. 2-15-6	Pt. lot 15, con. 2,	June 13,1961	Yes.	John Craig Moffatt	O.F., Nepean	2.3 acres	$27,000	G.N.O. 2-16-2	Pt. lot 16, con. 2,	June 13, 1961	Yes	Mary Rose Whiting	O.F., Nepean	1.6 acres	$38,500	G.N.O. 2-16-3	Pt. lot 16, con. 2,	June 13, 1961	Yes	George B. Acres	O.F., Nepean	3.3 acres	$45,750	G.N.R. 3-35-1	Pt. lot 16, con. 2,	Dec. 13, 1960	Nil	(Compensation in the amount ofR. A. S. Bruce	O.F., Nepean	69.3 acres	($350,000 has been discussed for 200 j acres, of which these properties are aG.N.R. 3-35-1X	Pt. lot 16, con. 2,	June 13, 1961	Nil	Ipart.R. A. S. Bruce	O.F., Nepean	1.8 acres	

Questions
SILVER DOLLARS	* THREE RIVERS, QUE. AIRPORT

Question No. 1,382-Mr. Peters:
1.	What action is contemplated by the government to ensure an adequate supply of silver dollars in the current year?
2.	How many silver dollars have been minted to date in 1964?
3.	How many silver dollars is it anticipated will be minted for the year 1964?
4.	How many silver dollars are in mint sets, how many as singles for currency?
5.	How many ounces of silver have been consumed in the production of silver dollars to date during 1964?


Mr. Pennell:: 1. From now until the end of the year, the Royal Canadian Mint expects to produce approximately three million silver dollars which will be issued to the Bank of Canada for circulation. This figure will be increased if the present demand for the smaller coin denominations moderates.
2.	4,137,937 silver dollars have been struck to June 26. Of these, 3,267,807 were issued to the Bank of Canada for circulation and 870,130 were sold to numismatists and general public.
3.	9,000,000.
4.	During 1964 it is expected that 2,838,387 silver dollars will have been used in mint sets and separately for numismatic purposes; 6,161,613 will have been issued to the Bank of Canada for circulation.
5.	2,482,762 ounces fine silver to June 26, 1964.


ADJUSTMENT STATEMENTS FILED BY CHINESE, TORONTO
Mr. Wahn: 1.	How many persons of Chinese origin have filed adjustment statements, (i.e. statements to adjust their irregular or illegal status) at the Toronto immigration office during the 1960 calendar year and each subsequent calendar year to date?
2.	If any of the adjustment statements above mentioned have been proved false, how many such false statements were there for each of the calendar years above mentioned?


Mr. Badanai:: 1. The numbers of persons of Chinese origin who filed adjustment statements at the Toronto immigration office in the calendar years 1960 and 1961 was 62. Separate figures for 1960 and 1961 are not available. The figures for the number of such persons who filed these statements at the Toronto immigration office since 1961 are: 1962, 233; 1963, 434; 1964, 312 (first five months).
2. These statements are being accepted as veracious. None have so far been proven false.


Mr. Marcoux: 1.	In what year was the Three Rivers airport built?
2.	What did it cost to build the runway?
3.	What did it cost to construct the terminal building?
4.	In what year was the T.C.A. service established at Three Rivers?
5.	What does it cost to maintain T.C.A. personnel at the Three Rivers airport?
6.	What is the cost involved each time a T.C.A. plane stops at Three Rivers?
7.	What is the daily average number of passengers making use of T.C.A. flights to or from. Three Rivers?


Mr. Caniin:: 1. Started in 1960, serviceable 1961.
2.	Construction costs and materials and engineering, approximately $700,000.
3.	The building was constructed by the city of Three Rivers.
Regarding parts 4, 5, 6 and 7, the management of Trans-Canada Air Lines advises as follows:
4.	1963.
5.	$26,000 per annum.
6.	Additional flying costs and landing fees incurred each time a Viscount aircraft stops at Three Rivers approximate $50.
7.	(a) Average number of passengers boarded for Three Rivers, 3.2 per flight, (b) Average number of passengers boarded from Three Rivers, 2.4 per flight.


MINISTERS' OFFICE ASSISTANTS OUTSIDE OTTAWA
Mr. Marcoux: How many persons employed In the offices of ministers were stationed outside Ottawa; what are their names; where was each one stationed; and what salary did each receive (a) from 1956 to 1957 (b) from 1957 to 1963 (c) from 1963 to 1964?


Mr. Mcllraiih:: No detailed records were maintained which make it possible to report with certainty the numbers of persons employed in offices of ministers and stationed outside Ottawa prior to 1963. Subject to this comment and so far as available records indicate the following is the information requested.
(a)	During the years 1956 to 1957 or part of them, five persons employed in offices of ministers were stationed outside Ottawa. They were: L. P. Corkum at Lunenburg as clerk 4 to Minister of Public Works at $3,720; Mrs. A. Desmarais at Montreal as assistant private secretary to Postmaster General at $3,660;:

Questions
Miss Mary Agnes O'Toole at Montreal as secretary to executive to Minister of Transport at $3,510; Miss L. Paul-Hus at Montreal as stenographer 3 to Secretary of State at $3,360; Mrs. I. M. Vrooman as stenographer 3 to Minister of National Health and Welfare at Windsor at $3,360. There is also a possibility that H. A. Munro, executive assistant to the Minister of Fisheries, may have worked for part of a two month period in 1957 at Vancouver, though it is doubtful whether he was "stationed" at Vancouver.
(b)	During the years 1957 to 1963 or part of them, 11 persons employed in the offices of ministers were stationed outside Ottawa. They were: Mrs. L. Arnold at Hamilton as assistant private secretary to Minister of Citizenship and Immigration at $3,870; Norman A. Bolduc at St. Giles, P.Q. as clerk 4 to Minister of Defence Production at $4,020. It is believed that Mr. Bolduc normally was stationed three days each week in St. Giles and two days each week in Ottawa; Miss M. E. A. Chabot at Montreal as stenographer 3 (secretary) to Associate Minister of National Defence at $3,870; R. C. Gurr at Brandon, as principal clerk to Minister of Northern Affairs and National Resources at $4,620; Miss J. Lacroix at Montreal as clerk 3 to Postmaster General at $4,350; Mrs. F. Mann at Fredericton as stenographer 3 to Minister of Forestry at $3,660; Gerald Masse at Mont Laurier as assistant private secretary to Secretary of State at $4,000; L. H. Nickerson at Fredericton as associate private secretary to Minister of Veterans Affairs at $4,680 and later as head clerk to Minister of Forestry at $5,940; H. L. Ritcey at Middleton, N.S., as assistant private secretary to Minister of National Revenue at $3,660; Nick Roth at Regina as assistant private secretary to Minister of Agriculture at $4,020; Solange Vezina at Montreal as assistant private secretary to Secretary of State at $3,150.
(c)	At various times during the years 1963 to 1964 or part of them, 17 persons employed in the offices of ministers were stationed outside Ottawa. Of this group, 15 persons are at present employed full time and one person part time. The names of the 17 persons are: W. F. Armstrong at Vancouver as head clerk to Postmaster General at $6,030; Miss J. Austin at Vancouver as typist 2 to Minister -of Northern Affairs and National Resources at $3,180; J. L. Bergeron at Montreal as clerk 4 to Minister of Justice at $4,260; Mrs. A. Can-zanese at Toronto as stenographer 2 to Minister of National Defence at $3,150; J. A. E.

Cournoyer-Morin at Montreal as assistant private secretary to Minister of Public Works at $4,710; P. Dequoy at Montreal as clerk 3 to Minister of Public Works at $4,200. Mr. Dequoy's resignation was effective June 2, 1964; J. L. Ferron at Sorel as stenographer 2 to Associate Minister of National Defence at $3,600; Mrs. Anna Frost at Niagara Falls as principal clerk to Minister of National Health and Welfare at $5,220; Ghislain Gravel at Quebec city as special assistant to Minister of Citizenship and Immigration at $10,000; Mrs. Alison Hinchey at Bathurst as stenographer 2 to Minister of Fisheries at $3,150; Mrs. Blanche Larose at Montreal as assistant private secretary to Secretary of State at $4,950; Miss E. Long at Vancouver as stenographer 2 to Postmaster General at $3,450; E. C. McCrory at Montreal as clerk 1 to Minister of Industry and Defence Production at $2,730; Mrs. Rose Pelletier at St. Boniface as part time secretary to Minister of Veterans Affairs at $2,000; Miss L. St. Jacques at Montreal as clerk 2 to Minister of Public Works at $3,120; Mrs. M. V. T. Therrien at Sorel as stenographer 2 to Associate Minister of National Defence at $3,150; Miss S. D. White at Vancouver as clerk 3 to Minister of Northern Affairs and National Resources at $4,200.


FISHING RIGHTS OF MEMBERS OF EUROPEAN COMMON MARKET
Mr. Lambert: 1.	What is the nature of the declaration made by the Minister of Fisheries with respect to the increased activities of European fishermen, as a result of the modernization of harbour and other facilities for fishermen on the islands of St. Pierre and Miquelon?
2.	Have negotiations been entered into between Canada and the six nations of the common market with respect to fishing rights and/or the activities of fishermen of those nations?
3.	Has the government of Canada received protests from any of the governments of the common market nations either on an informal or formal basis?
Answer: 1. The Minister of Fisheries stated in the standing committee on marine and fisheries that we have no specific information about the intentions of the French government with regard to the modernization of harbour and other facilities at St. Pierre and Miquelon islands, but that should there be any interference in Canadian waters, this would be a matter of negotiation between Canada and France.
2. The only two countries of the European common market with whom we are negotiating are France and Italy.

3. Seeing that we are negotiating with these two countries, the question of protest does not arise. We have had no communication with the other countries of the European common market.


CANADIAN COINAGE AND CURRENCY
Mr. Mather: What is the total amount of money, coinage and currency, in Canada?


Lawrence T. Pennell: The following figures taken from the June 1964 edition of the Bank of Canada statistical summary were applicable as at May 27, 1964:
(Millions of dollars)
Currency outside banks
notes	1,788
coin	203
Chartered bank deposits 14,992.


ENLARGEMENT OF ROYAL CANADIAN MINT
Mr. Rynard: Is any consideration being given by the government to enlarging the premises of the Royal Canadian Mint to take care of greater demands for Canadian coins and also of requests for the manufacture of coins from other countries?


Lawrence T. Pennell: Yes.


DREDGING PROGRAM, FLOWERPOT ISLAND, ONT.
Mr. Loney: Is it the intention of the Department of Public Works to proceed with a modified dredging program at the entrance to Flowerpot island, Ontario?


Jean-Paul Deschatelets: A sounding survey of the harbour at Flowerpot island has recently been completed by the department at the request of the Department of Northern Affairs and National Resources. A dredging program is now under consideration.


OWNERSHIP OF TELEPHONE SYSTEM, WELLAND CANAL
Mr. Danforth: 1.	Who owns and operates the telephone system for interoffice and interstructure communication on the Welland ship canal?
2.	Up to the present time, has the service work for same been done by employees of the St. Lawrence seaway authority?
3.	Is a change in this regard now contemplated and, if so, for what reason?


John Whitney Pickersgill: The St. Lawrence seaway authority advises as follows:
1.	The St. Lawrence seaway authority.
2.	Yes.
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3. Yes; a contract is being negotiated with the Bell Telephone Company of Canada, for reasons of (1) efficiency and (2) economy.


IMMIGRATION AND EMIGRATION, 1958-1963
Mr. Balcer: How many immigrants came to Canada in 1958, 1959, 1960, 1961, 1962 and 1963 and how many of them emigrated to the United States or elsewhere after learning a trade in this country?


Hubert Badanai: The numbers of persons admitted to Canada as immigrants annually from 1958 to 1963, inclusive, are: 1958: 124,851; 1959:	106,928; 1960:	104,111; 1961: 71,689;
1962: 74,586; 1963: 93,151.
The number of these who emigrated to the United States or elsewhere after having learned a trade in this country is unknown.


TAX ON PRODUCTION MACHINERY AND BUILDING MATERIALS
Mr. Sienson: 1.	Since June 12, 1963, how much has the Department of National Revenue received from the (a) tax on production machinery (b) tax on building materials?
2.	Is this tax collected monthly, quarterly or yearly?
3.	How much of an increase in the department's staff was there when this tax was levied?


Mr. Benson:: 1. Information not available. Sales tax returns are not filed nor recorded according to commodities.
2.	Every person required to pay sales taxes is required to make each month a true return of his taxable sales for the last preceding month. In the case of taxable importations, the tax is payable at the time of entry.
3.	There has been no increase in the establishment of customs and excise division as a result of the above taxes.


TAX EXEMPTION FOR MORTGAGE INTEREST AND MUNICIPAL TAXES
Mrs. Jones: Is there at present any contemplation on the part of the government to aid and encourage Canadian homeowners by exempting mortgage interest and municipal taxes from taxable income?


Lawrence T. Pennell: Representations on this
matter, as well as on a wide range of other tax subjects, will be studied during the preparation of the next budget.


REMOVAL OF TAX ON DRUGS
Mrs. Jones: Will the government consider the removal of the tax on drugs, which constitutes an additional burden for those who are ill?

Inquiries of the Ministry


Lawrence T. Pennell: Representations on this matter, as well as on a wide range of other tax subjects, will be studied during the preparation of the next budget.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs, and ask him whether he has noted that the figures now accepted in the United Kingdom in the Manchester Guardian, and in the United States in the weekend issue of the New York Times, are that some 4,000 Greek troops clandestinely landed in Cyprus. Is he now in a position to place before the house and the country the record in this regard, as shown to be confirmed in the United Kingdom and in the United States, under the circumstances and in the periodicals referred to? Will he also tell the house what transpired during the call on him by the Turkish ambassador on Friday afternoon, and was there on the part of the Turkish ambassador anything in the nature of a diplomatic protest?


Paul Joseph James Martin: Mr. Speaker, with regard to the first part of the question there are, as I said last week, different assessments of the infiltrations, and these are now being examined by the United Nations. Until such time as the final assessment has been made I think it is not desirable that I should go beyond what I have already indicated in the house.
The Turkish ambassador came to see me on Friday. There was no protest. I do not believe it is desirable to reveal the nature of discussions between a foreign minister and an ambassador, but I can say that while this matter was generally discussed, no protest was made by him.


John George Diefenbaker: A supplementary question, Mr. Speaker, and I am keeping within limits that are fair and proper. Was there any suggestion by the Turkish ambassador that there was in fact no foundation for the view expressed by the minister in the house that Turkish troops have infiltrated?


Paul Joseph James Martin: I think it is fair to say that as far as the ambassador was

aware the implication of the general observation I made on Friday was not known to him.


John George Diefenbaker: One other supplementary question, Mr. Speaker. In view of the situation in Cyprus, will the minister now inform the house whether an appointment will be made so that members of the house may discuss it, not in committee but actually as a matter of transcendent importance to Canadians as a whole?


Mr.   Marlin@Essex East: I fully agree with the right hon. gentleman that this is a matter of transcendent importance. I assure him that the suggestion is one that is very much in my mind, and just as quickly as I believe it desirable I shall certainly advise my right hon. friend.


Thomas Clement (Tommy) Douglas: supplementary question, Mr. Speaker. In view of the fact that the landing of both Greek and Turkish troops on Cyprus is a violation of the security council resolution, has the United Nations made any representations to the governments of those two countries and has it secured from either or both an assurance that, first, there will be no further landing of troops and, second, that the troops who have landed will be withdrawn?


Mr.   Marlin@Essex East: Mr. Speaker, there already has been an appeal, made last Thursday, by the secretary general of both the allegedly involved countries, and the secretary general has made it known that he will report the results in that regard to the security council. I should say that we were advised this morning that the Turkish foreign office has denied the suggestion that was made. However, I believe I should wait until such time as the secretary general has spoken.


Thomas Clement (Tommy) Douglas: A further supplementary question, Mr. Speaker. Is it correct that the R.C.A.F. has been put on alert for a possible evacuation of the Canadian troops from Cyprus? Is this being done in conjunction with the United Nations, or is it merely an emergency provision against any unfortunate circumstance which may develop?


Mr.   Marlin@Essex East: I will ask my colleague to reply.


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, as I have already indicated to the house, the department is fully aware of its responsibilities to the Canadian contingent and we have kept their interests in mind.


Thomas Clement (Tommy) Douglas: The question I asked was directed to the Acting Prime Minister, and it was whether placing the R.C.A.F. on alert had been done in conjunction with the United Nations and if the latter was aware of this action. Is it being done because the situation has deteriorated or merely as stand-by insurance?


Mr.   Marlin@Essex East: Mr. Speaker, the words of the Minister of National Defence were, I think, words that deserved to be examined.


Some hon. Members:: Oh, oh.


Mr.   Marlin@Essex Easl: They were made with a full sense of responsibility. But I might say that Canada is a member of the United Nations force, our troops are under the commander of the United Nations force and under the direction of the secretary general pursuant to a resolution of the security council. The participation of Canada was authorized by this house. Canada does not intend to take any action that is in any way going to lower the potential power of the United Nations. This does not mean to say that all sorts of contingencies are not borne in mind. We must recognize the fact that we are a member of the United Nations force called upon to do our best, pursuant to the charter, to see what contribution we can make toward peace on that troubled island.


Thomas Clement (Tommy) Douglas: May I assist the minister in giving a more succinct answer by asking him if we can have the assurance there will be no withdrawal of Canadian forces without the agreement of the United Nations.


Mr.   Marlin@Essex Easl: Mr. Speaker, I think my hon. friend, who has been a student of international affairs for a long time, knows he could not, under the circumstances, expect a more succinct answer than the one I gave.


John George Diefenbaker: One might almost say that one could not, under any circumstances, expect a more succinct answer than has been received, but that would be unfair to the minister on occasion. I ask the minister this. Was there any foundation for the report in the afternoon press of Friday that an exceptionally well informed and always reputable source in the department of defence had stated that preparations had been completed so that if evacuation were required the R.C.A.F. would carry it out?


Paul Theodore Hellyer: I have not seen the actual report, Mr. Speaker, but I understand that it was not factual in all respects. I think it is
Inquiries of the Ministry well known, however, that the R.C.A.F. does have a very considerable capability. It was used at the time the force was set up, and this force is always available for whatever purposes it may be directed.


John George Diefenbaker: What does the hon. gentleman mean by that? Is it a fact or is it not, as stated by this source already described so fulsomely in the press, that arrangements have been made to guarantee that if there is an emergency the R.C.A.F. can and will act?


Paul Theodore Hellyer: I think the facts as specifically set out in the article were not correct.


John George Diefenbaker: What particular facts were not correct? I should like to know what portions were not correct.


Hon. Marcel Lambert (Edmonton West):: should like to direct a question to the Minister of National Defence. Upon what facts at this time, after many weeks in Cyprus, does the government now give the situation a different assessment, which now necessitates a stand-by alert for this transportation fleet? Why is it now being put on a stand-by alert?


Paul Theodore Hellyer: I do not think I can add anything to what has been said already by the Secretary of State for External Affairs, who set out the situation very fully and very succinctly for my hon. friend.


Mr. D. V. Pugh (Okanagan Boundary):: Mr. Speaker, I have a question to put to the Minister of National Defence concerning intelligence reports from Cyprus. Are intelligence reports made directly to anyone in Canada or to the minister, other than those which come through the United Nations itself? Do we get them direct, or do we have to get them through the United Nations?


Paul Joseph James Martin: Mr. Speaker, my hon. friend will not mind if I answer this question by suggesting to him that, as this is a question involving security, he should not press it any further.



RUSSIAN PROPOSALS RESPECTING


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: I wish to address a question to the Secretary of State for External Affairs. In view of the fact that Soviet authorities have contacted the representatives of most of the NATO countries in Moscow regarding NATO nuclear

Inquiries of the Ministry armament, can he tell the house whether there has been any contact with Canada on this subject either through our representative in Moscow or directly with himself?


Paul Joseph James Martin: With regard to the nuclear force?


Robert Norman Thompson: The multilateral nuclear force.


Paul Joseph James Martin: Would the hon. member state the question again?


Robert Norman Thompson: During the last few days the Soviet authorities have been in contact with the Moscow representatives of most of the NATO countries regarding the multilateral nuclear force proposed by NATO. Can the hon. gentleman inform the house whether there has been any contact on this matter either through our representative in Moscow or directly?


Paul Joseph James Martin: It may be that since the Soviet ambassador is out of the city this communication has not yet come to Canada. I have seen the statement of Chairman Khrushchev with regard to the implications, as he sees them, of the multilateral force. I would point out to the hon. gentleman that while a proposal for a multilateral force has been made by the United States, it does not represent at this stage a NATO problem as such.


Mr. Eldon M. Woolliams (Bow River):: supplementary question. Are negotiations still going on for Canada to contract out of nuclear weapons?


Mr.   Marlin@Essex East: This question has been answered several times in the past.


Eldon Mattison Woolliams: Not very clearly, though.



VISIT TO POLAND BY PARLIAMENTARY SECRETARY TO MINISTER

[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, I have a question for the Acting Prime Minister. Is he able to advise the house whether the visit of his parliamentary secretary, the hon. member for Parkdale, to Poland is official or otherwise? If it is official, what is the purpose of his visit?


Paul Joseph James Martin: Mr. Speaker, my parliamentary secretary has gone to a conference in Geneva, and at the same time he will take advantage of his presence in Europe to visit Poland, as a Canadian citizen of Polish background. I am sure


this will be welcomed by Canadian citizens generally, and particularly by those of Polish extraction who are part of the Canadian family. I hope that as the result of his visit -in fact I believe that as the result of his visit-there will be some exchanges that will be of value to this country.


Some hon. Members:: Hear, hear.



REFUSAL TO ADMIT TO GALLERIES GIRLS WEARING SHORTS

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to direct a question to whom it may concern. I ask this question at the request of a number of young ladies who came to Ottawa to see their parliament in action but were denied admittance to the galleries because they were wearing shorts.
In view of the fact that many years ago it was considered improper for a lady to come into the gallery without a hat and the protective staff provided those ladies with temporary hats, and in view of the fact that in some places in the United States they provide ladies in shorts with wraparound or portable skirts, could some consideration be given to providing such wraparound or portable skirts that could be issued by the protective staff for a small fee?


Paul Joseph James Martin: Since the question has been directed to whom it may concern, might I suggest to the hon. gentleman that at six o'clock he and I should address ourselves to the officers of the house on this matter, after he and I discuss the merits of the question.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. F. J. Bigg (Athabasca):: In the absence of the Minister of Agriculture I will address my question to the Minister of Trade and Commerce. As there is a serious situation in many grain growing areas in western Canada amounting, in many cases, to complete crop failure, will the government give consideration to making acreage payments as was done by the former administration.


Hon. Mitchell Sharp (Minister of Trade and Commerce):: The government's intention with respect to the drought stricken areas of Saskatchewan has been partly announced

by the Minister of Agriculture, and any further measures will be announced when decisions are taken.



PENSIONS


[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: wish to address a question to the Acting Prime Minister. Has the government received a letter from Premier Roblin of Manitoba suggesting or recommending that a dominion-provincial conference be held prior to the introduction of the Canada pension plan in order that the priorities of the provinces may be assessed with respect to economic development, education and other matters? If so, has the letter been considered, and what is the attitude of the government with regard to this request?


Hon. Paul  Marlin@Acting Prime Minister: I tabled letters from five provincial premiers a few moments ago, and I distributed copies of those letters to the leaders of the parties so they might have them for examination. Included among them is a letter from Premier Roblin with regard to the question of priorities. Of course the program of the Prime Minister, which we are now carrying out and which was drafted before he left for the prime ministers' conference, was prefaced by his own statement in the house concerning priorities. One of these was education, in connection with which he has acted, another was in connection with health and medical care-problems which had to be proceeded with on the basis of consultation with the provinces.
With regard to the Canada pension plan, if there is indeed a suggestion by Premier Roblin that this plan should be postponed, then I should say as the Prime Minister has already indicated, that it is not the intention of the government to postpone this particular measure.


Mr. Stanley Knowles (Winnipeg North Centre):: A supplementary question, Mr. Speaker. Is it not a fact that when the government of Manitoba agreed to the amendment of the British North America Act with respect to the Canada pension plan it did, by implication, agree to the Canada pension plan; and is the federal government therefore not justified in going ahead with its commitment to proceed with this legislation this session?
Inquiries of the Ministry


Paul Joseph James Martin: The Prime Minister has already dealt with that point and I sought to deal with it in the reply I gave to the hon. member for Edmonton West a few moments ago.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. M. J. Moreau (York-Scarborough):: wish to direct a question to the Minister of Transport. Would the minister consider asking Air Terminal Transport Limited either to end its monopoly at Toronto international airport or to extend it so as to provide limousine service to the 300,000 people living in the east and north of Toronto who are currently receiving no consideration at all?


Mr. Speaker:: I wonder if the hon. member would put this question on the order paper.


Maurice John Moreau: I serve notice that I wish to debate this matter on the late, late show.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Arnold Webster (Vancouver-Kings-way):: In view of the fact that last week the Canadian Broadcasting Corporation applied to the Crown Assets Disposal Corporation for the use of old federal buildings on property which the city of Vancouver needs for park purposes, how can the C.B.C. justify the expenditure of $105 million on studios in Montreal and Toronto while refusing to consider even a modest new building in downtown Vancouver?


Mr. Speaker:: I doubt very much whether the phrasing of this question is in order. In any event, perhaps the hon. member would put it on the order paper.



VANCOUVER


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: I wish to address a question to the Minister of Industry in the light of the answers he gave to questions last week. This is of urgent public importance. May I ask the minister if this is the week when the Crown Assets

Inquiries of the Ministry Disposal Corporation will decide on the utilization of the R.C.A.F. lands at Kitsilano in Vancouver. If so, will consideration be given to protecting the last remaining open waterfront area for park and recreation purposes?


An hon. Member:: Louder.


Harold Edward Winch: I wish I could say it louder, and I wish some of you would speak louder, too, on behalf of Vancouver.


Hon. C. M. Drury (Minister of Industry):: I hope it may be possible to reach conclusion this week. This does, however, depend to some extent on the availability of negotiators on behalf of those who are putting forward proposals. I can reassure the hon. gentleman that the needs of the city of Vancouver will be taken fully into consideration.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Lawrence Watson (Assiniboia):: I wish to direct a question to the Minister of Transport, having again received calls this morning from the Rouleau area stating there are 250,000 bushels of wheat still to be delivered. Can the minister assure the house that sufficient cars will be provided by the Canadian Pacific Railway to move this grain before July 31?


John Whitney Pickersgill: I think the hon. member knows that the government has no direct control over the C.P.R., but the hon. member for Red Deer brought this matter to my attention by telephone this morning, as well as to the attention of my colleague the Minister of Trade and Commerce. The matter is being taken up very actively with the wheat board, and I believe certain representations have also been made direct to the railway company. I am very hopeful-in fact I feel quite confident-that the railway, looking for business, will be anxious to do everything it can.


Lawrence E. Watson: Would the minister care to comment on a report in the Moose Jaw paper last week by the superintendent of the C.P.R. division there that there was no tie-up of grain shipments in the area under his jurisdiction? Could he possibly have the superintendent of the Regina subdivision explain why there is a tie-up on the latter line?


John Whitney Pickersgill: I would be very glad to draw the matter to the attention of the head

office of the railway to see whether they can give some explanation.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: had a question to direct to the Minister of National Health and Welfare. In her absence perhaps the parliamentary secretary might reply. Will there be a meeting in Ottawa in the next two weeks with the provincial health ministers with regard to the health commission report?


Mr. J. C. Munro (Parliamentary Secretary to Minister of National Health and Welfare):: Yes, there will be a meeting of the health ministers in Ottawa in the next couple of weeks, and one of the subjects for discussion will be the Hall commission report.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolielle-L'Assompiion-Montcalm):: Mr. Speaker, I should like to direct a question to the Minister of Finance.
Could the minister tell the house whether it is true that a large British company is to invest $70 million in the steel complex to be established in Quebec?


Mr. Speaker:: Order, please. Important as this question is, it is surely one for the order paper.


Louis-Joseph Pigeon: The minister is ready to answer, and I gave him notice.


Mr. Speaker:: That still does not enable the question to qualify as being urgent and requiring an immediate answer.


Louis-Joseph Pigeon: After ten o'clock, Mr. Speaker.


Walter Lockhart Gordon: The answer I was about to give was "No, Mr. Speaker".


Louis-Joseph Pigeon: I withdraw.



POSSIBLE LOCATION OF NEW


[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Meganiic):: Mr. Speaker, I would like to direct a question to the Minister of Industry. Has the minister received any communication or request on the part of the city of Thetford Mines to the effect that they are interested in having the Renault or Peugeot car industry established in their locality?


Charles Mills (Bud) Drury: Not to my knowledge, Mr. Speaker.



CANADIAN FLAG


[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland):: Mr. Speaker, I have a question for the Acting Prime Minister. Is he now in a position to reply to my question of last Friday with regard to the flying of the proposed new flag design on H.M.C.S. Yukon while at sea?


Paul Joseph James Martin: Mr. Speaker, the Associate Minister of National Defence is in a position to answer this question.


Hon. Lucien Cardin (Associate Minister of National Defence):: Mr. Speaker, on Friday last the hon. member for Cumberland asked two questions. First he wanted to know under what authority the proposed new Canadian flag was flown on H.M.C.S. Yukon while at sea. His second question was whether instructions had gone forward from the government to the armed services requesting that they assist in the promotion of the new flag design.
I gave an answer in the negative to the second part of the question, and, as a result of the hon. member's inquiry, I obtained information relating to the first part of his question.
It appears that a flag was made on board H.M.C.S. Yukon resembling the proposed new Canadian flag, and was flown on the initiative of the ship's commanding officer. The flag was flown additional to and not in lieu of the normal flags authorized to be worn by Her Majesty's Canadian ships, and in a position inferior to them. The whole episode was at the initiative of the crew of H.M.C.S. Yukon, and there was no ulterior or sinister motive connected thereto. However, the ac-20220-341
Inquiries of the Ministry tion taken was not in strict conformity with regulations, and as a result the senior officer in command ordered that it be hauled down.


Robert Carman Coates: A supplementary question, Mr. Speaker. Is any further action contemplated, at the request of the government, to reprimand the individuals in question?


Louis-Joseph-Lucien Cardin: The action, of course, was certainly not illegal, and in the minds of certain people it was really commendable. We have no further action to take against the commanding officer.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, about a week ago I asked the Minister of Labour a question regarding the ship Imperial St. Lawrence, some of the crew of which were dismissed at Portland, Maine and left to find their way back to Canada because the Imperial Oil Company said they could pick up West Indian crew members at less than half the salary. The minister promised to look into the matter. I wonder whether he has any report to give to the house.


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, the officers of the department have looked into this matter, and I will attempt to give my hon. friend a report tomorrow.


Thomas Clement (Tommy) Douglas: Could I ask, at the same time, if the minister will find out whether any other ships have been similarly affected. I have some indication of similar complaints with regard to other ships.


Allan Joseph MacEachen: I will be glad to do that, Mr. Speaker.



INQUIRY AS TO FEDERAL LABOUR CODE

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Labour. In view of the fact that it is almost three months since the minister said the government's proposed labour code would be on the order paper as soon as possible, can he say whether this legislation will be introduced shortly?


Allan Joseph MacEachen: Mr. Speaker, the original statement still

Inquiries of the Ministry stands; it will come forward as soon as possible. The measure is being drafted, and as soon as that is completed we will get it on the order paper. I have not had a chance to check the situation this morning, but I think the measure ought to be on the order paper soon.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. I realize the minister is just back from a very important meeting in Geneva, but I wonder if he would check on this and give an answer later this week, perhaps even without being prompted to do so.


Allan Joseph MacEachen: Yes, Mr. Speaker.


Raymond Langlois: A supplementary question, Mr. Speaker, one which I have asked many times, as have other hon. members. It concerns the study by this house in committee form of the Gill report. Has the minister any communication to give the house at this point?


Allan Joseph MacEachen: No, Mr. Speaker.



COMMONWEALTH CONFERENCE


[Stage Direction]
On the orders of the day:
Mr. Gene Rheaume (Northwest Territories):: Mr. Speaker, my question has just arisen as a result of press reports of the Prime Minister's statement in London to the effect that the commonwealth must give leadership in allowing all persons of different racial and cultural groups in various countries the right to expect to develop equally as free citizens. My question is this. Will the government Shortly introduce legislation in this house which will give the right to every resident of the Northwest Territories to vote in the territorial elections?


Paul Joseph James Martin: Mr. Speaker, it is not self evident that there is a logical relationship between these two important observations.


Some hon. Members:: Oh, oh.


Mr.   Marlin@Essex East: But I would say that I am sure we all agree that the reported statement of the Prime Minister with regard to racial equality is one that every member of this house and most Canadians will applaud.


Some hon. Members:: Hear, hear.


Paul Joseph James Martin: I would expect that as a result the suggestion of the hon.

gentleman would not altogether fall on ground that is not fertile.


John George Diefenbaker: Mr. Speaker, at once I say I am glad to see that the Prime Minister is converted to the ideas that he criticized when I took the same stand in 1961. I would ask the Acting Prime Minister if he would now let us know-I refrained from asking this question until the Prime Minister had spoken in London-what is the official Canadian attitude respecting Rhodesia?


Paul Joseph James Martin: I am sure my right hon. friend would agree on reflection that the general attitude taken by the Prime Minister on this occasion was not basically different from the attitude that he and others in this house have taken. With regard to the question of Rhodesia, the prime ministers' conference is not over and I think it would be judicious and wise if we were to wait until the Prime Minister makes a report in this house, as he will do on Friday next, when I am sure my right hon. friend will agree we will be very glad indeed to welcome him back to this house.


Some hon. Members:: Hear, hear.


John George Diefenbaker: That is a generous generality, Mr. Speaker, but I ask the hon. gentleman this. Is he not in a position to say what the Canadian government decided with regard to the Rhodesian situation? Why should parliament have to wait on this matter, so important to the future of the commonwealth, until the return of the Prime Minister, in view of the fact that he has made this statement in London?


Paul Joseph James Martin: I hope my right hon. friend will not misunderstand me when I say that I think we should wait for the very reason that on one occasion questions put by me to my predecessor with regard to observations made by the right hon. gentleman elicited the very wise suggestion that I should wait until the right hon. gentleman returned.


John George Diefenbaker: I would point out, however, that the hon. gentleman did not accept that and said it was very unfair to parliament.


Paul Joseph James Martin: If I did, that was one occasion when I was obviously wrong.


Some hon. Members:: Oh, oh.



APPROPRIATION BILL

Walter Lockhart Gordon: the third reading of Bill No.

C-109, for granting to Her Majesty certain sums of money for the public service of the financial year ending March 31, 1965.


Herbert Wilfred Herridge: Mr. Speaker, as there is actually no principle to this bill I will not have the opportunity of discussing that aspect of it, but I do want to make a few observations because this item is of serious importance to a good many of the people 1 represent. Letters which I have received in the last day or two have urged me to continue to do the best I can to get the members of this house to realize what this item provides for.
The purpose of item LI 7a, which is included in the schedule to this bill, is to provide for the purchase of certain obligations with United States dollars paid to Canada pursuant to the treaty between Canada and the United States relating to development of the water resources of the Columbia river basin. In my opinion, Mr. Speaker, this is in direct opposition to the philosophy of the speeches and writings of the Minister of Finance prior to his appointment as minister. I am not going to criticize the minister directly, or to blame him for the defects in this whole question. I know the minister is a very well intentioned person. However, in this case I think he lacks information or has been misinformed. As one editor stated not long ago, by the passage of this item we will be handing control of one of Canada's greatest waterways to a foreign power for questionable short term monetary and political gains.
I wish to bring to the attention of the house that during the hearings of the committee my colleague the hon. member for Nanaimo-Cowi-chan-The Islands, when speaking of the costs to the government of Canada, as reported in the committee report said as follows:


Mr. Cameron:: I was not arguing that. I was simply expressing some concern over the position of the government of Canada, because I had already discovered that they were going to pick up part of the tab, and I wanted to be sure that they were not going to do it with this.


Mr.   Keenleyside@: You said at the beginning that the government of Canada is paying the difference between the two sets of interest rates which, with great respect, is just not the case.
Then, Dr. Keenleyside went on to say:
The situation is quite clear, but Mr. Cameron is not correct in this at all. In the agreement between British Columbia and Canada it is clearly stated that British Columbia will hold Canada harmless in relation to this whole provision.
Now, Mr. Speaker, in view of the minister's statement on Friday, when this debate is concluded-and I do not intend to prolong it 20220-341i
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at any great length-we should like an explanation of the apparent contradiction between the information given by Dr. Keenleyside to the committee as co-chairman of the British Columbia hydro and power authority, and the information given by the minister in his statement to the house on Friday last.
Perhaps I might point out here that this item in the bill proves that as far as I can judge the committee was misinformed on this question. Second, I believe this item provides water to irrigate a tremendous acreage of United States soil, water which should have been reserved to irrigate Canadian land and for other consumptive purposes in Canada. Third, this item, as I see it, provides for the sale of Canadian power to develop United States industries, which should be reserved to feed a national grid for the development of industry in Canada and provide a great surge of permanent employment for both this and for future generations.
In this connection, during the committee hearings we were informed that the sale of our surplus power in the United States would not affect the development of the aluminum industry of British Columbia, as owing to the development of atomic power, which would become cheaper from year to year, aluminum plants would soon be economically built on the east coast of the United States.
What has happened, Mr. Speaker, since that information was given to our committee? I read form a United Press International report from New York dated Thursday, July 9, 1964:
The United States' ninth and newest primary aluminum company, Intalco Aluminum Corp., announced it will build its $60 million aluminum reduction plant near Bellingham, Washington.
Intalco is a joint venture of American Metal Climax, Inc. (AMAX), Pechiney, a large French aluminum producer, and Howe Sound Co., in which Pechiney holds a substantial stock interest.
Amax holds 50 per cent of the new company, with the balance shared evenly by Pechiney and Howe Sound.
Engineering of the plant, which will have initial capacity of 73,000 tons annually, will be done by Pechiney and Bechtel Corp. The later will handle construction.
Construction is to start immediately and first production is expected by the first half of 1966.
What is the reason for the establishment of this plant? It is to utilize future surplus Canadian power which is exported.
Then again, Mr. Speaker, I want to mention that this item provides for the destruction of Canadian natural resources in land, forests and 50 miles of sandy beaches, to which fact I have referred repeatedly and which the officials in British Columbia have said they could not find between Castlegar and Revelstoke. I

Appropriation Bill
have been in the country nearly 60 years and know every foot of this valley, as well as fish life and recreational facilities along the Arrow lakes for a distance from four miles north of Castlegar to Revelstoke. This item also makes possible the violation of civil and property rights of approximately 2,000 Canadians under the unprecedented and Duplessis-like powers granted to the British Columbia Hydro and Power Authority by Bill No. 14, an act to establish the British Columbia Hydro and Power Authority, passed by the British Columbia legislature this last session. Section 53(1) of that act reads:
Notwithstanding any specific provision in any act to the contrary, except as otherwise provided by or under this act, the authority is not bound by any statute or statutory provision of the province.
This act is an almost identical pattern of the Duplessis act passed in 1944 in Quebec. This act is now in operation in British Columbia. We all appreciate the fact that in Quebec, as a result of the protests of the Quebec trade unions, for which I give them credit, Premier Lesage is intending to amend the Quebec act so that public servants will have the opportunity to strike, with the exception of the police and firemen. I congratulate Premier Lesage for his forward looking attitude and his response to the trade unions. The British Columbia act is part of the development of the corporate state in British Columbia as a result of increasing control of our economy by United States corporations, and people with antidemocratic ideas.
My correspondence clearly indicates that the residents of Arrow lakes between Castlegar and Revelstoke are greatly alarmed at Dr. Keenleyside's statement of the policy of the B.C. hydro and power authority with respect to relocation and compensation of property owners who are directly or indirectly affected by the use of the funds provided by this item. I want to illustrate that by reading a letter addressed to the Prime Minister from the Burton and district farmers' institute of the Arrow lakes. I presume by this time the Acting Prime Minister has knowledge of this letter, and my speech from now on is an appeal to the government to do what it can to see that these people are treated in the same manner as people are treated by the national capital commission, as they were treated by the seaway authority and by all authorities in connection with the building of the Saskatchewan dam. The letter reads as follows:

Dear Mr. Pearson,
We are writing to you because we are very much disturbed about the trend of events in our Arrow lakes area regarding compensation and relocation of people to be affected by the flooding to be caused by the high Arrow dam. The federal government has voted for ratification of the Columbia treaty and we ask you to assume some responsibility before final ratification of the treaty to see that injustice and hardship do not occur to people who have already been upset and unsettled for many years because of the long uncertainty about the treaty.
Most of us do love our homes, and have put much into their making. Our properties have been artificially depressed in value because of these years of discussion about the treaty, and also by a lowering, several years ago, of most of the assessed values of property along the lake shore. Market value has, of course, been correspondingly depressed.
Following are some of the statements which have been made by the authorities in recent weeks which have so alarmed us that we feel we must write you and make this situation known to you. Needless to say, some of these statements are quite contrary to promises made by some politicians before the last federal and provincial elections.
R.W. Gross, manager, land division, B.C. hydro, in answer to the queries of a land owner in the district-
"I am afraid we cannot accept the principle that replacement value is to be paid for improvements affected by the Columbia developments.
The basis on which compensation is paid in Canada for private property required for public purposes is clearly established on the value to the owners principle.
Value to the owner is in almost all cases the same as market value. In addition to market value there would, in proper cases be added an allowance to cover disturbance and moving expenses...
In these circumstances, the public body is required to pay the owner what his property is worth, not what it may cost him to replace it.
The owner is entitled to be left in the same economic position in terms of cash or property after the taking as he was in before the taking.
An owner is not entitled to profit from the taking, which would be the situation if replacement value rather than market value were paid."
Dr. Keenleyside has repeated in public meetings these statements in substance. The statements were not well received by property holders. These statements of policy are far from reassuring to us, and it does not help to have Dr. Keenleyside say that of course the B.C. hydro would try to help us in getting financing for our new homes. Those of us who have good homes already paid for, or nearly so, can hardly be expected to welcome this opportunity to saddle ourselves with brand new mortgages along with our brand new homes. We are tired of hearing that our desperately hard won bottom lands are of little value when we know what a struggle it has been to get them, and how really priceless, in the world today, this land is. Those of us who are farmers know full well what we are losing.
We ask you to consider all this, Mr. Pearson, to watch and be informed on the situation, and not to forget the people in this valley.
Yours truly,
R. Oliver Buerge, secretary,
Burton and district farmers* institute.

I read that letter, Mr. Speaker, because the institute represents a number of farmers in the district. I also wish to quote one paragraph from a letter I received from a prominent Liberal who lives in Revelstoke, and I may say that on this question I have some good friends and supporters among Conservatives and Liberals who live in the Kootenays. The minister knows some of them. This letter reads:
We hear, here, through a relative of the woman concerned, that the old Herb Fisher farm north of Sidmount on the west side of the river was purchased by hydro for $5,000, and that this included approximately 70 acres of land of which 30-40 are cleared, and the dwelling-probably worth at least $2,000. This being the case it seems to me that they don't intend to stop at anything short of outright robbery. We hear too that a farmer by name of Needham-
I know this farm.
-located somewhere between here and 12 mile ferry has sold to hydro for a very low figure- he refused to divulge the price, saying that all his neighbours will be provoked for his having sold for a fraction of worth. Both of these people apparently wanted to get out for reasons of health and just took what they could get without question. Nice set-up.
I can tell you, Mr. Speaker, I have received a lot of correspondence on this issue, particularly since the treaty has been ratified by this house, and much of my correspondence is from older people.
Mr. L. Fotheringham of the Vancouver Sun recently visited the area and wrote an article in his paper from which I wish to quote briefly. This article was sent to me by Mr. W. T. Galt, the acting managing editor of the Vancouver Sun, who wanted to indicate to me his sympathy with the interests of these people along the lakes. I quote from the article:
Perfect Retreat Will Vanish
Renata lost its waterbound way of life. Now it will be swallowed by water.
Its 100 residents are bitter, because they were sure they had found the perfect retreat from a world they didn't fancy.
Renata is the only community for 50 miles on the west side of the lower Arrow lake. It is orchard land, famous for its cherries.
Jake Reimer has been here since 1918. His home is the showplace of Renata, surrounded by a neat lawn and flowering shrubs. Rhododendrons in bloom contrast with the striped awnings. There are ten acres of carefully tended orchard out back.
Words hardly express Jake Reimer's bitterness about the situation. "It's disgusting", he says, very quietly.
Can't Pay For Peace
Younger couples can be paid for their homes and can start over again elsewhere. But the older ones?
Appropriation Bill
How do you pay Jake Reimer and his wife for the 46 years of toil they have put into their home and orchard? How do you compensate Henry Epp, here since 1919, for the peace and quiet he will lose?
Most of all, the older people fear being forced into becoming cave-dwellers in an apartment house in Castlegar or Nelson or some other centre that might as well be New York for any resident of Renata.
The lake dwellers' resentment at the political wrangle that destroyed their bargaining power has been aggravated by some injudicious public hints that the affected people are just barefoot yokels anyway.
One B.C. cabinet minister, in the heat of argument, dismissed the areas in question as muskrat patches. Renata would like to catch that cabinet minister and gorge him on their cherries.
Dr. Hugh Keenleyside, the B.C. hydro co-chairman, was quoted as saying someone should go into these towns and bring the people out into the outside world so they could see what goes on.
"That's the whole bloody point", fumes Peter Warkentin, a former Winnipeg school teacher who runs the store and post office here. "We're here because we don't like what we've seen in the so-called outside world."
We Can't Start Again
Tcm Ryan is 89. He lives at Syringa Creek, on the east side of the lake, 20 miles up from Castlegar. He was on the way to San Diego from his job as bank guard in Lethbridge when he came upon this peaceful spot.
That was 35 years ago. He hasn't budged since.
"Where will I go?" says the old man in genuine bewilderment.
I don't like it. I don't like the whole business. No one has been to see me about moving. Where would I go?"
I mention these cases to introduce the human factor into this development and appeal to the Acting Prime Minister and the government to do what they can in this connection. The political chickens are already coming home to roost in the form of additional costs for the dams, costs in addition to the estimates we were given in committee, and in the government of British Columbia's uncertainty with respect to the sites, safety and cost of the dams, and in unhappiness and misery to the people directly affected.
Is there a single member of this house who would support these people being treated unjustly? Is there a single member of this house who does not think these people are entitled to be relocated in circumstances similar to what they now enjoy? Is there a single member of this house who does not think they should be relocated in entirety or if they prefer it, given compensation that is generous and just?
In conclusion I appeal to the government to use all its influence to make as certain as

Appropriation Bill
possible that the Canadians who will be directly or indirectly affected by the expenditure under this item will be satisfactorily relocated or receive adequate compensation in cash if they so desire. We can never recompense people for the loss of a way of life in a beautiful valley which is the garden of Eden of Canada, but we are morally bound to compensate to the full for the lost material values. 1 think it is up to the government and every member of the house to do what they can to see that these unfortunate people are fairly and properly treated.
Beyond all developments and programs the true conservation of human and natural resources is ultimately something of the mind, an ideal of people who cherish and revere their past and believe in the opportunities of the future. Our Canadian civilization will be judged by its fidelity to this ideal as surely as by its parliamentary institutions, its system of justice and its culture. One of the contrasts of our society is that while our material standard of living has continually improved, our environmental standard is steadily declining because of a lack of consideration of these great values. While we have improved housing, are better nourished and have more varied entertainment, the terms of this treaty and what it provides for indicate that we are not qualified to inherit this land to the advantage of this and future generations.


Mr.  T. S. Barnell@Comox-Alberni: Mr. Speaker, because of the very great length of time that has elapsed between the time the subject matter of the Columbia river treaty first came before the house and its recent ratification, I think it is perhaps understandable that members of the house are generally inclined to say "Thank God that is over at last," and to hope that we are not going to hear anything more about it for a long time. But I think we should realize that the mere ratification of the treaty by the house by no means brings this matter to an end, that in fact the real business arising out of the Columbia river treaty is just now starting and that the actual work of physical development is shortly to begin after all these years.
I think it is for this reason that the hon. member for Kootenay West, whose constituents I think most of us realize by now are the people most directly and immediately affected by the physical developments, has spoken out at this time in order to draw to our attention the situation which these people are now actually going to have to face

after all this lapse of time. There was some discussion of this matter when the particular item concerning the Columbia river financing was before the committee of supply, and I was somewhat astounded to see a Canadian Press dispatch in the Vancouver papers which suggested that the discussion we had the other day constituted a filibuster. Surely any reasonably minded reporter, any reasonably minded Canadian, should not object to the fact that some members of the house at least are concerned about what is going to happen to these people. I hope the government of Canada and members of parliament generally will not refuse to recognize the moral responsibility we have and will not seek to pass off this matter by suggesting that concern for these people lies only with the constitutional jurisdiction of the British Columbia authorities.
So I have no apology whatever to make for rising to support the plea just made by the hon. member for Kootenay West. I happen to represent a constituency in the same province as the constituency of the hon. member for Kootenay West, but in many ways the actual development of the Columbia river valley, particularly from the point of view of its immediate impact, is just as far removed from my constituency as it is from those of members from the prairie provinces, the province of Ontario or the Atlantic provinces. Therefore I feel I am quite qualified to seek the support of members from all parts of Canada for the plea of the hon. member for Kootenay West.
Inasmuch as this was a matter that had to be dealt with by parliament, I suggest that if the financing provided in this bill is not sufficient to re-establish these people properly, and if the British Columbia authorities fail to properly discharge their responsibility in this matter, we in this parliament should not hesitate to indicate that in addition to the other financing required for the development of the Columbia river project, we expect the government of Canada to see that additional funds are provided in one way or another to ensure that justice is done to these Canadian citizens.
We have had strong differences of opinion as to the value of this treaty to the Canadian economy and the nation. The members of the New Democratic party have seen nothing yet to cause them to change their minds in respect to the position they took with regard to ratification. Nevertheless we have to accept the decision made by the majority of the members of the house, and we assume that

the works involved in the project are now going to proceed. But we do not intend to forget the responsibilities that we as members of the house have for the welfare of the people most directly involved. The hon. member for Kootenay West is quite right when he says there is no way of recompensing these people for some of the things they are going to lose. So far as it is financially possible to see that they are fully recompensed for the losses they are going to sustain, certainly not one of us should disagree with his contention that we should make it clear to them that we intend to see that they have at least that much.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I should also like to add my words to those of the hon. member for Kootenay West, who has been so interested in drawing to the attention of the house some of the faults that have already come to light with regard to this matter. The federal government is being asked to advance money for the commencement of the development of the Columbia river. We are now being asked to provide a sum of money in Bill No. C-109, and it seems to me there should be a schedule attached to the bill setting forth the conditions under which the government of British Columbia will have to operate so far as expropriation is concerned. I wonder how many members of parliament would like to call the hon. member for Kootenay West a liar. I doubt if there are many who would; yet they are really saying he is lying, or they would not ratify this bill at the present time without some assurance that the abuses he says have taken place in the Kootenay would not be repeated.
In my opinion we have had some very favourable experience in the matter of expropriation in recent years. Most of the members who represent rural areas will know that this question affects rural people on many occasions. One occasion on which it affected both rural and urban dwellers was the case of the St. Lawrence seaway. I have been very proud of the way in which expropriation was handled in that area, because consideration was given at that time to the many things the hon. member for Kootenay West is requesting now. If you go through the area now you will find homes which might better have been demolished and rebuilt. However, consideration was given to the fact that we were uprooting people who had lived for a lifetime in these houses to which a lot of sentiment was attached so the houses were moved, some-
Appropriation Bill
times at greater expense than the cost of demolition and rebuilding. However, the federal government, through the seaway authority did move these buildings and did give consideration to the matters which are now concerning the people in Kootenay West, along the Arrow lakes and the Columbia river section.
Many times this consideration is not given, as I know from experience with the water resources commission of Ontario. That commission decided to build a sewage lagoon near the town where I live. A real estate operator knew this and obtained an option on a farm in the area, the purchase price being $30,000. A year went by and the option was dropped. The water commission expropriated the farm and paid the farmer $16,500. Was the real estate agent who went out and valued that farm crazy? I doubt it. He is in the business and makes a good living, so he must have known the value of the farm and that at one time it was being considered for that purpose by the commission. The farmer has been told that if he does not like it he can appeal from the decision of the water commission.
Many expropriations have been made in which the compensation has been unfair, unreasonable and unjust, and no consideration has been given to the factors mentioned by the hon. member for Kootenay West. I think the minister is being unfair. He is asking us to appropriate this money, yet he is not giving us any guarantee as to what the expropriation process will be.
It is a fact that expropriation is a must in a civilized community. Expropriation is used for the good of the community. Obviously it is necessary to obtain land to provide for developments for future generations in Canada. However, I believe this power carries with it an obligation to the individual, an obligation which is covered by the bill of rights, and I believe it should be honoured. I feel hon. members should think about this because what they are really saying is that they do not believe the hon. member for Kootenay West when he says that Dr. Keen-leyside is doing these things in British Columbia. Members are saying that these representatives are wrong in asking for protection. I think the question is that simple. I am sure the hon. member for Kootenay West is expressing the opinion of the people who live there.
It may be that those who own the land may only see a few years ahead and may well accept a few thousand dollars for a

Federal-Provincial Relations property that may be worth a good deal more. You can easily understand the reason for this, because sometimes these people are browbeaten very badly. I should like to refer to the work done by some of the people connected with the trans-Canada pipe line when it went through my area. They told the people "You have to sign an easement or have to make these arrangements", and the people were paid a ridiculous amount for some of this property. After I advised the farmers not to sign or make arrangements because we would do this at public meetings, one of the agents said in a barber shop it had cost him $50,000 more for easements that week than it had the week before.
We have an obligation to represent our ridings and, in my opinion, we have an obligation to help other members represent their ridings properly. I strongly urge the minister, before this bill passes, to give us some assurance that the federal government is going to make some demands for co-operation in the setting of reasonable terms for expropriation of these lands along the Columbia river. I am in agreement with the hon. member for Comox-Alberni, and I personally am willing to support a demand for reasonable settlements for the people who are being displaced as a result of the treaty we ratified here.


Mr. Deputy Speaker:: Is the house ready for the question?


Some hon. Members:: On division.
Motion agreed to on division and bill read the third time and passed.



DOMINION-PROVINCIAL RELATIONS PROVISION FOR REVISION OF FISCAL ARRANGEMENTS AND TAXATION PROVISIONS

[Stage Direction]
The house resumed, from Thursday, July 9, consideration in committee of the following resolution-Mr. Gordon-Mr. Lamoureux in the chair:
That it is expedient to introduce a measure to provide for the revision of certain fiscal arrangements with the provinces and to provide adjustments of fiscal arrangements and taxation provisions consequential upon the provision of youth allowances to parents resident in certain provinces.
Mr. Martineau:: Mr. Chairman, last week, at the beginning of his statement on this resolution, the minister took the liberty of praising co-operative federalism. However, you noticed, Mr. Chairman, that his praises were brief and not very enthusiastic, and for a very


good reason; indeed, the brand of co-operative federalism practised by the Minister of Finance (Mr. Gordon) and this government has proven to be a dismal failure. I do not think that I exaggerate when I say that such is the case knowing that responsible associations, for instance, qualified this new formula of national suicide.
In addition, it is readily realized that under this government federal-provincial relations have surely not improved. There is, for example, the increase of separatist and extremist elements within confederation; this is surely not an indication of real success for the formula advocated by the Minister of Finance. We also hear recriminations and grumbling on the part of the provinces due to the pitiful state of the fiscal resources allotted to them and to the deep misunderstanding of the present federal government with regard to provincial rights, on the one hand, and to provincial priority needs, on the other hand.
Mr. Chairman, as a result, federal-provincial relations are going through a serious crisis and there are many instances in support of such an allegation. For instance, there was the case which gave rise to several interventions in this house: negotiations concerning the transfer of responsibilities of Eskimo affairs in northern Quebec. What happened in that case? We were faced with a real dilemma, so much so that negotiations had to be interrupted and then definitely broken up, and I even think that the Minister of Northern Affairs and National Resources (Mr. Laing) does no longer recognize his colleague from the province of Quebec, the minister of natural resources, and is not on speaking terms with him.
We also witnessed new interferences by the central government into fields of exclusive provincial jurisdiction such as education, social welfare, property and civil rights.
Just recently, the right hon. Prime Minister (Mr. Pearson) announced that he had ordered an investigation or, if you wish, a pre-investigation into the matter of the interdependence of economic regions in Canada. But, as another indication of the incomprehension and of the indifference of the central government towards the provinces, the latter were consulted beforehand concerning that investigation which is under way and were not invited to take part in it, so that the premier of the province of Quebec, Mr. Lesage, stated that no investigation ignoring in such a way the interests of the provinces could be serious or give any result.

Mr. Chairman, those are only a few indications of the total and complete failure of that formula announced with much fanfare by the members of the administration, the Secretary of State (Mr. Lamontagne), who is not here, the Minister of Finance and the Prime Minister himself.
But it is not enough to acknowledge the failure of a formula. We have to look for the causes of that failure. Why is the co-operative federalism formula not successful with this administration which is, in fact, backed by many provincial administrations professing the same political doctrine as this government? It is because this formula is not invigorated by a thoroughly autonomist attitude or view. In other words, those people preaching autonomy, decentralization and co-operation, are not imbued with the need for that co-operation.
As a matter of fact a good number of ministers are in favour of centralization and have been for a long time; they were high officials in the wartime and the following government, which certainly was, in the opinion of all observers, the most centralizing government this country has ever known. It is probably normal that those people should still follow the same direction and that, when they profess a conversion, it is only a surface confession or conversion. In short, those people who are full of that centralizing and monopolizing spirit would like to concentrate, in defiance and in violation of the constitution, the real powers here, in the central government, which would then be directed by a superstructure of permanent high officials not accountable to the people.
That is one reason for the failure, but there is also the obvious lack of co-ordination and common agreement which mars the government's efforts to settle the problem.
Another reason is the fact that many of those who sit on the government benches have a misconception of the principle of federalism. Numerous facts bear out that statement.
Our constitution, the B.N.A. Act, clearly defines federal and provincial jurisdictions and gives direct responsibilities to each level of government.
That is the constitution. Now, what did the government do? They decided that the constitution was not so important and they proceeded with what they would like to be a clever plan under which there would be an agreement to depart from, and do violence to, the constitution.
Federal-Provincial Relations
But is it really possible, through an understanding or an agreement, to transgress the letter of the constitution? I do not feel that this is sound federalism; neither is it cooperation along the lines intended by the government.
A meeting is called and it is decided to launch a large number of joint plans ostensibly because the Canadian people have to be provided with some services, and once the consent of the reluctant provinces has been obtained, thanks to promised subsidies, the program is launched, but a loophole is provided, in order to give compensation to the provinces that do not agree or do not deem it advisable to participate.
This is the new contracting out formula which enables a province to refuse to take part in a joint program, without incurring fiscal penalties.
Of course, the contracting out formula is certainly useful, as a last resort. I favour the use of this formula instead of merely penalizing a province which does not participate in a joint program; but would it not be better simply to sit together someday and discuss the limits of the various responsibilities and afterwards respect such divisions? Moreover, there would undoubtedly be less conflicts if there were such negotiations. There would not even be any reason for options.
That is why I think this option formula is a mistake and can only lead to greater difficulties because these shared programs thrusted on the provinces are likely to frustrate the priority of provincial needs, for, under the guise of a shared program, a province is forced to undertake certain projects which may not meet its immediate objectives; thus, subsidies which might be used for certain projects which that province considers as extremely more important, must be used for this shared program. And if it is not done, there is a penalty, a series of conflicts which entail consultations and conferences summoned hastily, which may be a makeshift but cannot provide a permanent settlement in that conflict concerning federal-provincial relations.
At the outset of the debate on this resolution, mention has been made of solutions that must be brought about concerning this jurisdictional conflict in order to put an end to the real uneasiness which might lead eventually to the end of our confederation. Some persons wondered, quite sincerely, whether the fact of claiming on the one hand the respect, the upholding of the constitution was compatible

Federal-Provincial Relations with that attitude, on the other hand, which consists in calling tor complete revision of the constitution, in order to amend it and transform it into a tool really suitable to present needs.
In my opinion such an attitude is not unreasonable. Provisions of the B.N.A. Act specify certain rights that are inalienable. They set for instance the jurisdiction of the various authorities, and sections 91, 92, 133 and others recognize certain rights to the French language and to the French Canadians, an essential element and an equal partner in confederation.
Mr. Chairman, it is obvious that the rights granted by the constitution are inalienable, except with the unanimous consent of all parties. Everybody agrees on that point. Besides, it follows that the constitution, in its present state and as long as it exists, must be fully respected. In addition, it is not illogical to hope for a possible meeting in order to discuss the constitutional amendments which are deemed necessary, nowadays. That is why the stand taken, for instance, by my Conservative colleagues of the province of Quebec is logical and justifiable. We want to respect the constitution, we want the government to legislate within its fields of jurisdiction, as determined by the constitution. But it is our hope and our wish that some meeting will take place, that there will be a true dialogue in order to amend what should be changed, to eliminate the uneasiness which corrodes the constitution, as well as the whole country.
Mr. Chairman, we certainly ought to make an effort to obtain the unanimous agreement of the federal government and all the provinces in order to bring home the constitution, and then amend it to make the required adjustments between the expectations of 1867 and the realities of 1964.
Therefore, I think that the proposal of convening a federal-provincial conference, to discuss and try to obtain a favourable agreement in this matter, is a sound and well founded suggestion, and, moreover, I maintain that we should not hesitate to hold this conference, because I think the matter should be settled before the start of the centennial celebrations three years hence.
I even believe that the framework of this federal-provincial conference should be enlarged so as to represent a true constituent assembly which would not only have deliberating power but enough legislative author-


ity to shape the new organization which is needed. Therefore, this conference should of necessity be attended by the elected representatives of the people, whether on the federal or the provincial level.
Yet, if such talks are to succeed, they should necessarily be preceded by lengthy preparations so that every detail may be ironed out.
To pave the way, I would suggest, for instance, that interprovincial conferences be held. Such action has already been taken, and provinces often meet to discuss their common problems. I think the time has come for the provinces to meet and discuss among themselves whether amendments to the constitution are possible and what they should be. Those conferences should also be preceded by the setting up of constitution committees in the various provinces. In that respect, the Quebec government has already taken the initiative. It has established a constitution committee which is seriously examining all aspects of the problem and it will certainly be soon in a position to submit a report that should prove most useful to the federal government and the provinces.
A thorough study should also be undertaken by high government officials in connection with that problem and all its ramifications. More frequent and more extensive consultations should be held between representatives of the federal government and those of the provinces. There again, I suggest that committees of constitutional experts be set up not on an ad hoc basis but permanently because the government which will be in power one, two or three years hence, will obviously have to tackle the problem if it wishes to solve it. It should then be able to call on such experts for advice.
Mr. Chairman, it has already been suggested-I think it was the hon. member for Three Rivers who mentioned it-that the Senate be transformed into a constitution committee. Here is also a most welcome proposal which, I feel should be implemented as soon as possible. In addition to the Senate constitution committee, I would suggest the establishment of a special committee of the House of Commons, which would work with the constitution committees of the Senate and of the provinces.
Of course, the members taking part in this federal-provincial conference ought to be the elected representatives of the people who should not be deprived of their real responsibility if the democratic system is to endure.

Mr. Chairman, the part played by this conference, this constituent assembly, would be to define the status of confederation when it enters into its second century.
Mr. Chairman, to criticize such a suggestion before ascertaining the enormous possibilities it may have is deplorable indeed. Should the conference, or those who take part in it, be really conscious of the seriousness of the problem they face, should they show willingness to solve it, I believe that such a conference could become the most important project of the centenary we intend to celebrate three years hence.
Mr. Chairman, before concluding, may I be allowed to make one or two observations. First, a warning: I do not believe that constitutional innovations in themselves will be able to solve the basic problems which this country is facing. Those are rather economic and social problems and, here, I would say that any solution that does not take into account certain factors would only be illusory and doomed to failure. The first of those factors which I have in mind is that the conference will have to acknowledge the French fact in Canada and recognize that any nation is entitled to self-determination. That conference and those who will be responsible for the settlement of the constitutional issue will have to be aware of the new face of Quebec and its reasonable aspirations.
Often we are asked what the province of Quebec really wants. Mr. Chairman, I could answer this question by asking another. What does any nation want, be it the French Canadian nation or the English Canadian nation? And the answer to the latter question is very easy: the French Canadian nation- or Quebec-simply wants to be itself. In my opinion, this is the true answer to the latter question, and I believe that in wishing to be itself, Quebec must take into account, and be aware of, the dual trend of ideas abroad in the world today.
On the one hand, we witness the surge of nationalism, with the emergence of a great number of nations, African and others, who are declaring their independence. On the other hand, it should not be forgotten that there is also a new awareness, within the French Canadian nation, of the universality of the human community of which it is a part, and it is on the universal and human front that the Quebec nation wants to play its part, while remaining what it is, and while evolving, according to the great tide of political universalism which is sweeping the world.
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In conclusion, I say that if the constitutional and other innovations would once and for all recognize the aspirations of Quebec, I am convinced that, then and there the French Canadian nation would be ready to assume its full part as equal partner in the confederative achievement. In fact, in Quebec, some voices have already made themselves heard, speaking authoritatively and pointing the way.
The manifesto for functional policies, which appeared recently in Cite Libre of May 1964, shows that the most important task today is to open the frontiers of Canadian society. Needless to say, by that is meant the whole Canadian society. In that remarkable manifesto, which is not well enough known, it is said among other things:
A plurality of ethnic groups have to learn to live together: modem challenge full of significance.
To recognize one's inability to make the Canadian confederation work is, at this stage of history, to recognize one's indignity to take part in world politics.
Those are, Mr. Chairman, objectives worthy of the most serious attention of all hon. members and on that I will end my remarks.
Consequently, I ask the present government to get rid of its false cloak of co-operative federalism, to examine the problem closely.


Some hon. Members:: Oh, oh.


Paul Raymond Martineau: You can laugh at that but the uneasiness which is felt at the heart of our confederation does not warrant it.
I am asking this government, which up to now has shown too much evidence of incompetence and wavering, to settle the basic problem while it may not be too late by taking the true facts into account and by treating, at last, the Canadian nation, and Quebec, in particular, as a people composed of adults.


Mr. Drouin:: Mr. Chairman, would the hon. member permit a question?


Paul Raymond Martineau: Surely, Mr. Chairman.


Vincent Drouin: Mr. Chairman, when the hon. member says that representatives of the people should be convened at a federal-provincial conference, would he tell the house if he is referring to the federal and provincial governments and all elected members, including members of the opposition, in this house as well as in the various provincial legislatures?


Paul Raymond Martineau: Mr. Chairman, in my opinion, it is the duty of the hon. members forming the majority to take the initiative of

Federal-Provincial Relations convening such a conference and to invite members of all other parties, in an advisory capacity. I should like also to add that this conference should include an advisory committee composed of the best brains of our country, to give adequate assistance to the government in its difficult task.


David Vaughan Pugh: Mr. Chairman, is the minister answering questions now?


Lucien Lamoureux: We are in committee at the moment.


David Vaughan Pugh: Mr. Chairman, although the minister in his speech brought out most things fairly well, I am just wondering whether he would state in his closing remarks if-


Mr. Bell:: No, he is not closing. We are in committee.


David Vaughan Pugh: Then would he tell us whether as a result of this conference all provinces were in agreement? The second point I want to bring out is this. According to the table at page 5184 of Hansard, if you look at the totals brought forward under the first heading, the total for 1964-65 is $87 million plus, of which Quebec receives a total of $42 million plus.
Then in 1965-66 the dominion is $171 million plus of which Quebec is $73 million plus. Again, in 1966-67 the total is $264 million plus of which Quebec is $107 million plus. These are changes which the tax is going to make, and I am wondering why there is such a large rise in the Quebec portion as against what I have marked off for Ontario and for British Columbia.
With regard to the natural resource abatement there is a note at the bottom of the page which reads:
Calculated for Alberta and B.C. on assumption that there would be no equalization as a result of the natural resource revenue adjustment.
I was wondering how far ahead the minister was looking, and I was thinking about B.C. which is developing rapidly at present. If there is a tremendous increase in B.C.'s position in the future I was wondering whether the federal government could make an adjustment at that time.
The per capita totals which are derived from the natural resource are given in the minister's speech. B.C. shows a very reasonable amount. Alberta, of course, is the highest but then it comes away down, not to the have not provinces but to the provinces which, per capita, do not produce very much

by way of natural resources. The question on this is, what about the future of a rapidly expanding province with rather large resources to be developed?


Walter Lockhart Gordon: Mr. Chairman, I think it might be helpful if I said a word or two at this point and cleared up a few of the questions that have been raised. The committee will remember that on Thursday the right hon. Leader of the Opposition ranged rather widely over time and space. I was interested in his historical references, especially in those that pertained to the late 18th century and to the dispute between Fox and Burke, two cabinet colleagues. I understood the right hon. gentleman to say they had been bosom pals until they had a dispute about some matter of great importance.


John George Diefenbaker: They were not cabinet pals. If the hon. gentleman had read my speech he would know they did not belong to the same cabinet.


Walter Lockhart Gordon: Well, after that they never spoke again. I suppose this sort of thing has happened in the past; I dare say it has happened even in Canada, but I hope it will not happen here again.
In his speech the Leader of the Opposition referred to some of the problems facing Canada and to the desirability of clarifying and resolving federal-provincial responsibilities and tax sources. He suggested calling some sort of national conference at which all federal parties represented in this house would be present, together with all the provincial governments. Whether this would prove to be an effective method of resolving the problems we are faced with, or whether it would only resolve itself into another forum for making speeches is a matter of opinion. I am afraid that a conference at which both the federal and provincial governments were represented, together with all the parties in all the legislatures, and all the parties in this house, would be doomed to failure from the start. Even if the conference were held in camera I am sure there would be a lot of speeches, as sometimes there are leaks. With the greatest respect I feel it is not more speeches we need in this area but more thought and more action.


John George Diefenbaker: There can be no disagreement with the hon. gentleman on that.


Walter Lockhart Gordon: Let me remind hon. members of what the Prime Minister has suggested should be done in this connection. I think most hon. members will agree that the Prime

Minister has indicated an instinctive understanding of the strains in our confederation, and especially of the changes that are going on in the province of Quebec.
At the federal-provincial conference on March 31, which continued until April 2, the Prime Minister proposed that a tax structure committee be established by the conference itself which, after study, would report back to a federal-provincial conference which would be called together for that purpose. Presumably this tax structure committee will consider a variety of fiscal matters, including trends in government responsibilities and expenditures, the sharing of expenditures by the two jurisdictions, the tax structure in Canada in both the federal and provincial jurisdictions, and the fiscal capacity and fiscal needs of the provinces. Not the least of these questions, of course, is the troublesome problem of an equitable fiscal adjustment, or equalization formula.
The committee will be assisted in its work by the reports of various royal commissions, federal and provincial, that are nearing the end of their labours. It is to be expected that the conclusions of the tax structure committee can be reported to the federal-provincial conference, or to a special federal-provincial conference, and implemented prior to the expiry on March 31, 1967 of the present fiscal arrangements with the provinces.
All of us who have been engaged in matters touching upon the responsibilities of both federal and provincial governments in recent years realize that we must take serious account of the views of one another in this field. We realize also that these views differ as between provinces and as between individuals; and that views have changed over the last 20 years.
The depression, the war and the post-war expansion all contributed to one of those historic waves in which the federal government could naturally assume a degree of leadership which extended beyond the fields of responsibility contemplated by those who created and interpreted our constitution a century ago. This broader initiative from the centre was in accordance with the mood prevailing throughout the world at that time and served, I submit, a very useful purpose in meeting many of the economic and social problems of the time and in bringing about substantial advances in these fields.
It was only natural, however, as the effects of the depression and the war were left behind and the normal processes of peacetime were resumed, that provincial govern-
Federal-Provincial Relations ments should gradually regain a greater share of the initiative and the ideas that are shared by all progressive people in public life in this day and age. This reassertion of the provincial role has been helped in recent years by the assistance the provinces have received, both technical and financial, in building up the fiscal and technical capacity of their governments to carry their responsibilities in accordance with the more dynamic role people now expect their governments to play. This has been combined in the last several years with a renaissance in the province of Quebec which has naturally emphasized the role of the provincial government there not only in accelerating the retarded development of the resources and services of that province but also as the logical exponent of the views and aspirations of French speaking Canadians.
Given this historical and constitutional context, we must all recognize that some adjustments must be made in present relationships between the federal and provincial governments, adjustments that involve some flexibility and mutual understanding. This is the essence of the co-operative approach to federalism which the Prime Minister has been urging upon all of us.
Failure to recognize this need for flexibility in our approach to federal-provincial relations would contribute to discord in sections of the country where irresponsible groups are seeking, not to encourage an understanding between French and English speaking Canadians, but rather to make such understanding difficult. The adjustments needed should be reflected in arrangements such as those we have been discussing in connection with this resolution as well as in the more fundamental questions of sharing tax fields and the payment of equalization grants. I should add that this same subject, or if you will, this same problem, will come up again when the time comes to discuss the question of shared cost programs and the ways in which full responsibility for certain of them should be turned over to those provinces that are anxious to assume them.
In the last analysis, the best solution of some of our difficulties may be to turn over to the provinces full responsibility for certain well established programs which are now being administered by the provinces in any case. It may be that as a part of this best solution the provinces should levy their own taxes to finance these programs subject, of course, to the continuation of some form of

Federal-Provincial Relations equalization payments. Speaking as the federal Minister of Finance, it is a thankless task to levy federal taxes merely to provide the provinces with the funds they need to pay for the programs they administer.


John George Diefenbaker: Would the minister allow a question? What particular programs has he in mind? He has generalized, but could he particularize for a moment?


Walter Lockhart Gordon: I think it would be premature to particularize. I am sure the right hon. gentleman is aware of all the shared cost programs. There is a great multiplicity of them and these will be the subject of pretty intensive discussions with the provinces in the months that lie ahead.
These are the kind of subjects, Mr. Chairman, that I hope the proposed tax structure committee, which is being constituted as a result of the agreement reached at the last federal-provincial conference, will grapple with. In doing so, we must take care that the federal government retains sufficient power in fiscal matters to enable it to influence the economy in one direction or the other when this is called for. But I see no reason why certain changes that are clearly needed in the light of present circumstances cannot be instituted in a way that will leave the central government strong enough to perform the functions that rightfully belong to it. Among other things the central government must continue to be in a position where it can take the initiative in fiscal policy, commercial policy, monetary policy and debt management. In other words, the central government's responsibility for the economic policies of the country as a whole must not be interfered with.
Quite obviously, Mr. Chairman, questions of this importance cannot be disposed of in a brief debate such as we are engaging in at present. I think, however, that in considering some of the more or less short term measures encompassed in this resolution hon. members should appreciate that the government is planning to seek more permanent solutions after full examination and discussion with the provinces.
In his remarks the hon. member for Bur-naby-Coquitlam-I am sorry he is not in the house-made some caustic comments, if I remember correctly, about the proposals being put forward to ease the financial position of the provinces. If I recollect correctly, in talking about the changes in the equalization formula announced after the November, 1963

conference he referred to "cooking the formula to get a specific result" and he also talked about "rigging". Speaking as a chartered accountant, I hope these expressions were not intended to cast aspersions on my professional purity.


John George Diefenbaker: What was that word?


An hon. Member:: Perish the thought.


Walter Lockhart Gordon: The first word was "professional" and the second was "purity".


Mr. Winkler:: We will go for one but not the other.


Walter Lockhart Gordon: I will confess, however, that I have never been one of those who put too much stock in technicalities or who believes that any formula necessarily will be appropriate forever. In listening to the hon. member for Burnaby-Coquitlam it seemed to me that those who have received their early training in theology approach things rather differently. There seems to be a sort of ingrained feeling that any change is heresy. I should like to suggest that this display of faith in a kind of arithmetic dogma is unsuitable in this connection.


Louis-Joseph Pigeon: Was the minister thinking about specialists in economics like the Secretary of State?


Walter Lockhart Gordon: I did not know that the Secretary of State had received early training in theology. I knew he had studied under some very well known and respected theologians.


Louis-Joseph Pigeon: He changed religions many times.


Walter Lockhart Gordon: The hon. member knows more about him than I do. It was my responsibility over 20 years ago, Mr. Chairman, to assist the then minister of finance in negotiating the original wartime tax deals with the provinces, including the province of which very shortly afterwards the hon. member for Burnaby-Coquitlam became the premier.


John George Diefenbaker: Was that the tax rental
agreements?


Walter Lockhart Gordon: The right hon. gentleman asks me if it was the tax rental arrangements. It was not what are known as the tax rental arrangements. It was the one that came first. Even in those days it seemed to me there was at least something to be said for keeping an eye on the final results, as well as on the highly complex calculations which supported them. I submit that looked at in that way it must be obvious that the changes

contemplated in the fiscal arrangements with the provinces, which are provided for in this resolution and will be incorporated in the bill to follow, will be highly beneficial to all of them. Every province will gain from the proposals. As I said a few minutes ago, it would be my hope that the tax structure committee of the federal-provincial conference will be able to devise an approach to this whole difficult and aggravating problem that will be a little easier to understand.
In the meantime, while I do not suggest the present formula for equalization is perfect by any means-I am not sure that any such formula could be devised that would be perfect in the full sense of that word-it is one which has been agreed to by the federal government and accepted by the provinces, albeit with some reservations.


John George Diefenbaker: Will the minister allow a question? When did the change take place on the part of the Liberal party which promised that equalization would be determined on the basis of the highest provinces? When did the change take place to have equalization based on the level of the two provinces, because in both elections the promise was that equalization would be determined on the basis of the top province?


Walter Lockhart Gordon: I am delighted to have the opportunity to answer that question and, I hope, to settle it in the minds of all hon. members of the committee for all time. The purpose and intention of the proposal by the Liberal party was to equalize up to the level of Ontario, which was generally understood, and which is, the number one in terms of per capita tax revenues. The reason for changing this to the top two, which at the present time are Ontario and British Columbia, is that if you make a careful study of the figures you will see that it could happen that in one year or another British Columbia or some other province might have higher per capita tax revenues than Ontario, in which case the whole calculation would be thrown out of kilter. I have not got all the calculations with me, but I shall be glad to get them and send them to my hon. friend. It was certainly clear that this would result or could result in wide fluctuations from one year to another, which were not contemplated and were never intended.
It seemed, therefore, better, after studying the detailed calculations and after considering the implications, to equalize on the basis of the top two which would presumably
Federal-Provincial Relations include Ontario, at least for a good many years to come, rather than the top one.


John George Diefenbaker: This still does not answer the question. When did the hon. gentleman, having advocated the other course and his leader having done the same-that the proper way was to level on the basis of the top province-finally adopt the course of reason and common sense which he says is now being followed?


Walter Lockhart Gordon: I was trying to make the point a little earlier, Mr. Chairman, that one can benefit from close and detailed study. It was for this reason I thought the right hon. gentleman's proposal for a massive study in which all governments would be represented and all political parties, was a rather woolly idea, if I may say that.


Eric Alfred Winkler: Does that mean the Liberal party did not study the matter before putting forward the proposal?


John George Diefenbaker: I do not want to get into a controversy with the hon. gentleman on woolliness, especially after the budget he produced. I ask him, when did his woolly idea of levelling up to the top province change to a basis of levelling to the two top provinces?


Walter Lockhart Gordon: First of all I should like to say, as an old sheep farmer, that when I said "woolly" I did not mean it in any offensive sense. It is a term of endearment amongst those who are in this business.
In answer to his particular question, we naturally approached this federal-provincial conference with an open mind and a desire to study and benefit from what we heard there. It was about that time, I think, that we decided this would be a much better approach.


Eric Alfred Winkler: Does the minister's statement mean that the initial promise made by his party was made without any study by the Liberal party prior to the promise being made, which has become the usual thing rather than the exception?


Walter Lockhart Gordon: I think that is a presumption that would be a little far fetched, Mr. Chairman.
If I may continue-


Mr. Brewin:: I wonder if the minister, in the course of his remarks, will answer a question put to him by the hon. member for Burnaby-Coquitlam, as recorded on page 5257 of Hansard. The hon. member referred to the fact that natural resource revenue would be

Federal-Provincial Relations taken into account when computing equalization payments. As I recall it he pointed out that this was in effect penalizing the provinces which are making the maximum use of their natural resources. Will the minister answer that question for our benefit at some stage?


Walter Lockhart Gordon: I believe I have answered this question, Mr. Chairman, in more general terms. We were trying to find a formula that would be fair and equitable, and it seemed to us it would be unfair and inequitable if revenues from this particular source were left out completely from the calculations. I believe this is not a new idea. It may have been done in a different way, that is all.
As I said a few minutes ago, it will be one of the purposes of the tax structure committee to try to evolve a formula for equalization that will perhaps suit more people than the present one.


Mr. Leboe:: May I ask the minister, is it not a fact that this attitude towards the development of resources is going to make it advantageous for some provinces to sit on their resources rather than to develop them, and reap the benefits in payments coming from those provinces that have developed their resources? This seems to me a very wrong approach.


Walter Lockhart Gordon: I would not think it would have that effect, no. I believe there is room for a difference of opinion on these matters. Certainly the present formulae are not perfect. I do not believe any will be devised that everyone will claim are perfect. I think it will be the purpose of the tax structure committee, as I have said, to study the point that my hon. friend has just raised and all the others that will be raised during the course of the deliberations of that committee.


John George Diefenbaker: Will the minister then say, if he is not certain now of the efficacy and propriety of what is being done, why he did not wait until this committee reported?


Walter Lockhart Gordon: I think that is a very simple question to answer, Mr. Chairman. In order to go into this matter in detail, the committee will take some time. The government believed it was important to meet the points that have been raised by the provinces now rather than in two or three years time.
There are just one or two other points that were raised in the course of the debate upon which I should like to touch. I am not going to try to deal with all of them, by any means. The hon. member for Burnaby-Coquitlam suggested there should be an annual meeting

of federal-provincial finance ministers to discuss and co-ordinate economic and fiscal policies. I agree that this is a good idea. It is an idea that has been accepted by the provinces. The first meeting of the federal-provincial finance ministers was held last November during the course of the federal-provincial conference. It was agreed that they would meet annually. I am hoping that there will be a meeting with the provincial finance ministers some time in the late fall.
The hon. member for Red Deer raised a question about our whole financial system, and as he dealt with it in considerable depth I suggest it might better be discussed when the revisions of the Bank Act are before the banking and commerce committee.


Bert Raymond Leboe: I wonder whether the minister would not admit that this is a very suitable time at which to answer these questions and that an answer should not be deferred until some time in the future. Surely the committee could be given answers to the simple questions which were asked. I think they are important to the consideration of the resolution which is before us and the bill which is to follow.


Walter Lockhart Gordon: With respect, it seems to me that since this whole question will be gone into in detail in the context of the revision of the Bank Act and the Bank of Canada Act, and in the light of the report of the royal commission on banking and finance, these more fundamental questions could be dealt with better at that time, as well as in a more orderly way.


Bert Raymond Leboe: I do not like interrupting the minister, but in my opinion it is scarcely enough to say that these questions can be dealt with in a more orderly way on some future occasion. It should not be difficult for a department to provide answers to them, and I think the real point at issue is whether or not the minister wants to give the information. I suggest to the hon. gentleman that in all fairness to the committee these questions should be answered, and not put off until some future date.


Walter Lockhart Gordon: I am afraid I did not feel that some of the questions were related to the subject matter of the resolution. I was about to say that the hon. member for Red Deer had, for example, suggested there should be an entirely new system of taxation in Canada. Before commenting on that proposal I should like to have the benefit of the report of the

royal commission on taxation which has been studying this very question in great detail for the past two years.
Several other members made interesting contributions to the debate, including the hon. member for Pontiac-Temiscamingue. I hope they will forgive me if I do not comment on their observations individually. I point out there will be another opportunity to deal with these matters on the second reading of the bill.


Marcel Joseph Aimé Lambert: Before the minister resumes his seat, may I remind him that I did raise a particular point. It had to do with natural resource revenue and what I felt was an unfair lumping together of capital moneys and annual revenues. It affects the province of Alberta more than any other.
I was at great pains the other night to set out the situation and I should like the minister to give me some explanation, since this is of great interest to the province of Alberta, and likely to Saskatchewan, depending on how that province handles its natural resource development. These capital moneys to which I referred result from what is in effect the alienation of a natural resource, and these once-for-all sales are in no way income revenue on a recurring basis.


Walter Lockhart Gordon: I wonder if the hon. member would allow me to give an answer to that particular question on second reading. I am having a calculation prepared but I am not quite ready to deal with it today.


David Vaughan Pugh: The question I have for the minister actually is in regard to the provinces on this point of resources. Did this financial suggestion come from British Columbia or Alberta or was it suggested to them? What was the discussion on it at the time of this conference. The hon. gentleman made mention of it at the beginning of his speech on July 7. He said, as reported on page 5181 of Hansard:
In the past year or so the amount of federal-provincial consultation has been increased very considerably. .. .We have had two federal-provincial conferences which have dealt with a range of matters including the important question of tax-sharing...
As a result of these consultations and our consideration of the financial problems of the provinces the government has come to the conclusion that the fiscal relationship with the provinces was in need of modification...
What I am wondering about on this resource point is this: Other ways have been suggested by myself, but it does seem to me very important indeed that when we are about to
Federal-Provincial Relations embark on a tax sharing agreement that is less promising we should know where British Columbia stands in relation to an ever expanding national resource program. It has been pointed out that such a program is extractive. In making greater use of your resources, in the forestry industry you use up your resources; in the oil industry you use up your resources, and it seem a little unfair the government has taken those two provinces, Alberta and British Columbia. Was this the suggestion of the provinces or of this government, and if it was of this government did the provinces resist such an idea?


Walter Lockhart Gordon: I would first refer the hon. member to the table which was printed in Hansard on July 7 in which he will see that under these changes the province of British Columbia will receive more than $16 million more per annum in 1966-67 than it would have received if these various changes do not take place. By the same token he will see that Alberta will receive more than $9 million more than if these various changes do not take place. Obviously, as is shown by the table, if no adjustments were made on account of natural resources revenues the increased amount to be received by British Columbia and Alberta would be even greater. That is a fact. There is no question that various changes, various formulae, could be suggested which would produce larger additional revenues to British Columbia and Alberta, or to any of the provinces if these were thought necessary, or desirable, or responsible. However, as I have pointed out, these changes will mean that the provinces as a whole will receive some $265 million more each year and the federal government will receive some $265 million less each year than would have been the case had no adjustments been made. So, with respect, I do not favour any formula which would increase these amounts even more than they are as set out in the table.
I think it is perfectly obvious that neither of the provinces mentioned volunteered or recommended a formula which would reduce what otherwise would be coming to them, but I again refer to the fact that both these provinces will receive a substantial amount additional to what they would be receiving if no changes in these arrangements were made. I think anyone is entitled to say that a particular formula would be better than those outlined here. But these are the formulae to which the federal government was prepared
5396	HOUSE OF
Federal-Provincial Relations to agree, and these are the formulae which will be encompassed in the bill to be presented in due course.


David Vaughan Pugh: If I might just go on with this in perhaps a piecemeal fashion, I take it we have dominion-provincial relationships and this has been stressed by the present government. I asked the question as to who suggested this portion of the formula stipulating the handing of 50 per cent of resource income over to the federal government? I asked the question, was it suggested by the provinces or was it suggested by the federal government? If I cannot get an answer to that-


Walter Lockhart Gordon: I will give you an answer.


David Vaughan Pugh: Then whatever the answer is, did the provinces agree to this arrangement? Also, to what extent did the federal government and the provinces explore this idea?


Walter Lockhart Gordon: In the first place, Mr. Chairman, I want to correct one remark of my hon. friend right away. There is no thought whatever, and it was never intended, that part of the resource revenues would be turned over to the federal government. All that has been suggested is that half the total of the resource revenues should be taken into account in the calculation of the equalization payments that would otherwise be payable to what we all recognize are two of the wealthier provinces of the nation.
The hon. member asked me where these proposals originated, Mr. Speaker. It is a responsibility of the federal government to make such proposals. These proposals were put forward by the federal government to the conference. It has never been the custom, in recent years anyway-it certainly has not been for some time-to ask for formal agreement on the part of the provinces. I am not sure that that idea would speed things up exactly. What is done in practice-as I am sure the Leader of the Opposition would agree if he were here-is that after discussion the federal government finally has to make a proposal, and if it is not considered to be too unreasonable or unfair, it is the proposal that is adopted. But nobody says, "Will you please sign on the dotted line and agree?"
I suppose some measure of agreement is indicated when the provinces accept the cheques that are paid to them every quarter or every month.


David Vaughan Pugh: Getting down to what I want to find out, Mr. Chairman, would the minister answer this question. Did the province of British Columbia and the province of Alberta,


on this proposition being put before them, agree with it, or were they against it? Did they express any dissatisfaction with the idea?


Walter Lockhart Gordon: I do not think it is customary, Mr. Chairman, to state what goes on in detail at these federal-provincial conferences. After all, they are held in camera and it is agreed ahead of time that any statements-certainly at the last two conferences this was agreed- shall be deferred until the end of the conference, and then a communique is issued. After that the individual premiers are free to comment as they so wish. I have not a record of what Mr. Bennett and Mr. Manning said after the conference. I remember Mr. Bennett being very pleased about one item in these calculations, and that was to make the additional 25 per cent of the estate duties or succession duties available to the provinces.


Mr. Nielsen:: Mr. Chairman, throughout this debate I have heard reference after reference made to "the provinces", reference after reference made to "federal-provincial fiscal relations" and "federal-provincial conferences", but not one word have I heard with respect to the application of fiscal theories or formulas to fiscal problems in the Yukon Territory and in the Northwest Territories.
I think I could do no better than cite at the opening of my remarks a passage from a royal commission report with which I am sure the minister is familiar, that on Canada's economic prospects which the minister headed up some years ago. At page 413 of that report, in the chapter dealing with the development of the north there appears this passage:
There is widespread recognition in Canada that the northern reaches of the country, including the northern sections of the provinces as well as the Yukon and Northwest Territories, constitute a new economic frontier. Northern Canada today and tomorrow may be what the west was in the earlier period of our history. It not only offers attraction to those in search of adventure and fortune but it has seen industry become interested in these areas as a long term source of basic materials.
I am sure the minister is aware that the Yukon has its shared cost programs, too, as does the Northwest Territories. While the forms of government are similar, there are some rather striking constitutional differences. In the first place, the Yukon has a wholly elected council and all matters concerning supply must be voted on by that council before a penny can be spent. I have asked in this house of the Prime Minister and of

others on several occasions whether provision was made, in the procedural approach of the government, to the inclusion in these federal-provincial fiscal conferences of representation by the government of the Yukon territory either as a participant or by way of an observer to sit in, so that first hand advice could be given to those who have the responsibility of making decisions which affect shared cost programs.
One does not need to stop at one department, the Department of Northern Affairs and National Resources, when considering the fiscal problems besetting the north, and the Yukon particularly. You can run through all government departments that have anything to do with human development and industrial development in the territories. Health and welfare, for instance, with hospital insurance programs and Canada pension plans to which the Yukon taxpayer, and the northern taxpayer generally, pays by way of contribution; Indian affairs, where the Yukon taxpayer also bears a burden regarding the programs implemented; the Secretary of State and his responsibility to report to parliament on the activities of the B. and B. commission. That commission has not yet visited the north country, yet the people there have very distinct views on confederation and the problems besetting Canada today. There is the Department of Public Works, with a huge responsibility that affects our economy very decidedly in the Yukon since the transfer of the jurisdiction for the maintenance of the Alaska highway from the Department of National Defence.
In the field of veterans affairs, Legion organizations and other veterans in the Yukon have very decided views as to whether or not veterans hospitals in this country shall be transferred to various jurisdictions. In the field of labour, a national labour code affects every workingman in the Yukon. Unemployment insurance and other matters coming within the direct sphere of responsibility of the Minister of Labour affect very vitally the daily fives of the Yukon workmen. In regard to the field of agriculture, we listened the other evening to the Minister of Forestry, who carries a split responsibility with the Minister of Agriculture for agricultural affairs as they affect the application of ARDA. He said he had visited every province in Canada, wishing to leave the inference that that was all there was to Canada. But he had not visited the Yukon or the Northwest Territories, where there exists a very good potential
Federal-Provincial Relations in agricultural development. The lack of consultation by this government and by its ministers, with one single exception in the Department of Northern Affairs and National Resources, shows in turn a decided lack of appreciation of what this part of Canada has to offer to the over-all fabric of national development.
It seems to me that if the taxpayers in the north in the Yukon and Northwest Territories are expected to bear a portion of the cost of the implementation of these various federal-provincial territorial programs, the people of the north should have a voice in how they are to be constructed and applied. If a hospital insurance program is to be implemented-as it was-surely representation from the two northern governments should be had as to how this implementation is going to affect the over-all economy of these two territories. Similarly with the Canada pension plan; if this is going to be implemented in the Yukon and Northwest Territories, which I assume is the intention since these areas are part of Canada, we in the north should be consulted so that the government and their advisers can obtain first hand advise as to how the application of such a program is going to affect the over-all economic fabric of our country; and when I speak of our country I mean the northern portion of it.
The last fiscal arrangement which was made with the Yukon Territory, in 1962-and the Yukon signs the same type of federal agreement as do the provinces-provided the best possible arrangement that the Yukon had ever had. I wonder whether in 1967 this sort of approach is going to prevail. I am having my fears in this regard because I see the government on every hand pulling in its horns with regard to northern development projects. The only project in the way of construction of development roads in the Yukon which is now under way is a short section of the development road from Watson Lake to Ross river. That is the only one in the Yukon this year, contrasted with the tremendous upsurge of activity in road and bridge construction during the years 1957 to 1962.
I do not blame for one moment the Minister of Northern Affairs and National Resources for this lack of appreciation of the great potential of northern Canada. I blame his colleagues in the cabinet, because I am sure he has in all likelihood made just as

Federal-Provincial Relations strong representations to his cabinet colleagues for a continuation of this development program in the north as he undoubtedly made with regard to keeping the jurisdiction over Eskimo affairs in the federal sphere of administrative responsibility. He probably did not meet with the same success, otherwise we would be seeing more of this economic activity, economic activity to which the minister did not seem to give much credence in the royal commission of which he was the author a few years ago. The minister recognized the fact that one of the most serious problems besetting the development of the north was communications, and I am sure it was having some regard for the observations made in that report by the minister that that great development program was launched by the previous government, a program which has attracted private industry and capital into the Yukon-


Gilles Grégoire: That is out of order.


Erik Nielsen: -and in the Northwest Territories private industry and private investment, which has lessened the burden on the federal treasury. And if that is out of order, Mr. Chairman, then I fail to appreciate what we are speaking of here. I thought it was federal-provincial fiscal arrangements. It is comments like that, sir, from the hon. member for Lapointe which points up his supreme ignorance of affairs northern. He should be one of the first to realize, as should his confreres from Quebec, how we in the north feel about these matters. We in the north are making a last stand. As we were prior to 1957, we are again now getting back to the idea that we should have some sort of Colombo plan in operation so that we can realize some sort of development similar to that which went on between 1957 and 1962. I would invite the hon. member for Lapointe and others who display the same sort of ignorance to visit the north, as I have Quebec, and get first hand information of which he speaks.


Gilles Grégoire: Mr. Chairman, I think the hon. member for Yukon is trying to evade the issue. I would like to speak of his ignorance of the rules of the house because he was out of order. I know the situation up north. I have been up there, and the hon. member should not say it is ignorance on our part when we call him to order. First of all, he should learn the rules of the house.


Erik Nielsen: What I have said, Mr. Chairman, must have touched a sore point with the


hon. member, otherwise he would not so righteously rise to drag a red herring across the subject matter of this debate with which I was pointedly dealing at the time of his interruption. School programs and educational costs in the north are substantially higher than in southern Canada. We look to the federal government to bear a substantial portion of the cost of educating our youth. Twenty five per cent of the population of the Yukon are still at school, and I am sure that these statistics in the Northwest Territories are similar. Large numbers of Indian people and Eskimos, for whom the federal government is directly responsible, are concerned, and this is surely a matter upon which the governments of the two territories should be heard.
I suggested a moment ago that what we might be looking for there is the application of some sort of Canadian Colombo plan. I hope that the minister and some of his less enlightened colleagues will visit the Yukon and Northwest Territories so that they can see first hand the conditions which exist. They speak about underdeveloped areas and areas requiring the expenditure of federal tax dollars. These are some of the more needy areas of the world today with human beings living in what amounts to little more than hovels.
Before 1957 we in the Yukon said that perhaps one of the solutions we might implement in order to obtain some sort of relief was to declare a war on the state of Alaska, and then lose it and apply for foreign aid from the United States government. This is the way we are beginning to feel again, and I am sure that the Alaskans, who are northerners under the skin, would welcome us into their embrace.


Stanley Howard Knowles: Is that not a bit risky? You might win.


Erik Nielsen: With the spirit of the Yukoners such as it is, I have no doubt of the outcome, no matter how many are up against us in Alaska. But what I am trying to point out is that there is this feeling there because of the decline in government investment in the north.
I know it is the view of the Minister of Northern Affairs and National Resources, because he stated it often enough during his recent visit across the Yukon and Northwest Territories, that the primary responsibility for investment capital in the Yukon and Northwest Territories must come from private resource sources. This is wrong. I

see the parliamentary secretary shake his head when I say that I feel this is wrong. I say the primary responsibility for development there is a federal responsibility. It is the federal government which has direct control over almost all natural resources above the 60th parallel, save exceptions in the provinces of Quebec and Newfoundland.
Therefore it is the federal government that must bear the prime responsibility for implementing programs and for investing risk capital in order to create the atmosphere which will bring about a partnership between government and private industry in order to achieve development programs. That was the philosophy of the previous government and that should be the philosophy today.
The construction of the development roads and bridges-I am sure the parliamentary secretary to the minister realizes this-that went on in the Yukon in those few short years have attracted more investment dollars from mineral exploration and development companies than ever before in the Yukon's history, save during the Klondike gold rush. Twenty billion tons, a huge deposit of iron ore, was discovered in 1962 by the Crest Exploration Company. If the program that was launched in 1957-58 had been commenced ten years earlier, we would be marketing that iron ore now instead of there being some doubt of it because of a concurrent discovery of iron ore in Australia, and the means would have been found to make it competitive.
I know that the minister's philosophy on this subject is to develop the resources from the northern portions of the provinces first and then, when we need this reserve which we have in northern Canada, to go in and get it. But where else in Canada, indeed where else in the world can you hold up the development of a 20 billion ton deposit of iron ore, which could have been sold on world markets ten years ago had that private investment capital been attracted by the adoption of proper development policies.


Mr. Francis:: You had your chance.


Erik Nielsen: The hon. member for Carleton says we had our chance. I am sure he will recognize the truth of this, that in those years between the beginning of 1958 to when his government took office we did more in developing Canada's north than had been done in any other time in Canada's history. He was not here then, but if he examines Hansard of 1961 or 1962 he will find I put
13. 1964
Federal-Provincial Relations on the record the differences of expenditures between the two decades prior to 1957 and the five short years subsequent to 1957.
I just have one set of figures at my disposal at the moment. In 1956-57 in northern administration $11,318,000 was spent by the Department of Northern Affairs and National Resources, and in 1961-62 there was $36,536,000 spent, an increase of almost three and a half times.
Where there was literally no investment by the federal government in improving communications-and by that I mean roads, radio and land lines-in the northern part of Canada prior to 1957, there is now full coverage by the C.B.C. in almost every area of Canada's north. There are land lines extending all the way up to Dawson City, and there are presently land lines under construction to Inuvik in the Arctic. This is the type of thing that mining companies and private risk capital are looking for, so that the country is not so remote that it will place the risk dollar they want to put into it at such a disadvantage with risk dollars invested elsewhere.
I say that the minister's philosophy, as disclosed in the royal commission report of which he was the author, is wrong, that we should not wait for a market to develop before looking for resources and looking for sources of resources to develop, but that we should be developing all regions of Canada now. The part that the government plays in this partnership between government and private industry is to provide the atmosphere which will attract risk capital. That should be done in the north by the government, more so than elsewhere in Canada, because the federal government is directly responsible for resource development in the north, and if the pattern set in the years 1957-62 continues, then this capital of a private nature will be attracted.
Passing very quickly to the Department of Northern Affairs and National Resources itself, one of the things I feel the minister should be urging, in as strong a voice as he can, is the paving of the Alaska highway. In urging this development prior to the change of government, the principle of paving was accepted and engineering studies commenced under the previous government. I understand these are continuing today. I know the hon. member for Cariboo will support me in my urging of the paving of the Alaska highway, since it passes through a great deal of his constituency, and the minister himself will be rewarded substantially in the tremendous

Federal-Provincial Relations number of tourist dollars that will be left through the provinces of B.C. and Alberta, to say nothing of the Yukon and Northwest Territories.
The minister has informed me that there are discussions going on between Canadian government officials and officials of the United States government for the paving of the Alaska highway on a joint cost sharing basis. Since we are speaking about joint cost sharing programs it would appear that in order to obtain development in the north we have to participate in joint programs with the United States, which is a good thing.
The United States government realizes the value of paving this sole continental link between the 48 states and the 49th, Alaska, and I am sure the Canadian government, when it examines the economics will find the cost of maintaining the highway, which borders on $11 million, will be more than repaid by savings effected if the highway were paved. At present two bills have been introduced, one in the United States senate and the other in the United States house of representatives, calling for the United States government to contribute up to 50 per cent of the cost of improving, reconstructing and paving the Alaska highway. If the Canadian government does not act now, and act decisively on this gesture by the United States legislators, then we may lose the opportunity of participating with them in a cost sharing program for the improvement and paving of the Alaska highway, a program which will benefit the whole of Canada.
In the last year in office of the previous government the tourist revenues to Canada came out of a deficit position for the first time. Again this year-and I am sure the same situation prevails in all parts of Canada-the Yukon is enjoying an increased inflow of tourists from the United States and from other parts of Canada. By paving the Alaska highway and thus improving that means of communication the tourist traffic could be doubled and trebled.
There are other means by which the federal government could act in order to improve the situation with regard to the fiscal burden it must bear in the light of the existence of the Yukon and the Northwest Territories and the development of those areas of Canada. One of these the minister mentioned in his report as chairman of the royal commission on Canada's economic prospects. I refer to the tax exempt period for new mines. As the minister knows, a new mine may now operate exempt from taxation for


three years. The Canadian mining and metallurgical association, the B.C. and the Yukon chamber of mines, the Alberta and the northwest chamber of mines, the conference on northern resources held in Edmonton each fall-all of these organizations have endorsed the principle that the exempt period should be increased to five years. This will do a great deal to bring new mines into production and to provide impetus for accelerated mineral exploration and development in the northerly areas of Canada. In this regard I do not coniine my remarks to the Yukon and the Northwest Territories but am referring to the northern portion of the provinces as well. This sort of policy would do more to develop resources of this type than any other fiscal proposal that the government might have. There is only one possible exception and that is participation by the government with private industry in the north in the locating of smelters.
I believe that the federal government should relent with regard to its policy of excluding the government of the Yukon and the government of the Northwest Territories from representation at federal-provincial conferences. The government of the Yukon in particular, through its wholly elected council, is requesting initially not even active participation in federal-provincial conferences dealing with fiscal matters but merely that its representatives be allowed to sit in as observers.
I know the immediate answer will be that the Minister of Northern Affairs and National Resources or somebody from that department attends these conferences on behalf of the two governments concerned. But this is surely a shallow reply because we have federal-provincial conferences dealing with fiscal affairs where a member of the federal government is in effect representing a government which is on all fours with a provincial government in respect of legislative powers and per capita responsibilities. I might inform the minister that in the Yukon there is rather deep feeling about this matter, and with some justification. The people there look to recent statistics published by the federal government which disclose that during the last decade the per capita income tax contribution to the federal coffers from the Yukon exceeded, save for one year, the per capita tax contribution by Prince Edward Island. With such comparative statistics it seems to me there is some justification for acceding to what the elected representatives

of the people of the Yukon are requesting. It is not an unreasonable request at all.
I put a question to the Prime Minister with regard to a letter he had written to the premiers of the ten provinces, and their replies show that in large measure they are not against the type of representation requested. I do not have the letters before me but to the best of my recollection there were only one or two provincial premiers who had any direct objection to this sort of representation. Most of the other premiers said in their replies that they had no specific objection.
Therefore, Mr. Chairman, if I have accomplished nothing more than to get through to the Minister of Finance with this proposal I will have succeeded indeed. The thought simply is that the governments of the Yukon and the Northwest Territories, particularly the Yukon because it has a wholly elected council as opposed to the partially appointed and partially elected council in the Northwest Territories, share the same programs as do the provinces. They pay the same per capita costs under these programs as do the provinces. They bear the same per capita tax burden in the implementation of these programs as do the provinces. Surely there should be some method for conveying the views of the elected representatives of the government of the Yukon to those who make the final decision as to what form these cost sharing programs will take. Surely we from the Yukon should be able to present our views as to how these cost sharing programs are going to affect the over-all economic fabric of the Yukon.
This is all we are asking. This is all that has been asked by the wholly elected council of the Yukon, a council which has the same legislative jurisdiction as any provincial legislature with three exceptions, in the fields of natural resources, justice-


The Deputy Chairman:: Order. I must interrupt the hon. member for Yukon to advise him that the time allotted to him has expired.


Erik Nielsen: -and the introduction of money bills. Thank you very much.


Mr. Grafftey:: Mr. Chairman, in dealing with the particular question of federal-provincial financial arrangements I feel at the outset it is almost inevitable that we touch upon the general field of federal-provincial relations. I think most members in the house this afternoon will readily admit that the general subject of federal-provincial relations is perhaps one of the most, if not the most, impor-
Federal-Provincial Relations tant subjects confronting parliament and the nation at this time. I do not want to exaggerate but I think many of us would agree that to a very large extent national unity itself depends upon our resolve and determination to find solutions to the problems of federal-provincial financial or taxation arrangements and federal-provincial problems in general.
With this in mind, Mr. Chairman, I intend during my brief remarks this afternoon to treat the subject at hand under two headings. First of all, I should like to refer to some historical and contemporary background material pertaining to the subject and especially underlining the Progressive Conservative approach to the general field of federal-provincial relations and federal-provincial taxation arrangements in particular. Second, I should like to underline some basic problems involved in the whole question today before coming to what I hope will be considered some positive conclusions.

Mr. Chairman, allow me to read a few brief considerations which I deeply value about "unity within diversity."
The Canadian constitution is the first in the world to combine a federal government system with a parliamentary system.
I have always felt that a federal government system should try to conciliate a certain degree of unity with a certain degree of diversity.
In my opinion, Canada has never been and will never be united according to the principle of the melting pot.
As everybody knows, we have a vast and thinly inhabited country. Even if our population were to increase materially and our means of communication to become faster than ever, I would still believe that "unity in diversity" should remain the basic and essential factor governing our attitude towards Canada and its people.
Our federalism is based on a particular psychology in the variety of our peoples and provinces. Union is sought, but not unity in the matter of languages, cultures, religions, etc.
This attitude, based on "unity in diversity" should always be held as a positive and dynamic factor of our national character.
In a realistic perspective, that fundamental diversity of our national life raises many problems in the edification of a nation. We are facing some of those problems today. By merely paying lip service to the necessity of mutual respect and understanding, to the necessity of co-operation, we do not stress enough that attitude which advocates a policy of "live and let live". An all-embracing co-operation is undoubtedly essential, but the sooner we shall emphasize the positive glories of our diversity, the sooner the number of those who talk of a confederation crisis will diminish.

I felt, Mr. Chairman, that as I entered into the substantive part of the remarks I

Federal-Provincial Relations intended to make this afternoon I would put what I might term as a few keynote phrases on the record in French. It has always been my impression that one of the basic tenets of Conservative principles lies within the idea of local self-agency. I have said this in our House of Commons before, that we on this side of the house feel that people on the local level often know what is best for themselves and how best to govern their own affairs. In other words, the diffusion of powers constitutes a fundamental idea in our approach to federal-provincial relations.
This has been said time and time again, Mr. Chairman. Of course, we must have a strong federal government which must always remain strong and activist-I underline the word "activist"-within its constitutional responsibilities. There are those who would argue that Macdonald and Cartier advocated a strong central government. Well of course they did: They had no other choice. Before 1867 the parts existed but there was no whole. It was the primary task of the fathers of confederation to create the whole and to defend it. At the same time Macdonald and the other fathers of confederation profited from the experience of the drafters of the United States constitution who had witnessed the breakdown of their original central government which had been given too few powers by the original articles of confederation.
Briefly, Mr. Chairman, Conservatives fight extremes wherever and whenever they exist. In the United Kingdom for example a Conservative administration defended strong central government in the last century. They defended it against privilege. Yet today a Conservative administration in England fights against the tendencies toward over-centralization, if you will, of the socialist state. In brief, Mr. Chairman, the Conservatives' respect for diffusion of powers dictates that we discourage any exaggeration toward centralizing tendencies.
When we say that our party was the party of confederation, this means much more; it has a much greater significance than the mere fact we were in power in 1867. The spirit of Macdonald and Cartier means much more than that, Mr. Chairman. It means you have two great languages and two great cultures forming the real glory and the real strength of Canada. Today the same spirit includes Canadians of many cultural and ethnic origins as we work together to build our country. This spirit of unity in diversity keynotes the fact that the melting pot theory is not applicable to the Canadian mosaic. We have


noticed, sir-and the Minister of Finance made reference to this-we have noticed that during the war years and the immediate postwar years we had strong centralized governments in Ottawa. I think it is generally recognized that today the pendulum is now swinging towards the provinces at a time when the national government has been directed by a series of minority administrations.
I repeat, and probably will repeat again in my remarks, that I believe we should always have a strong and activist central government, but it should be strong and act only within its constitutional responsibilities. The suggestions and proposals I make this afternoon are not based on a defence of the centralist position; they are not based on a defence of provincial rights. They merely recognize, Mr. Chairman, the facts of life in Canada in 1964. Disraeli criticized the Whigs for overcentralization while they divided sections of the country against one another. In Canada, sir, the same can be said of successive Liberal administrations which have encouraged excessive centralization based on a divide and rule approach. Mr. Lesage recognized this, and today in the province of Quebec the Liberal forces are splitting in two. Liberalism in Quebec has never said the same thing as it has said in the rest of Canada-


Mr. Dupuis:: Again?


William Heward Grafftey: The Minister without Portfolio says, "Again". I will keep saying it again and again, and it is becoming quite apparent these are the facts of life.


Yvon Dupuis: You are entirely wrong.


William Heward Grafftey: Then why are you splitting in two in the province of Quebec? You cannot answer that. Liberal forces are splitting in two in the province of Quebec, Canadians in general, and Quebeckers in particular are realizing it is bad for our country and for the province simultaneously to have Liberal governments in Ottawa and Quebec.
Since the present government has come to power in Ottawa Canadians have become appalled at its record in the field of federal-provincial relations. I have no reason to take any pleasure from this fact because this government, I regret, has unnecessarily hurt national unity at a time when all Canadians are preparing to celebrate their centenary. Conservatives believe that because a man is intensely loyal to his family and church there is no reason to hold that his love of country

is diminished. In the province of Quebec our loyalty to provincial ways and customs and to the French fact in no way lessens our true spirit of Canadianism. That Quebeckers love their province does not diminish their love for Canada and the Canadian family. Quebec has always looked upon confederation as a pact under which the provinces have their rights-something which the Prime Minister and his cabinet colleagues do not seem to realize. If Liberal sectionalism told- and tells-the rest of Canada that this is an extreme type of autonomy which means no co-operation with Ottawa and the other provinces, so much the worse; the story of Cartier, Macdonald and Diefenbaker is a different story.
The Minister without Portfolio, again speaking from his seat, jests. I know all about his smear campaign-


Yvon Dupuis: I am not listening to you. I am reading my paper; that is all.


William Heward Grafftey: I know the hon. gentleman reads many papers in this house. No one did more to smear our leader in the province of Quebec. But let me quote from two great men who understood Conservative principles-Salisbury and Burke. In my view these general observations illustrate the universality of Conservative principles even in Canada at the present time. The following is an excerpt from a speech by Lord Salisbury on Conservative policy at Newport on Monday, October 7, 1885. It illustrates the persistence of Conservative advocacy of a more equitable balance of initiative and authority between central and local governments.
He said:
Now bear it mind what true reform in local government means. It does not only mean-what I quite admit-that the local authorities should be popularly elected: but it means that, when you have got at what you want, when you have provided the proper constitution of local authority, you must provide that the local authority has sufficient powers, and that it gets those powers by diminishing the excessive and exaggerated powers which have been heaped on the central authorities in London.
Now let me quote, pertinently I believe, from a speech by Edmund Burke, because it illustrates the traditional Conservative attitude toward the morbid concentration of power in the modern state:
It is boasted that the geometrical policy has been adopted, that all local ideas should be sunk, and that the people should be no longer Gascons, Picards, Bretons, Normans; but Frenchmen, with one country, one heart, and one assembly. But instead of being all Frenchmen, the greater likelihood is that the inhabitants of that region will
Federal-Provincial Relations shortly have no country. No man ever was attached by a sense of pride, partiality, or real affection to a description of square measurements. He never will glory in belonging to the chequer number 71, or to any other badge-ticket. We begin our public affections in our families. No cold relation is a zealous citizen. We pass on to our neighbourhoods, and our habitual provincial connections. These are inns and resting-places. Such divisions of our country as have been formed by habit, and not by a sudden jerk of authority, were so many images of the great country in which the heart found something which it could fill. The love of the whole is not extinguished by this subordinate partiality. Perhaps it is a sort of elemental training to those higher and more large regards by which alone men come to be affected, as with their own concern, in the prosperity of a kingdom. To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ, as it were) of public affections. It is the first link in the series by which we proceed towards a love of our country, and of mankind.
Sir, I feel these citations are very pertinent to my general opening remarks. Let me close this portion of my observations by saying that Conservative principle with its emphasis on local self agency and its attitude towards the provinces has a most valuable and distinctive contribution to make to the contemporary Canadian scene.
At this point, under the second heading of my remarks, I should like to emphasize a few basic problems in the field of federal-provincial relations. It is my opinion that a great disservice is done when the ordinary fiscal problems connected with federal-provincial relations are confused with the general question of bilingualism and biculturalism. I fully realize that many of the legitimate aspirations of my province are obviously linked with economic considerations. But currently too many people both inside and outside Quebec are confusing the normal demands for the tax dollar with the question of English-French relations. The results are harmful.
I believe there are two main factors militating against a solution to the question of satisfactory federal-provincial fiscal arrangements at the present time. The first, as I said, in my general remarks, is the tendency of the present Liberal administration toward increasing centralization at a time when decentralization is a "must". The second is the lack of consultation with the provinces and the woeful inadequacy of permanent consultative machinery in relation to the provinces. As to the first factor, we should not really be surprised by the current push toward overcentralization in Ottawa today. We in Canada are blessed with a fine civil service

Federal-Provincial Relations but the Prime Minister, a former senior civil servant himself, surrounded by the Minister of Transport, the Minister of Industry, the Minister of Trade and Commerce, the Minister of Justice and others, all former senior bureaucrats is, consciously or subconsciously, taking a centralist position which in my view is simply out of step with the times today.
I repeat, we must have a strong central government, but it must act within its constitutional responsibilities. The present government, however, is neither active nor strong. The Prime Minister rightfully gained a reputation as a wise negotiator. But now he is Prime Minister and he must lead. If he continues to negotiate, and if as well he continues to retain this slavish attachment to outmoded centralist doctrine, the resulting damage to national unity will be incalculable. No real agreement with the provinces on tax and financial matters will ever be attained in these circumstances.
The second factor aggravating the present situation relates to the woeful inadequacy of the permanent consultative machinery dealing with problems arising between Ottawa and the provinces, and the refusal of the present government to consult with the provinces on a genuine basis in the true spirit of co-operative federalism. This government has consulted only under pressure, often too late and, unfortunately for the country only when the damage has been done. The result has been an inability to implement the major part of its domestic program.
For example, the Prime Minister says he has already created a secretariat for federal-provincial relations. But when I made specific inquiries I found the only people in the office are a part time employee-the director-and an assistant. The part time director is also an assistant secretary to the cabinet. So this in fact is merely a sham. After this procedure was set up the Minister of Justice had the effrontery to go into Montreal and before the Canadian club say that this government had set up a federal-provincial secretariat in the Prime Minister's office. This is not the kind of secretariat I am thinking of; I am thinking of a federal-provincial secretariat based on the ARDA approach and based on the national resources approach which was implemented by the previous administration under the direction of the now right hon. Leader of the Opposition. What the Prime Minister has created in this regard and what he seems to intend to do is simply not enough.

Unless permanent consultative machinery is immediately improved, let me cite just two examples of things that could happen. The President of the Privy Council, to whom the Prime Minister intends to delegate the work of planning priorities, will virtually be unable to do his job without close liaison with the provinces. Another result would be the central government's inability to exercise proper control and direction over monetary policy. For example, what is going to happen when the province of Quebec has such great control over a funded pension plan? Consultation must be a permanent thing; the machinery for consultation must be permanent. Consultation with the provinces must be improved immediately. I know that I seem repetitive on this subject, Mr. Chairman, and my friends have often asked when I am going to stop whipping a dead horse; but I am going to speak and speak on this subject until the administration opposite takes at least partial cognizance of my suggestions.
At this point I should like to conclude my remarks by making some specific suggestions and proposals. Before further tax agreements can really be concluded with the provinces the constitution must be modernized; we must have a fresh look at sections 91 and 92 of the British North America Act and the question of overlapping jurisdictions. We in the opposition are calling for a conference of federal-provincial leaders. Let us put first things first. Before satisfactory agreement on tax matters can be reached, let the federal and provincial leaders meet in order to redefine federal and provincial constitutional powers and, amongst other things, as the right hon. Leader of the Opposition said, seek proper constitutional amendment procedures here in Canada. Let it not be a meeting just for a few days. Much preparation-and other hon. members have made reference to this fact-will be necessary. The meeting itself might take many days; but I for one feel sure that the results will be more than worth while.
We might find that apart from the equalization formula and related principles many will agree that generally speaking the government that spends the tax dollar should raise it. If a provincial government, for example, does not participate in a federally sponsored plan, is it not preferable for the provincial government in question to recapture compensatory taxation powers rather than receive an annual, lump sum payment from the federal treasury? I just throw this out as a suggestion, Mr. Chairman.

Certainly the federal government has its responsibilities for maintaining and encouraging minimum standards in the economic and social fields. In Quebec, for example, wage levels and farmers' incomes are far below national standards. Poverty in our cities in Quebec is far greater than the national average. These conditions must be remedied by strong provincial and federal governments acting within their constitutional responsibilities. But this must be done consequent upon the conference to which I have referred being called immediately. While the Ottawa and the Quebec governments wrangle, the economic position of our poor in the cities and in the countryside, of our farmers and workers in the province of Quebec, does not improve one little bit. Much of the contemporary problem-I will not say all of it-in my province today is of an economic nature.
The vast majority of the people in my province know that we shall work out these problems within the framework of our confederation. Terrorists and ultra-separatists spurred on by alien forces have already taken a toll. I do not say this in a sensationalist way, but one might truly believe that the classical Leninist doctrine approach has been employed to create national disunity. I say these things not in the spirit of Mc-Carthyism.
Once there is agreement, after such a meeting, on the constitution as suggested by the right hon. Leader of the Opposition, and the meeting redefines the powers of and modernizes the constitution, federal-provincial tax problems and financial arrangements will be more easily arrived at. Then, and only then, an active central government will be able to take a strong federal position within the constitution. There will be no separation; there will be no opting out of confederation, just as a century ago there was no opting out of the United States union. But let us profit from many of the unhappy aspects of their experience. I repeat, Mr. Chairman, future tax and financial arrangements should only be concluded after such a federal-provincial constitutional conference is called. And it must be called immediately because from what the Minister of Finance said a few minutes ago, I am very much afraid that the present government, in going into these taxation conferences in the near future, are once again about to put the cart before the horse, which is something they seem to have a knack of doing-a penchant for doing, if you will, in federal-provincial problems.
Federal-Provincial Relations
My second suggestion relates to the immediate necessity for improving permanent consultative machinery; a real secretariat for federal-provincial affairs, based on the modern resources approach and the ARDA approach commenced by the last administration which I supported in this house, must be established. This type of permanent secretariat for federal-provincial affairs should be established on the prime minister's and premier's level.
It is my hope that these observations and proposals will be of some use at a time when all Canadians of good will are searching for avenues of understanding and moderation. Unity in diversity should be the keynote of this approach, at a time when, as 1 said before, the voices of extremism from all sides have long since received far more than their share of attention. Hard work and the willingness to listen and understand will be required. Yet realistic optimism dictates that good sense will prevail. I for one know that 1967 will be a great and happy celebration for Canada and all Canadians.


Mr. Flemming (Victoria-Carleton):: Mr. Chairman, I do not rise to oppose the resolution as presented by the Minister of Finance. I rise for the purpose of making some observations in connection with it. We have been reminded by the minister in his opening remarks in presenting the resolution to us that we should not be misled by the simple form of the resolution into thinking that it is not complicated and is not complex.
So with that in mind I approach the general substance of the resolution itself, and I say immediately that my experience and sympathy throughout my political life has been almost entirely-at least up to 1960 entirely-from the viewpoint of the provinces rather than the central government.
We now find that this subject which is before us is of tremendous importance. Federal-provincial relations in a country such as ours are always important; today I think they are more than ordinarily important. This has been brought about for a variety of reasons. We have heard the reasons referred to this afternoon in a good many most eloquent speeches. I listened with great interest and some benefit to the speech of my hon. friend and near neighbour, the hon. member for Pontiac-Temiscamingue. I also listened to the hon. member for Yukon advancing the general needs of and urge for consideration which he felt for that part of Canada which he represents. We have just listened to our great

Federal-Provincial Relations friend, the young member for Brome-Missis-quoi, who gave the house in my opinion a very fine illustration of his intense conviction for the need for co-operative action in order that this great and dear country of ours shall continue to grow, flourish and prosper as an entity.
Consequently I find myself unable to talk of co-operative federalism. To me it is quite a difficult phrase to define. I might go to the dictionary but I would still find it difficult to define. I think there exists the general opinion, both inside and outside the chamber, in the hearts and minds of most Canadians that this is our country. It is Canada, and it is a Canada which is a whole rather than a series of parts. It is with that in mind that I confess I find myself changing my viewpoint to a certain extent; not that I do not want or think it necessary to advocate any further the needs of my native province, because I do. I would be derelict in my duty if I did not speak on behalf of my province and on behalf of the Atlantic provinces generally, because that was my training and that is my urge. But I do think we cannot get away from the general idea that we as Canadians must recognize the fact that we must view our country as a whole; that in discussing federal-provincial relations we shall consider nothing which should be done so far as the provinces are concerned at the expense of a strong central government.
I want to refer in general terms to some of the events in which I have been interested and of which I certainly have some knowledge with regard to dominion-provincial relations. During the period 1944 to 1952, as a member of the opposition in a provincial house I listened many times to the premier of the province making reports to the legislature concerning his success in conducting negotiations on behalf of the province, as one of a group attending a dominion-provincial conference. I remember many times his saying that the announced proposition was as good a proposition as was possible to make in light of the responsibilities of the federal administration at the time. We criticized as much as we could and to the extent that our intelligence and general knowledge permitted us. But generally speaking I was impressed by those words-that the province got as good a deal as it felt was justified in the light of the responsibilities of Canada as a nation. That was the sort of thing I listened to during that period of time. Then after 1952 I had some connection with provincial conferences.

Then a day or two ago, last Thursday to be exact, I listened with great interest and admiration to the speech of my leader, the Leader of the Opposition. I thought it was one of the finest speeches which had ever been delivered in this house. Not only was it fine from the point of view of advancing his arguments with the maximum amount of impression and knowledge, but he also suggested the particular need of today for the government to take some leadership in sponsoring what might be considered a "fathers of continuing confederation conference", a sort of new fathers of confederation conference. I am sure that is what my hon. friend from Brome-Missisquoi had in mind a few moments ago-another fathers of confederation conference, but this time a fathers of continuing confederation conference.
In my opinion, it is just as important and so much easier to keep something going which is already going than it is to start something new. I was greatly impressed with the speech of my leader, and I feel that the government can well take his suggestions to heart, and I hope they will. I trust that from the seed which he planted, which seed has been watered by quite a few hon. members here this afternoon, will come something which will be of great benefit to our country as a continuing great nation.
May I call it six o'clock, Mr. Chairman, and continue my remarks at eight.


Lucien Lamoureux: Order. It is my duty to announce that the questions to be raised at 10.30 this evening are as follows:
The hon. member for Kootenay West, federal participation in developing Fraser river; the hon. member for Port Arthur, federal participation in mining developments, Timmins, Ontario; the hon. member for York-Scarborough, provision of limousine service to Toronto international airport.
It being six o'clock I do now leave the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Hugh John Flemming: Mr. Chairman, when the committee rose at six o'clock I was referring to the speech made by my right hon. leader and to the fact that

in it he had referred to a speech made by the premier of Newfoundland in June, 1955. He quoted some extracts from that speech, and it just so happens that I listened to Premier Smallwood when he was making it. I was encouraged then because I felt that the government of the day would pay more attention to Premier Smallwood than to me. I am not complaining; this is just a statement of fact.
I want to quote some of the words Premier Smallwood used on that occasion, as I think they are most important. He said:
Before we become second class citizens of Canada we will show the other maritime provinces how to get out of confederation.
This indicated that at that time the premier of Newfoundland felt very strongly about the deal the Atlantic provinces were getting from the government of the day. The Prime Minister was a member of that government and also the Secretary of State for External Affairs. I am not so sure whether my hon. friend the Minister of Transport also was a member.


John Whitney Pickersgill: What was the year?


Hugh John Flemming: 1955.


John Whitney Pickersgill: Yes, I was a member of the government.


Hugh John Flemming: So, the
Minister of Transport pleads guilty also.


John Whitney Pickersgill: No, I don't plead guilty.


Hugh John Flemming: Whether he pleads guilty or not, the point is that the government of that day disregarded Premier Smallwood's words and paid no attention whatsoever to them.
I want to come to the question of the discriminatory features which existed prior to the advent of the Diefenbaker government in 1957, and I want to quote some of the words which I myself uttered at the conference of 1955, speaking on behalf of the province of New Brunswick. I said this:
Yet, Mr. Chairman, most of us will admit that certain deficiencies and weaknesses in this course of national development have become very evident. It is true that Canada as a whole gained in prosperity and social security and all provinces have made considerable progress since 1945; yet, at the same time, the discriminatory features of our federal system have not been overcome and, in some respects, have tended to grow greater over the years.
New Brunswick has derived considerable benefits from federal social security provisions and no doubt this is true in any province where the low income groups are relatively great in number and
Federal-Provincial Relations
the per capita income tends to be low. Yet, although supplementary family income from social welfare sources is welcome and useful in raising regional standards of living, the fact remains that such matters still depend and must always depend upon the regional economy in the final analysis. It will be the submission on behalf of our province that this matter can only be dealt with by a national policy specifically designed to improve regional income through helping to increase the productive capacity of areas which fall below certain indices to be determined.
At that conference the second argument that was advanced was that future tax rental agreements should include a factor that would take into consideration the taxable capacity among the various provinces, and now, some years later, I say to the Minister of Finance that taxable capacity and ability must be taken into account in all considerations with the provinces at all times.
In 1955 we of the Atlantic provinces asked the government for special adjustment grants to make up our lack of taxable capacity or, in very plain language, our lack of ability to pay. However, there was no response and no action from the Liberal government of that day. We were told it was impossible to differentiate as between one part of Canada and another, and there was no response to that request until the government led by the right hon. Leader of the Opposition came into office.
I shall tell you, Mr. Chairman, where you can find the record of what took place at that time. As set out on page 5294 of Hansard for July 9 last you will see that the Atlantic provinces adjustment grants listed there as item No. 8, and you will see that from the year 1958-59 in which they were introduced they totalled $25 million for the succeeding four years, and at the beginning of 1962-63 they were raised to $35 million and have continued on that basis until the present time. I simply wish to point out that this government is taking the benefit of a good example set by the previous administration in recognizing what was done in dealing fairly with the Atlantic provinces.
I also want to call the attention of the committee to the table placed on the record by the Minister of Finance, as recorded at page 5184 of Hansard for July 7 last, and to his remarks with respect to it when he says it shows the difference between the November 1963 proposals and the proposals of April 1964. There he states that the government of which he is a distinguished member had a change of heart in the matter of a few months and decided to give our provinces

Federal-Provincial Relations more money, but he does not say why it refused to give the provinces more money in the first instance.
Since an increase is shown I, as a New Brunswicker, am pleased to see my province will benefit, but in the minister's speech he did not say where he proposed to get the funds that he is abating to the provinces. They amount to a considerable sum of money, an additional $87 million for the current year, an additional $171 million for next year, and an additional $246 million for 1966-67. I wonder whether the Minister of Finance has forgotten that expression, "a balanced budget" which he used many times in this chamber when he was over here in opposition. I wonder whether he would acknowledge that he favours deficit spending indefinitely and forevermore.
Does he favour deficit spending in a buoyant economy? It is my understanding of economics, to the extent that I may have some knowledge of that subject, that deficit spending is used when things are declining, when it is necessary to make provision for employment and when it is necessary to do something of an unusual nature to stimulate the economy. That is the time when, according to the economists, deficit spending is justified. We hear our friends opposite bragging day after day about the buoyant economy, while at the same time they do not say where the funds are going to come from to balance the budget. That expression has not been used by them since they were over here on this side of the house.
So as a Canadian I am wondering where the minister proposes to get the money which he is abating to the provinces. In my opinion there is only one place to get it and that is by additional taxation. I think he owes it to the house to say what he proposes to tax, on what items he is going to impose tax and on what items already taxed he is going to raise the tax. These are things which I think we in this house have a right to know and to which so far he has made absolutely no reference at all. It seems to me that he owes the house more explanation than he has given us up to now.
I find no fault with the extra money for the provinces. I find no fault with the expenditure of money itself. As a matter of fact, I am rather favourable to the spending of money by governments, but I do not think the spending of money by governments should go on at a time of a buoyant economy when presumably things are as good as they can be, and still make no attempt to balance the


budget, but pass the increasing debt along to our children and our children's children to pay some time in the future. In my opinion such a policy is completely unjustified at the present time and the house certainly should ask the Minister of Finance and the government to explain what they are going to do about it.
I think the minister should also have some understanding with the provinces, and perhaps through them with the municipalities as well, relative to financing. I have in mind that we as a parliament consider that the control of the monetary system, control of inflation and in general the credit of the country are and should be in the hands of the federal government. I do not think there is any question about that in the minds of any of us. But when the provinces and the municipalities are allowed to budget for deficits year after year, then year after year the money stream must of necessity be increased by that amount. It seems to me that unless there is an element of control in some way, either by agreement or otherwise, we cannot help but be bound to get a degree of inflation, with all the evils that go with it. So I think from the standpoint of the general good of Canada there must be an understanding with the provinces so that the whole question of credit, money supply and the monetary system in itself can be determined in the light of the economics of the whole country.
The Leader of the Opposition has suggested a conference on the whole question of federal-provincial relations. This afternoon the minister had some advice as to certain machinery that had been set up at the last conference with the provinces, but in my opinion that is purely on an administrative level. We have to have something more than just a set-up of people who are charged with duties and responsibilities of administration in order to deal with this most important matter of the relationship between the federal government and the provinces, both economic and political.
As I said before the supper recess, in my opinion it has become necessary to set up a second fathers of confederation conference so that there may be a genuine attempt made at the highest level possible to meet the political and economic difficulties which exist in this country, and deal with them with perhaps about the same state of mind that existed 100 years ago. We have no way of knowing that the difficulties of the fathers of confederation then were not greater even

than the difficulties facing us today. I do not think we have any particular reason to feel that the particular difficulties facing us today are insurmountable, not by any means; but I do think it is the duty of the government to furnish leadership to the country at the present time in this matter. They should set up a conference of this nature, and the mechanics thereof are a matter which they in their judgment might determine. I think something certainly should be done and in my view the suggestion put forward by my leader is one which deserves the greatest amount of consideration.
Such a conference should be a meeting of the representatives of the federal and provincial governments. It might take the form of a centennial celebration to a certain extent. We are getting close to the 100 years. I would hope that such a group would be just as dedicated as the fathers of confederation were 100 years ago and just as determined to succeed as they were then. I think they would be no less determined to keep Canada together than their predecessors were to establish this great nation.
There should be some knowledge available to the federal government relative to the budget position of all the provinces. As has been pointed out many times in this chamber by the hon. member for Brome-Missis-quoi, there should be the closest kind of cooperation. I see by the clock, Mr. Chairman, that my time has expired. I am pleased to have the opportunity of expressing the opinions I have voiced in the last 20 minutes and in the 10 minutes immediately before the supper recess. I trust the minister will take due note of all these words of wisdom which have fallen from my lips and I thank the house for listening.


Eldon Mattison Woolliams: Mr. Chairman, following the hon. member for Victoria-Carleton, a former premier, may create some difficulty for me. It was on July 9 that the motion really came up for debate following the statement the evening before by the minister. The resolution we are discussing this evening is in these words:
That it is expedient to introduce a measure to provide for the revision of certain fiscal arrangements with the provinces and to provide adjustments of fiscal arrangements and taxation provisions consequential upon the provision of youth allowances to parents resident in certain provinces.
In dealing with the sharing of taxation between the federal government and the provinces, some of us who are not quite so eloquent as some of the orators we heard this
Federal-Provincial Relations afternoon may want to come to grips with the economics of the situation. I think that all members of parliament, no matter what government is in office, feel somewhat sympathetic toward the minister of finance. He is the minister in the cabinet who has to find the money for all expenditures. He is the minister who has to pay the bill resulting from any arrangements made between the federal government and the provinces.
All of us appreciate one fact, that every government at whatever level, the local level, provincial level or federal level, is struggling to meet the bills for certain programs today. We have heard a lot about the province of Quebec today, but whether it is western Canada, Ontario or the maritimes the local governments are involved in a great struggle to try to find the finances necessary to enable them to carry out the jobs they are supposed to perform.
The provincial governments are practically in the same boat. Some governments claim they have done a better job of financing than others. I saw my good freind, the hon. member for Red Deer, just recently talking to the Minister of Finance. He may have been discussing debt free money with the Minister of Finance. In the last few years I know the Minister of Finance would have been most interested in debt free money-at least, free of debt. The hon. member for Ontario suggests that the present minister voted for it. I can appreciate that.
Then, one comes to the point of local government. In any city, whether it is my home city of Calgary or any other city in Canada, property taxes have now reached such a height that the advantages that governments provided during the last ten years, whether they be Conservative governments or Liberal governments, through the National Housing Act in assisting the average worker to get a home, have been lost. The property taxes at the local level are so high that many workers are unable to live in these houses that we, in parliament, have tried to provide.


An hon. Member:: And wait until next spring.


Eldon Mattison Woolliams: They will probably be higher. The provincial governments say they cannot give any more help to the municipalities because they are having trouble balancing their budgets. If you are great jugglers, such as the premier of British Columbia or the people in the debt free province of Alberta, you do not run into these problems because
5410	HOUSE OF
Federal-Provincial Relations you have good bookkeepers. My good friends on my left clap. The fact is if you add up the municipal debt in Alberta and the provincial debt of Alberta you will find that on a per capita basis it is as high as that of the province of Manitoba or the province of Saskatchewan, if not higher.
I have never been too friendly with the socialist government. I have said some very unkind things about them. However they balanced their budget and they left their house in very good order when they turned it over to Mr. Thatcher.
The point I want to make is that all levels of government are struggling. We pass legislation to help people obtain houses, give them new houses or let them live in better apartment blocks. But property taxes are so high, provincial tax levels are so high-and so are federal levels-that we are all feeling the squeeze. The problem finally falls on the shoulders of the Minister of Finance. If he does not perform some miracle, everything goes wrong. I am not going to enter into a debate on the criticisms of a former minister of finance, Mr. Donald Fleming. There was a lot of abuse heaped on him. There has been a lot of abuse heaped on this Minister of Finance. When he goes, there will be a lot of abuse heaped on the next minister of finance. I am sure the former minister of finance, who is sitting here to my left, will corroborate the fact that you have got to find the money somewhere, and you cannot perform a miracle.
I am sure that if I were a mouse and wandered into a meeting of the Liberal cabinet or the Conservative cabinet, I would hear the minister of finance saying, "Just a minute; stop; where is the money coming from?"


An hon. Member:: Are you the mouse that roared?


Eldon Mattison Woolliams: I would not know about that, but I would say that I would put up a good roar if I were a mouse.
Then we come to the second problem. These are problems we have to face at the economic level. We are talking about equalization payments across the board for all provinces. If we were to return to the old scheme whereby each province collected its own taxes, that is income taxes and succession duties, we would find this worked a hardship on some provinces, not because wealth was not produced in those provinces but because after the people built up wealth in a province


they retired to some other province. For instance, in so far as the prairie provinces are concerned, people retire to British Columbia where the climate is a little better for them to spend their declining days.
When you look at succession duties you find that the duty on stocks and bonds is paid at the point where the company has its headquarters. As a result provinces like Saskatchewan, and even Alberta have suffered from this regulation. This was true, even before Alberta had this windfall-and whether that was the result of the government or oil, I have never been able to determine. My friends seem to indicate they think it resulted from oil. I still want to be fair and I say this provincial government in Alberta has done a pretty good job. Perhaps I am a little prejudiced.
The point I want to make is that this tax revenue falls to the province in which these stock certificates have their headquarters. Now we have got into a new kind of taxation, and some people call this centralization. I am not going to agree with one speaker from this side this afternoon who indicated we do not need a strong central government, because I think we do. I am going to have something more to say about that. The point is that in attempting to arrive at a system of taxation that would be equitable and fair for all Canadians we said, "All right, the federal government is going to collect these taxes. Then we will try to distribute them provincially throughout the land on an equitable basis." I am referring to succession duties and income taxes. This resulted from the fact that people would sell their capital or other assets at a certain price and retire to another province which would benefit from the succession duties.
First of all, over the land you had an equalization of the system of taxation. This was necessary. I think I can quote a very distinguished premier in a few minutes on this point. Everyone in the house, irrespective of where he sits, will admit that a Conservative government did a very fair job of setting up a new equalization system so far as the provinces are concerned. I have been sometimes critical of Premier Lesage. Sometimes you have to see what other people are saying and thinking. Sometimes the people are called fanatics and whom I call the insane people, sitting on the fringe, seem to get more publicity because the people who think logically forget to get their ideas across to the people in this land. Mr. Lesage

paid quite a compliment to the former Conservative government, as will be seen when one reads page 28 of the brief he presented November 25, 1963. Perhaps I had better name this report. It is a statement by Hon. Jean Lesage, premier, minister of finance and of federal-provincial affairs, delivered to the federal-provincial conference in Ottawa, November 25, 1963. It is interesting to note that he admitted what had been done. This is what he said:
From several vantage points, the results of the 1960-61 federal-provincial conference-
I pause there to say that certainly was a conference under a Conservative government.
-showed progress as compared with the former situation.
Mr. Lesage said this when he met with the new government.
We do not underestimate this progress.
In other words, he did not underestimate the progress made during a Conservative regime so far as establishing an equitable basis for sharing taxes was concerned. I hear one of my friends laugh. Well I guess he laughed at Mr. Lesage because he laughs at other Liberals. These are Mr. Lesage's words, not mine. I quote again from Mr. Lesage:
On other points however we have several reservations which show why we are bringing these matters up again today.
I might say when you read the whole brief presented by Mr. Lesage you will find he says in effect "We have made these points before; we are not adding anything new on the record, but we have made progress under a Conservative government and we hope we are going to make as much progress under the new Liberal government." This is the compliment that was paid by the premier of Quebec. So there was a beginning so far as this matter is concerned, a very sound beginning.
We come back to this situation. The Conservative government did work in conjunction with some of the premiers to bring about more equitable taxation between the local level, the provincial level and the federal level. The provincial premiers admit this, and this was a sound beginning. I am going to say this: I should like to conduct a Gallup poll in the province of Quebec. We hear a lot from a certain premier, and I do not know whether or not there are fringe benefits, but there are fringes, anyhow, on the question.
I question whether the people of the province of Quebec think exactly the way these people who pump out their propaganda would 20220-343
Federal-Provincial Relations seem to indicate. I think they are as good Canadians as the people of Ontario and western Canada. I believe they think of Canada first. I have never found fault with any premier who comes down to meet the prime minister of Canada, whether the prime minister was Conservative or Liberal, and stands up for his province.
Look at what Alberta has to say. I have paid a compliment to the premier of Alberta and I will pay him another. He presented his brief, and he said exactly the same as Premier Lesage-that a sound beginning had been made under the Conservative government and that it was naturally hoped that this good work would be carried on by the new administration. It is a strange thing that every time the Liberals come in there is some sensitivity in reference to confederation. I do not believe that sensitivity exists to such a degree as is made out. I think it comes from those who want to pump out propaganda and generate-"generate"; that's a good word; it is better than the one I would have used-a whole lot of trouble. If Premier Lesage says he is satisfied to the extent that he has made progress, I think he is satisfied, because I do not think there is anyone in Canada who will say that Premier Lesage is not an aggressive premier who speaks up for his province.
What does the premier of Alberta have to say? The Alberta brief is not as weighty. There is not so much raw material, perhaps. The Alberta program probably did not rate so big a brief. The former minister of finance said we had more oil and therefore did not need as much money. But I do not think Premier Manning would go along with that, because we are always looking for new revenue. What did he say? He said that among the specific matters to which the conference should give attention, the government of Alberta regarded the following as being of particular importance. Then three points are mentioned, and I would say this: These three points are practically identical with the requests contained in Mr. Lesage's brief. This is what he said:
The necessity to evolve an arrangement under which each government will be assured sufficient financial resources to enable it to discharge its constitutional responsibilities without loss of its rightful sovereignty and without imposing oppressive burdens of taxation and debt upon its people.
Premier Manning said that. If Premier Lesage had said that, some of the French people would say: He wants to break away from confederation. I am sure Premier Maiming

Federal-Provincial Relations does not want to break away from confederation. But I would say this: If we allow these fanatical people-fanatics I say, almost insane in their propaganda-to get away with it in Canada, then the rest of Canada is going to fall to the United States; and I believe there is not one thinking person in Quebec, from the premier downward, who does not believe that whatever the situation has been culturally, economically or constitutionally, the people have had a better deal under confederation in a country called Canada than they would get if this country was taken over by the United States-with the greatest respect to the United States, because I am Canadian first.
It is time we understood what is going on. The premiers of the west are not really saying much that is different from Premier Lesage. It is the interpretations which differ, particularly when they are irresponsible. On page 2 of the brief, Premier Manning said:
The provision of effective incentives to stimulate more active economic growth and the forms such incentives should take and the means by which they can best be provided.
He, too, criticized in some degree-and I am not quarrelling with him-these shared programs, because they push a province into a position where it has to dip into its resources in order to find money to help carry out these projects. On page 40 of his brief Premier Lesage says exactly the same thing.
So these two provincial premiers are not very far apart, and if that is so it seems to me we are not in very much trouble as far as confederation is concerned, because all of us press for benefits for the part of the country we live in, wherever it may be-in Alberta, if we live in Alberta, or Saskatchewan if we live in Saskatchewan, or Quebec if we live in Quebec. That is Canadian; there is nothing wrong with it.
Further on he says this:
Other joint programs have barely been started. This is more particularly the case in Quebec since 1960. Financial equivalence should therefore take into account the cost of these plans, had they been allowed to reach what might be called their "maturity". Briefly, if Quebec does not count on the abolition of conditional grants and on the financial equivalence which would result therefrom to obtain otherwise not expected revenues, there will be no question either of Quebec being satisfied with anything other than its fair share of federal funds.
Premier Manning has said practically the same thing. When the leader of the New Democratic party was premier of Saskatchewan I heard him present his brief on one occasion and, as is proper, he fought for his

province. He should have fought for it; he was the premier of that province. But there is a disturbing factor. It might have been carelessness or it might have been overenthusiasm in the heat of an election campaign, but the Liberal party went out and promised certain programs without consulting the provinces. They said: We will bring them in within 60 days. This was so they could look like great men. Then they brought in this legislation later on in the absence of consultation and, as a result, we did get some sensitivity about confederation. And if Mr. Lesage stood up and said "Just a minute" to the Prime Minister of Canada, he was right. And if Mr. Manning stood up and said "Just a minute" to the Prime Minister of Canada, he was right, too; because we in the Conservative party believe that one must consult the provinces in this regard. Why? Because under confederation, according to the sections of the law which divide jurisdiction between the provinces and the federal government, certain powers go to the provinces and certain powers are retained by the federal government. That is the position according to the constitution. Therefore the Prime Minister and his government should have consulted with the premier of Quebec and with the premiers of the other provinces before they tried to thrust certain programs down people's throats. That is what happened. And when hon. gentlemen over there learn to be less arrogant, to be less overbearing and to have a greater sense of humility, there will be a strengthening of the fabric of confederation because then you will not have the sensitivity which now exists, although it has been blown up out of all proportion.
I move around this land. I talk to French Canadians and to people out in British Columbia. Essentially, every Canadian thinks the same. He wants to keep Canada Canadian and make sure that every Canadian lives with dignity with his family. Every government, irrespective of criticism which has been directed toward it, has tried to implement such a program, with the one exception of the new government which came in last April. The government which was led by Mr. St. Laurent did consult the provinces. But hon. gentlemen opposite failed to do so and this was because they were pledged to take some kind of action within 60 days.
So there is the situation. If there is any trouble with regard to confederation, responsibility lies on the shoulders of those who sit on the treasury benches-and those benches

are vacant, so it does not weigh too heavily. We westerners are not very good diplomats. I think the Minister of Finance will agree with that. But if confederation is to proceed untroubled, there must be tolerance and there must be compromise. I do not mean the kind of wishy-washy compromise which would divide this country. It must be tolerance and compromise based on national responsibility. Any other kind becomes appeasement, and appeasement will destroy, never create. If we read through the pages of history, whether of national or international affairs, we find that wishy-washy appeasement always brings about disunity.
So I repeat, Mr. Chairman, that one thing we should certainly have is tolerance of one another. Certainly we must make compromises at all levels of government, but there must be the kind of tolerance and compromise that is responsible or this country will be destroyed. We have a lot of wishy-washy nonsense talked about expenditures, and how we are going to go it alone. No section of this country can go it alone, because if you look at the budget of this country you will appreciate that we spend $7 billion a year, and the greatest proportion of that expenditure is for defence. We know that today we get into local and parochial arguments and disputes and talk about dividing some parts of this country from the rest.
I tell you, Mr. Chairman, that we face a new situation in this world. We must keep our partnerships in the western world, whether we have the threat of the cold war or not, because there is a new kind of communism that even the old kind of communist fears; and we need all the strength we have in the western world, whether it is the strength of 19 million people in Canada or the strength of all the peoples in NATO and the defence of this continent in NORAD. When we talk about dividing this country we should start thinking about our grandchildren, because our grandchildren's chance of survival in the kind of life our forefathers came here to build will only remain and be perpetuated if we stay together as a nation and internationally.
This political nonsense-I do not want to single anyone out and I would not single out any one party; but I could single out a few individuals-that is spread in this country, the talk about Quebec leaving confederation or any other province leaving confederation, does nothing to help unity; because if they left it would only be on borrowed time and before long there would be some new threat
20220-343i
Federal-Provincial Relations in this world. With 19 million people we are still among the world leaders with the United States, because we lead the way with them. I believe our way of life is superior to that of the United States in regard to jurisprudence and even democracy. This is because we have not the problems they have had to face. We have not had to measure up to the responsibility of world leadership yet; but we should bear that responsibility with the United States to make certain that our world on this side of the iron curtain-and, let us hope, our ideas-will spread to make us safe against communism.
Perhaps some of us will be accused, because we have spoken up like this tonight, of filibustering. It may be said we have delayed the workings of the House of Commons. It might be better for some of us to face a little delay and do a little sound thinking with regard to keeping this country together, because this is most important economically. I now wish to put forward a practical approach to this problem, Mr. Chairman. Today is Monday, July 13. I would ask the press particularly to turn to page 11 of our Orders of the Day, where they will see what has been accomplished in this parliament since May 13. Compare this with any other parliament and you will realize we are doing a little better than we did in previous parliaments. This is most important. We have done very well this session. I say this with the greatest respect, but it may be just a coincidence that the Prime Minister has been out of the House of Commons and has been in London for the last few days. But whatever the reason, we have done a little better and the word is proceeding. Thirty eight items have been passed, and this is a little better than average. As far as I am concerned, as one who observes parliament from day to day, this parliament is going along normally. The sole reason for my raising this question is that I have been accused in the past when I have risen in my place-as have many other hon. members when making speeches-of holding up the business of the house. Let the government put the business on the order paper, and it will be done.


Robert Norman Thompson: Mr. Chairman, the hon. member for Bow River does a lot of talking in this house. Sometimes what he says makes some sense. I must compliment him tonight on the fact that most of his remarks make quite a lot of sense. 'But some of them do not make so much sense sometimes. A short while ago he tried to point out that the municipal

Federal-Provincial Relations debt of Alberta was as high as or higher than that of most provinces in Canada. What he did not say was that more than $400 million of this debt is owed to the provincial government. Any time the provincial government wanted to do so, it could wipe out that debt and no one would have been the loser. It does not do so because it uses this money on a revolving fund basis to help the development of municipal capital projects.


Eldon Mattison Woolliams: Mr. Chairman, I wonder if the hon. member would allow a question?


Robert Norman Thompson: I did not ask the hon. member any questions when he was speaking, Mr. Chairman, so I would prefer that he wait until I have finished.


Eldon Mattison Woolliams: I have just one question.


Robert Norman Thompson: You may ask me a question when I am through speaking. He does not really like to hear these comments, Mr. Chairman, but this is the basis upon which Alberta has developed its resources and municipal finance, so that today there are more towns and villages complete with sewage systems and water development, and more miles of paved roads simply because they have used their own resource capital for the development of their municipal and city areas. But this is not the question to argue about tonight, because even provinces such as Alberta or British Columbia, which have been able to balance their books and run things in rather an efficient way down through the last number of years, today face problems which even their administrations are going to find very difficult to overcome.
The reason is simply this. Under the policies of the federal government we are faced at the present time with a situation where the sum total of government expenditure, provincial and federal, tends to be much more than the sum total of government income. Last year-as I mentioned the other night- the federal and provincial governments of Canada spent well over $1 billion more than they took in. The situation is going to be worse this year, simply because under the limitations of the present system there is no other alternative; and unless something is done to change this situation we are really going to be in financial difficulties. It all comes back to the question of the provincial fiscal arrangements that are in existence at the present time. I would suggest to the Minister of Finance that it does not really matter so much how these provincial fiscal arrangements are juggled; it is the taxpayer who

pays the tax dollar and it is he who is carrying this ever spiralling burden of tax load that is heaped upon his back.
Therefore I would suggest to the committee that unless we face up to this issue and get at the fundamental cause of the situation, merely doctoring it up as we are doing is not going to change anything or help the situation at all. After all, it is the taxpayer who pays the tax dollar. While we may talk in this house a great deal about how we are going to adjust the expenditure of the money that is collected from taxes or borrowed in the taxpayers' name, how we are going to change our basis of sharing this tax income does not matter because under our present system with regard to debt, it is bound to increase and the tax load will go up with it.
As I mentioned the other night, 15 per cent of all our federal income goes just in paying the service cost of our federal debt. Likewise there are similar difficulties in most of the provinces. Even more difficult than provincial or federal financing is the question of municipal financing. There are literally scores of municipal governments in this country today which have borrowed up to the hilt and cannot borrow any more. This is because the debt burden they carry is more than their normal tax load can manage. So I am absolutely convinced it is essential that in dealing with this subject we must face this thing at its very roots.
One of the ways in which our provincial and municipal governments could be helped so much more than they can be helped by juggling our provincial fiscal arrangements is to make available that capital which is necessary for capital development, and to make it available on an entirely different basis than what we are doing at the present time. We have talked a good deal about social capital, the term accepted today across the country to describe the money necessary for the development of our social capital needs. Rather than operate on a deficit basis as we are at the present time there is no reason at all why such social capital cannot be made available through the Bank of Canada, under a separate arm of the Bank of Canada such as is the industrial development bank. On such a basis we could really provide the assistance to the provinces which the provinces need so urgently, and will be able to help them a little out of the crisis they face because of the problems which are part of the federal-provincial fiscal arrangements about which we are talking tonight.

The other day in speaking to this resolution I referred to the remarks the minister had made when he presented the resolution to the house. The minister expressed concern about the continuing increase in deficits, and said there is a limit beyond which the federal government cannot go. To me this brought to mind a statement made previous to these remarks, in which he said that during this coming fiscal year he expected there would be a deficit of $455 million according to the traditional method of accounting. At that time I asked him a series of questions, and I referred to his reference to traditional methods of accounting. If we could have the answers to the questions which I posed to him, I believe we would have answers which would show that it is possible to provide social capital needed in this country without the tremendous debt load it carries today. I want to put these questions back on the record, and I do so because this afternoon-


Mr. Horner (Acadia):: Would the hon. member permit a question?


Lucien Lamoureux: Order. The hon. member for Red Deer has the floor and apparently does not wish to answer any questions.


Robert Norman Thompson: I mention them at this time because this afternoon the minister stated he did not think it was necessary to answer these questions at this time because they did not relate to the resolution before us. I disagree with him about this because these questions take their root in the very fiscal arrangements which we are discussing, fiscal arrangements which are so important to the provinces and which I do not think are being handled properly at the present time.
My first question is: To what extent has the Bank of Canada purchased government bonds? That is a simple question, very easy to answer, and it will take the right person only a few minutes to find the statistics to answer it. Second: What is the average length of time that these bonds are likely to be held before they are sold? Is there anything difficult about that question, Mr. Chairman? It is really very simple. The third question is: How many of these bonds are likely to be held until they mature? That can be very simply answered too if the minister has the available statistics to which I am referring. How much money is actually paid to the Bank of Canada in interest on these bonds which the Bank of Canada holds? I have reason to think there is a good deal of money going back into the consolidated revenue
Federal-Provincial Relations fund as the result of the interest paid on these bonds. My point is that if this can be done as far as our present financing is concerned, why cannot it be done to assist the provinces and the municipalities as well?
Another question I asked the other night was: What portion of these charges, this accrual of interest charges on government bonds, is returned to the consolidated revenue fund? I believe the minister owes it to the committee to answer these questions, because in the answers to these questions he the solutions to some of the problems the provinces are facing. I would ask, Mr. Chairman, that the minister give the answers to these questions while we are still debating this resolution, or on the bill which follows.


Eugène (Gene) Rhéaume: Mr. Chairman, I only want to take a few minutes of the time of the committee to comment on the minister's opening statement about the tremendous degree of amity which has been Canada's experience over the last year, ever since the Liberals came to power, in terms of federal-provincial relations. I cannot let his statement that there has been nothing but love go by unchallenged. Tonight I want to discuss this subject for a few minutes because in fact there has been absolutely no consultation, ever since the Liberal government came to power, between the federal government and the governments of the Yukon and Northwest Territories.
I realize, Mr. Chairman, that my hon. friend and colleague from the Yukon covered most of this in his remarks earlier today and I will not repeat what he said. Surely it will suffice to point out to the committee that I think there has been little respect shown for consultation and little indication of concern on the part of the minister or his colleagues for the people in the north. In fact, the Liberal government have been so concerned that they have allowed the government of the Northwest Territories to lapse and go out of being completely, so that for a period of four and a half months last winter, from December to March at any rate, we never had even a legislative council in the Northwest Territories. That is the extent to which this government is concerned about democracy in some 50 per cent of Canada.
Perhaps I may be permitted to point to another example. Ever since the twenty sixth parliament the hon. member for Yukon speaking for the Yukon, and I representing the Northwest Territories, have been asking the federal government to allow the governments

Federal-Provincial Relations Of the Yukon and the Northwest Territories to sit in on federal-provincial conferences. It may come as a surprise to the members of this committee, indeed to the public at large, to learn that the territorial governments of the Yukon and the Northwest Territories are not allowed to sit in on these federal-provincial conferences, not even as observers. When I look up the index for the first session of the twenty sixth parliament I find that on five different occasions I pleaded with the federal government to allow us representation at these conferences, and every time I was turned down. I find that the hon. member for Yukon made the same request six times. On looking at what has gone on since the second session commenced I find that the hon. member for Yukon and I have each on six different occasions begged this government to allow the Yukon and Northwest Territories to send an observer to these meetings, to this tremendous consultation which is going on, and we were refused every time.
Twenty four times in the last 15 months we have asked the government, "Would you give those of us who live in the north a chance to have a representative sit in at your meetings?", and the answer we have received is that we are to be represented at the federal-provincial conferences by the Minister of Northern Affairs and National Resources who is going to negotiate for us in a hard-headed bargaining type of way. What kind of nonsense is this? To what extent is the minister going to get up on his hind legs and defend the interests of the north?
When the Minister of Citizenship and Immigration and the Minister of Justice got up and said to the minister of northern affairs, "We are going to sell the Eskimos, in order to make a little deal over here with the province of Quebec" to what extent did the Minister of Northern Affairs and National Resources stand up and say, "You shall not make a deal to sell these people." If it had not been for the official opposition the deal would have been made.


Cyril Lloyd Francis: Relating to the remarks which the hon. member has made, has he discussed this subject with the hon. member for Pontiac-Temiscamingue today?


Eugène (Gene) Rhéaume: Mr. Chairman, if I am allowed to have the floor now, I will continue. When the Minister of Finance said that everything was tremendously smooth I was interested in what he said as recorded at page 5,181 of Hansard for July 7 last:

I had to have some sort of introduction.
That is how he explained what he had been saying. So far as the Yukon and the Northwest Territories are concerned there has been no consultation since the government took office. The minister's statement is completely misleading in its application to what the truth is in the north, and I have no reason to accuse the minister of telling the truth in southern Canada either. As a northerner it seems to me that we are not to be allowed consultation in federal-provincial matters.
Do the federal ministers really understand the needs of the country? If we are not allowed to have our own people at these conferences we want to know to what extent the ministry knows about northern matters. I shall give two examples, and one is the fascinating statement made by the Minister of Agriculture as recorded at page 5239 of Hansard for July 9, when he was asked to what extent the government was going to implement its program of free milk for children in Canadian schools. The minister was fresh from a breakfast he had just thrown for some 3,000 people in Calgary where they cooked up 350 dozen eggs and this minister, with his hands spread across the fullness of his being, said that most Canadian children are so full of milk that they cannot possibly hold any more.
Let me read to the minister and his colleagues a little bit of what in fact is the truth of the situation among some thousands of children in the Canadian north, and I may say this is not just in the Yukon and the Northwest Territories. I am quoting from page 224 of the Hall commission report-and I suggest to the fulsome Minister of Agriculture that he should read it before making these kinds of statements.
"Inhuman"-is the way a public health nurse described, in the course of a conversation, the living conditions of the Eskimos in her community. An apt description indeed. To realize this one has to shed the romantic ideas of Eskimo life, derived from children's books and movies, and walk through a settlement of Eskimo tents on a cold September night with the wind and rain lashing against the flimsy tents, babies crying and whimpering, and children and adults alike coughing inside. Outside is the stench of human and dog excretion and of rotten food scraps. The tent houses not only the family but all their belongings and implements-
Substantial beginnings have been made against the odds of northern logistics in the provision of health services, housing and some means of sanitation. Nevertheless, hundreds of families still live under conditions that would not be tolerated elsewhere even in a more moderate climate.

The members of the commission were so staggered by conditions that they made a recommendation saying:
While it is beyond our terms of reference to make recommendations in these related fields, we suggest that considerations of humanity and economics make it imperative for governments to to take comprehensive and practical actions in these related fields because without them the serious health problems facing Canadians everywhere but particularly in the north cannot be adequately and effectively resolved.
I am using this merely as an example, but I suggest to the Minister of Agriculture that he go back into the next meeting of this multimillionaire cabinet that characterizes the government and tell his colleagues what is going on and ask them to reinstate this program for free milk for school children in the Canadian north, many of whom do without milk from the time they are weaned. If he has any doubt about what I say is true I defy him to go to the Minister of Transport and ask him if it is true that the children in Newfoundland are so stuffed with milk that they cannot possibly stand any more nutrition.
I shall give another example of the kind of thought and ignorance that characterizes the government in terms of northern needs. Today I asked the Acting Prime Minister if the government would consider giving everyone in the Northwest Territories the right to vote. I asked this because the Prime Minister is over in London telling the people of the world that the commonwealth must give leadership in seeing to it that people of all colours, creeds and levels have an equal chance of citizenship. The Acting Prime Minister got up and said he did not understand; that there was no logical connection between these two statements.
Surely the government is aware that there are 10,000 Canadian citizens in the north, mostly Eskimos, who are not allowed to vote for their councillors who make their laws on education, on health, on furs, trapping and liquor. Surely he must have answered facetiously. I have a couple of quotations here that I simply will not deny to the committee, relating to the visit of the Prime Minister of Frobisher Bay. He was on his way from the breakfast party for the 3,000 people in Calgary, this great breakfast orgy the Minister of Agriculture had. It was not like the Roman orgies; it could only be compared to the orgies the barbarians had after they sacked Rome. This is a press report from the Edmonton Journal of July 7 last:
Federal-Provincial Relations
The Pearsons were surrounded by flag-waving children who giggled delightedly whenever Mr. Pearson gave them a friendly pat on the head. Eskimo women, with babies packed on their backs, puffed on cigarettes, smiling proudly with each prime ministerial greeting.
"I am very happy to be with you tonight," Mr. Pearson said. "We are all Canadians-the only difference is that you were here before we were."
If the Prime Minister wanted to tell the truth to those Eskimo people he could have told them about a few other differences. For example, he could have told them, "You are not allowed to vote for your own territorial legislators who make your laws on fur, game, liquor and education.'' He did not say to the Eskimos, "Your men have a life expectancy of 26 years and your women of 21J years, while ours in the south is 60 years." He did not say to them, "Your infant mortality rate, my fine Eskimo friends, is four times as high as that in the south, and 40 per cent of your grandchildren will never live to celebrate their first birthday." He did not tell them, "Death from infectious diseases among you is ten times as high as among us in the south and you will have ten times more deaths from tuberculosis." He did not tell them, "Ninety per cent of your men are unemployed,"-at a time when the Minister of Labour is saying that unemployment is now a seasonal thing in Canada. He did not say to them, although it amazed me, that they are so stuffed with milk they need nothing from now on but three maple leaves to be happy.
A new book has just come out, and before the Prime Minister or any of his multimillionaire cabinet visit Frobisher Bay again I suggest they read it. It is a book entitled "Eskimo Administration, Canada", and it is written by Dr. Diamond Jenness, a world renowned authority. It has just been published, and because the statistics I have already given on infant mortality are taken from this book I will do nothing more than read parts of the index: chapter 1, "Government Myopia", chapter 2, "Wards of the Police", chapter 3, "A Shackled Administration", chapter 4, "A Shackled Administration (continued)", chapter 5, "Bureaucracy in Inaction", chapter 10, "Steering Without a Compass". And so on. It is sickening. Yet the Minister of Agriculture, fresh from a breakfast of 350 dozen scrambled eggs, says that Canadian children are so full of milk we cannot get any more into them. Shame.

Federal-Provincial Relations


Lawrence E. Watson: Can the hon. member tell me when Diamond Jenness gathered the facts that are in this book?


Eugène (Gene) Rhéaume: The figures I gave on infant mortality, disease and so on are for 1963. In any event, before the Prime Minister decides to visit these benighted people of his and pat them on the head I suggest he find out what is going on in the country and that he and his cabinet be careful before they go around saying that everyone is so well fed.


Yvon Dupuis: It is 1962-63.


Eugène (Gene) Rhéaume: The figures are 1963.


An hon. Member:: Were they any different in 1962?


Eugène (Gene) Rhéaume: Here we go, Mr. Chairman, with that great Grit argument that says that since things were not done before, they need do nothing more. I have said in the house before that the great belief of Liberalism is that you do nothing except take office and that by some strange osmosis, by some mysterious alchemy, everybody in Canada is better off. The Minister of Agriculture stands there and says: Why, we are drinking sillabub in Calgary, and everywhere else everybody is full of milk. I do not know what the minister is full of, but Canadians in my part of the country are not full of milk.
With respect to the whole matter of federal-provincial relations it is frightening to me when I see nothing being done in the Canadian north. In the last 15 months federal spending has in fact dried up. When I think of the projects which are now in the process of offering hope to the people, I realize that not a single one of them has been started in the last 15 months. They are all merely carryovers. I do not mean they are not good. The Great Slave lake railway will penetrate the Northwest Territories. For the first time on August 10 steel will have crossed the 60th parallel. Every Liberal in the House of Commons voted against the Great Slave lake railway when the bill was before the house. Telecommunications are in fact being extended down to the Arctic ocean, but this is not a new program; it was started three years ago. The same is true of school construction.
What is frightening to me as a northener is that the tremendous effort put forward in the five years of Conservative administration was merely a beginning. When the hon.


member for Chateauguay-Huntingdon-La-prairie asks whether these terrible conditions among the Eskimos existed in 1962, the truthful answer is yes, they did. Certainly they did. But the fact of the matter is that in 1962 some 60 per cent of the Eskimo children at least had access to schools compared with less than 15 per cent in 1957.
I am one who has never tried to suggest in the house since being elected that all the answers were provided by the Conservatives, but the groundwork of schools, nursing stations, hospitals, communications, airports and roads was laid. A good start had been made, against tremendous opposition by the members of the opposition of that day, the Liberal party of Canada. They said it was a nightmare. I am not going to repeat all the things they said. Let it be clearly understood that the facilities that were then being provided were nothing more than the groundwork. At no time did the previous administration ever say that everything was solved and that there was nothing but harmony, sweetness and light in the Canadian north.
The previous administration said many times-I used this at the time I was campaigning; it was true then and is still true- that the maddeningly slow job of counteracting the terrible human problems had begun. What frightens me and what I lay at the doorstep of the present administration is that they have cancelled this program, and I suggest that the things they have done are not worthy of respect.
One or two programs that perhaps did have a bit of imagination when applied in the south are completely stupid when viewed in a northern context. I think of the winter house construction program. I would love to read the Minister of Labour some of the letters I have received from northerners who are trying to qualify for the $500 bonus under a program that contained no special provision for transportation problems long after the rivers are frozen up and you cannot ship stuff in there. The program made no provision for climatic conditions. One of my constituents said to me: I am sure the Minister of Labour does not know whether he is talking about Hay River in the Northwest Territories or Florida.
I think of how the Minister of Labour said in the house that the government was going to lessen the number of months in which municipalities can qualify for the municipal winter works program. He said that winter in this country only extended

from late November to early March. I do not know when winter ends in Inverness-Rich-mond or wherever he comes from but I can tell the house that I was at Cambridge Bay and Coppermine in the Northwest Territories about 10 days ago and the water is still frozen, with the result that the ships will not get in for a while yet.
Ever since the government took office there has been a complete absence of any reference to the Northwest Territories and the Yukon. Just a few weeks ago the hon. member for Yukon proposed a resolution that would have done something in terms of tax relief for the north. The hon. member for St. Lawrence-St. George, who is a bit of a northern expert by virtue of having made two trips in a DC-3, talked out the resolution. He said: No, this is not a good thing for northerners; if there is anything that would harm them it would be an income tax reduction. His remarks were fascinating and not only in terms of their strange logic because it is usually that embryo leader of the Liberal party in Ontario, the hon. member for Renfrew South, who does these things. But here we had the parliamentary secretary to the Minister of Northern Affairs and National Resources saying: No, no, from my vast and profound experience of the Canadian north the people do not need a tax reduction. It is a bit like the Minister of Agriculture saying that children do not need milk.


An hon. Member:: How many trips did he make?


Eugène (Gene) Rhéaume: He made two trips. Having made these remarks I am going to close with a plea to the government. I want them to be a bit like the Secretary of State for External Affairs when he said: Well, if I said that I was obviously wrong. I want them to admit their mistakes. I want them to resolve that in the interests of the poor, ragged and tattered people who frequent Canada's north they will depart from this policy of helping only those areas where the most federal seats are.
The charge has been made that the Liberal party has never really cared about equal opportunities for Canadians, that they only worry about those places where they can get the most federal seats. There are people who believe this is one reason why the change was so obvious under the previous administration, in that for the first time in Canada the maritimes, the west and the north received a fair share of the federal treasury. If this charge is not true, and I 20220-344
Federal-Provincial Relations for one would like some evidence from the present cabinet that it is not true, then maybe some day in the future some prime minister of Canada can alight from an airplane at Frobisher Bay on Baffin island and honestly say to the people there, "We are all Canadians; the only difference between you and me is that you were here first."


Maurice John Moreau: Would the hon. member permit a question?


Eugène (Gene) Rhéaume: Certainly.


Maurice John Moreau: In view of his statement that the Liberal party do not believe in equalization of opportunity, I wonder how the hon. member justifies his party's position on family allowances which, I am sure he would agree with me, is one of the greatest equalization factors for the Eskimos in the north?


Eugène (Gene) Rhéaume: It is difficult to answer this question in a few moments. I do not happen to be an expert on what went on in this house in 1944, as my hon. friend from York-Scar-borough is. However, I do know this-the hon. member for Winnipeg North says the hon. member doesn't know even what is going on now. I do not believe that is quite true. I do know this, I will stand behind the record of the leader of the official opposition in so far as social justice in this country is concerned, if the hon. member for York-Scarborough will do the same.


Bert Raymond Leboe: I have no intention of making extensive remarks tonight. However there are one or two things I should like to mention. There was a reference made this afternoon to succession duty taxes in British Columbia and to people moving out to British Columbia, thus enabling that province to benefit from the succession duties. I should like to remind the committee there is something else that takes place that is very important. As a result of climatic conditions, a good many people go to British Columbia looking for work and they become a charge on the municipalities and the province of British Columbia. When you are out of money and you have to go on welfare you might just as well live in a warm climate, so people go to British Columbia and bask in the beautiful climate.


An hon. Member:: From the Yukon?


Bert Raymond Leboe: I do not know whether or not they come down from the Yukon. Those people are generally wealthy, I believe, and that is the reason they are up there.

Federal-Provincial Relations
Now, the minister did say something about understanding in Canada. When he replies, I should like him to enlarge upon the statement he made that there were people in Canada who were making understanding between the various sections of Canada more difficult. I should like to know what the minister had in mind when he said that there were these people. If the charge is left as it is, it is a little difficult to know whether he is talking about one part of Canada, two parts, or six parts. I should like to have him deal with that.
Reference was made this afternoon, also, to the Alaska highway. I think this, along with the trans-Canada highway, is something that does enter into the fiscal arrangements between the province and the federal government. There is no secret where I stand on the subject of the Alaska highway. I believe that we should get along with the paving of those sections which fall in the alignment and which do not require a great deal of reconstruction before paving. British Columbia has offered to pay one half of the paving cost to the northern boundary of British Columbia. I believe the federal government should move immediately in this direction. I am sure the minister of northern affairs and the Minister of Public Works agree with me, but unfortunately they have deputy ministers who are perhaps a little more difficult to deal with than the ministers.
If this extra paving is undertaken throughout the whole length of the highway which falls within Canada, then the work should be done by Canadians under Canadian contracts. If this were done we would avoid the serious situations which evolve when you have United States contracts and Canadian contracts and the United States contractor may be paying $3.50 for a catskinner while the Canadian contractor may only pay $2.55. We would avoid this situation and we would also be able to collect from the United States after negotiations had been completed. We are not giving away all our trump cards because sooner or later the United States will want a railway to Alaska. When they do, if they have not settled the Alaskan highway question properly, then they are going to be in difficulty with their railway to Alaska.
I should like also to mention a situation in connection with the returns to the provinces from natural resources. I have not heard the minister answer this question as yet, and I have been here most of the time. Has consideration been given to the value of


the returns to the provinces for the natural resources that have been alienated? I recall an article some years ago in the Toronto Telegram which pointed out that out of an equal number of units, shall we say, of the alienation of natural resources the province of Ontario had $4 million returned to the people whereas a like amount gave the province of Alberta $112 million. I am wondering whether or not this return to the people of the provinces from their natural resources is taken into account when the figure is used as a basis for taxation purposes under this new scheme.
The minister also mentioned that there were circumstances surrounding the provincial situation now that were not contemplated. I gathered from that he was referring to the fact that Ontario is not left alone as the basis, as it were, but several provinces are brought into the picture. I take it from his statement that is the accepted thing. If you are going to develop a province, you will have to create in that province an industrial climate, and this is exactly what has been done in the province of British Columbia to the extension of railway, and hydro facilities. Any province that will go into the business of earnestly developing power and transportation facilities is bound to get more development for that province.
The hon. member for the Yukon and the member for the Northwest Territories mentioned the development of their areas. I think they have a good point. Rather than try to penalize provinces that are developing their natural resources, why not pour a little money into the northern areas to help develop those areas? I think these hon. members have a good point which should be followed up vigorously. If the federal government did that, then perhaps in the future they could gather more taxation from that area. It might be a fertile area and well worth spending some very large sums of money.
We have been talking about the difficulties that we have in the provinces and municipalities. We know that today expenditures amounting to millions and millions of dollars are being wasted for national defence. I should like to pose this question for the Minister of Finance. Would he be able to tell us, if suddenly we were confronted with a situation in which this defence expenditure were put into the production of consumer goods, where the money would come from to buy those consumer goods which would be turned out instead of armaments? I think there is a dilemma facing the minister here

which he would hate to contemplate. It has been said over and over again-and it is a difficult thing to say-but sometimes we wonder whether we can afford peace under our present financial structure. There is some sense attached to this. I can recall the period during the war when we in Canada were faced with great inflationary pressures because of the fact that huge sums of money had been pumped into the war effort. So we devised a scheme of victory bonds, war savings certificates, war savings stamps and compulsory savings so as to take money out of circulation and hide it away against the time when it could be filtered back into the economy after the war had ended. We know today that the Liberal government was able to balance its budget for nine years with money which was flowing back as a result of returns from savings certificates, war savings stamps, compulsory savings and so on.
When the situation is in reverse, as it is today in many parts of the country, should we not have the same financial process making sure that the purchasing power is in the hands of the people so as to buy back the things which they themselves produce by using the methods which were used during the war to prevent inflation, only in reverse? Should not the converse be brought into being so that we could put money into circulation at municipal level so as to establish a greater increase in the amount of goods and services which are taken home and actually used?
There was a program on television last night dealing with what they call cybernetics- automation and technological advances. Something which Mr. Aberhart said 30 years ago was said on that program last night as if it were a new idea. That is, the day is coming when people are going to receive cash money in their hands which they have never earned, but which is rightfully theirs because of the ability of society to produce goods and services in a modern machine age. This was put across on television as though it were a new concept. But if you look back into the record of history you will find that Mr. Aberhart pointed this out 30 years ago.
I say to the minister that if we were suddenly to find ourselves without any need for national defence capital spending, he would certainly have to revolutionize his present ideas. One alternative would be for him to answer the questions which were placed on the record today, for the second time, by my leader the hon. member for Red 20220-344i
Federal-Provincial Relations Deer. If he would answer those questions, perhaps he would have some idea how to extract himself from such a dilemma as I have just mentioned.


Mr. Willoughby:: It is certainly not necessary for me to tell this committee that I am not a financial expert, and I am certainly no economist. But I am one of the representatives from the province of British Columbia and I am disturbed about some features of this resolution. I hope the Minister of Finance will make them a little more clear to us when he has the opportunity to do so. It seems to me the hon. gentleman has perhaps taken too literally the fact that British Columbia is supposed to be debt free. It looks as though British Columbia is in serious danger of coming out on the short end of this deal.
I am sure every one of us in this committee agrees that adjustment, or abatement, as long as it will create harmony in Canada and assist parts of Canada which up to the present have been less happy economically than some of the other provinces, is to be supported. On the other hand I think they would also agree that to create harmony in one part of Canada while at the same time creating disharmony elsewhere is not an answer to our national problem. I do not intend to go into detail on the subject of this resolution because I do not consider myself qualified to do so, but I do wish to bring up certain points for the minister's consideration in the hope that he will throw some light on them when he has the opportunity to reply.
The resolution before us changes the basis upon which equalization is to be paid from the national average to the average of the two top provinces. This being so, British Columbia and Ontario are caught in the squeeze again because they are the two top provinces and, obviously, the rest of Canada will benefit out of general revenue in some way so as to make up the difference. The raising of the succession duty rebate to 75 per cent will not make any difference to the province of British Columbia because we have been among the fortunate ones, to that extent, in the past.
What I am worried about is this: 50 per cent of the natural resource revenue of the province is to be deducted from any sums to be abated to the province. It is obvious from the table which the minister gave us last Tuesday evening that under this formula British Columbia will receive only a very small amount of the increased revenue which
5422	HOUSE OF
Federal-Provincial Relations is to be distributed among the provinces. This to me seems unfair. I should like to ask if it is right that we should have to contribute toward the expenditures of this country under this abatement plan the amount of money which is received from expendable resources. We know that some of this resource income is derived from sources which are not permanent-they are bound to be a declining asset. I think the majority of us from British Columbia realize that the assets which are to be taxed under this new scheme will include our forests, our gas, our oil and perhaps some of our mining resources. These are expendable resources. They are provincial assets and I cannot see how we can possibly allow them to be taxed on such a basis as is now proposed. I hope the minister will make sure that these resources are at least maintained, so that we shall not be overpaying our share of taxation. I should also like to ask, particularly with regard to forestry, whether we are to be taxed on the gross profits of our forest resources or whether we are to be allowed to deduct the cost of maintaining such necessary services as protection against fire, reforestation and so on. I hope these matters will all be clarified when the minister brings in the bill. I hope he will tell us just what he means by natural resources in relation to forestry products.
There is one other question. Where does hydro power enter into this picture? Is that a natural resource? Does the minister contemplate that the sale of Columbia power to the United States means we have a resource which is taxable? These are things I want to know about; they are things the people of British Columbia are entitled to know about. I have no intention of speaking any longer, Mr. Chairman, except to say that I put these questions before the minister in the hope that he will give us a further explanation on the bill upon which this resolution is based, in order that we may have a better understanding of what we are faced with in British Columbia.


Mr. Nugent:: Mr. Chairman, I thought the hon. member for Northwest Territories touched on one aspect of the problem that must always concern members of this house; that is, the question of the division of the taxation dollar available in Canada. I do not say this just because that territory does not have the same kind or form of government as the provinces; but it is a fact that this territory is a very vast land which is sparsely


populated. It is new frontier. We know something of some of the wealth it contains, but we have very little conception yet of just how valuable those resources may be to the whole of Canada once they are tapped.
I think these are questions that have occurred to most of us when we have been considering the question of comparative wealth and the opportunities of each of the provincial governments when considering their own natural resources, their own markets, populations, etc. Certainly the first thought that occurs to my mind is that if there is a responsibility to develop an area of Canada so that its natural wealth may become available to our children and grandchildren, if we look forward to the day when those resources may be absolutely essential to Canada's needs at a future date, there must be a government that has the financial resources and is able, because of its constitutional power, to give leadership and make provision so that we can develop that part of the country.
Mr. Chairman, you will note that I referred not only to financial resources but to constitutional power. I think this is a question that has not bothered members of this house enough when we have been dealing with taxation possibilities in this country. Anyone who has looked over Canadian development during the last few years, certainly since the war; anyone who has been aware of the challenge to this nation to meet changing world conditions; anyone who has considered our position tradewise and industrywise, our trade patterns, and has considered tax concessions and trade agreements, must realize that the good of the whole country still depends upon the power and strength of the federal government.
I would like to illustrate this one point in my argument with reference to our trading program. I would like to remind members that the problem presented to Canada a few years ago, when we came out of the war, was that we were a country rich in natural resources; that we had developed only those resources primarily that supplied raw materials; that automation had displaced people from jobs in these industries, and we found that if we wanted our people to be gainfully employed, only in the manufacturing of our own raw materials could we provide that kind of employment. We therefore had to develop our secondary industries; we had to find the money for them; we had to find the trained personnel, and Canadians after

the war were not well trained; they were not even well educated. We sometimes forget that in a land as rich as Canada, where for so many years there was so much opportunity for a man of ingenuity, strength and desire to carve himself out a very comfortable living, there was not the accent on the need for formal education to enable a person to make his way in this country. Canadians were, classically speaking quite an ignorant people at the end of the last war. We found our general standard of education to be very low. The European cities who were starting to build their new factories with the latest automation devices concentrated on manufacturing industries and had large pools of skilled labour to draw from; and we found we had none.
I suggest that anyone who looks at the crash program we undertook to provide money for vocational schools, to provide scholarships and bursaries, and the incentives we insisted upon so those schools could be built in order that Canadians could start to be educated and take the jobs we were beginning to provide in our new industries, cannot say that education is simply a provincial affair. I know I am treading on very dangerous ground when I suggest that the federal government has any responsibility or should have any say in this field; but I think I have illustrated the point, and our history illustrates the point, that whereas education was a provincial responsibility, it had become a federal responsibility to try and match the economy of this country with the demands of modem civilization. The provincial authorities, not having the responsibilities in this regard, had not looked far enough ahead and had therefore failed to meet the educational requirements of the changing situation.
I presume that those who preach the sanctity of provincial rights are going to say, "What should have been done was turn this money over to the provinces so they could have built these schools". But it was not just a case of turning the money over to the provinces; it had to be a case of achieving the desired objective of Canada as a whole. If we had given each provincial government a certain amount of money and had said, "Spend it on education", they would have said it was within their right to spend it as they saw fit and we would not have had nearly the effective results that were needed in this regard.
It is this aspect of the national problem of the sharing of the tax dollar that I think has not received enough consideration in this
Federal-Provincial Relations house. Today there are too many responsibilities that must be tackled on a national scale. The hon. member for Northwest Territories pointed out how the people in his area are neglected and what their standard of living is like. He drew attention to some of the difficulties they have to put up with. And they are all Canadians. I think those of us in this house would agree that if they are able and willing to work as hard and apply themselves as industriously as the rest of us in other parts of the country, there is nothing unfair in suggesting that they should be entitled to a fair standard of living. I suggest that in many of our negotiations with the provinces this question has bothered the provincial governments very little, if at all. As the hon. member for Bow River pointed out, certainly it is the job of each provincial premier to try to get the most for his province; and I can certainly understand the adversary system whereby you have everything best said by a person appearing on one side, and then the best said on the other side. The premiers come and defend their needs and the federal government must defend the needs of the federal government.
I suggest to hon. members that no matter what constituencies we represent we are all elected as members of parliament for Canada, and we cannot get too parochial in our views. I suggest we must be Canadians first and members of a province next. I am afraid we must look at some of the financial responsibilities under the British North America Act, and instead of saying that our only problem is to redistribute the tax dollar so as to allow the provinces to carry out those responsibilities which they are stuck with and which grow on them each day, we should perhaps take a close look at the powers which the provinces have and at the powers the federal government have and see whether more of the provincial responsibilities cannot be shared by the federal government. I am not suggesting that these powers necessarily have to be transferred, but I do think that if those problems which are important to all Canada are to be tackled in such a way as to give any sort of equality to the people in Canada, despite differences in the natural resources of the different provinces, there must be more uniformity in those projects which are so important to the trade and industry of each province.
I find it a little distressing to find signs of interprovincial strife in attracting industry. Certainly it sounds well and good for each

Federal-Provincial Relations province to do what it can to attract industry to its area, but we wonder how far we can go in making concessions to certain firms because they are located in a given province before we are penalizing other firms because they are not so located, and I mean other Canadian firms. I wonder how far we can go in this direction before it can honestly be said that interprovincially, so to speak, we are erecting trade barriers between provinces.
I suggest that wherever new industries or depressed areas come to the attention of the provincial governments, if we are going to put more financial power into the hands of the provinces, part of which money being used to develop their own resources, it may be necessary to force the provinces to co-operate a little better across the country so that there is more uniformity in the manner in which concessions to industry are made.
The hon. member for Bow River mentioned the taxing powers of some former governments. We have certainly heard mention of some of the efforts made by the previous government to equalize the tax benefits throughout the country. The province of Newfoundland is not very rich. The Northwest Territories has tremendous problems. The province of Prince Edward Island is very small, and probably overburdened because it has to bear a provincial government for such a small population. If all provinces are to be treated alike there cannot be equality of opportunity; there cannot be what I call a fair Canadian share of the wealth of this country, by any stretch of the imagination. I think that when we are considering taxation and concessions to one province or another, as soon as we start making an exception of one province and as soon as we bring in a federal plan which allows one province to opt out, we are opening the door to fragmentation. I think the pension plan as it was first envisaged was a particularly pointed example of that sort of thing. Any scheme which is to be so far reaching that it might in a few years build up such tremendous sums of money and which would be so important to so many people when it could not be called all-Canadian, which might in fact be competing with a scheme put forward by another province, to me presents one of the most ridiculous situations this country has had to face-one which 1 suspect the members of this house, from what I have heard so far, have not begun to dream of or are not very willing to look at. I suggest that this impact on the nature of

the government, on the nature of democracy in Canada and on the nature of our federal-provincial relationship has not been seriously enough considered.
I think I have mentioned before in this house, and it will bear repeating, that once the provinces get their hands on the pension funds which will be built up, once each provincial government has the ability to put its hand on a large sum of money which it can direct toward aiding its own industry in its own way, when we consider that that has in some instances already taken the form of competition with other parts of the country, and when we realize that provinces always try to attract industry, I suggest that the ownership of that amount of money and the amount of influence it would have is bound to have a very far reaching effect on the type of government you will get in each of the provinces.
Carried not to its logical conclusion but just carried a step or two further, it is not hard to envisage provincial governments changing their policy or being kept in power because of the manner in which they have been able to use their money to attract more industry into the province. One of the ways to do this, of course, is by way of tax concessions within the provinces; tax concessions at the municipal level, making available special loan funds at special rates of interest, and so on. I suggest that once any of these devices fail to prove effective enough there is another simple step which can be taken if the province has the money. There is always money available for a provincial government to lend to some of its friends, or to set up business in competition with businessmen who will not co-operate. I fail to see how we can prevent such a natural course of affairs being carried on if we continue to regard taxation problems as though they were created for one province and by making special deals with another province. Every time there is a suggestion similar to that contained in this resolution, the question must be looked at on a dominion-wide basis. If one province for any reason is unwilling or unable to go along, if it feels this is an undue interference by the federal government in provincial affairs, then I suggest the alternative is not to surrender to the province and merely give them the money and aid in this fragmentation which is going to make life in Canada so much more difficult; the alternative I suggest is that the provinces themselves must co-operate. When they ask for special concessions, each and

every province, having regard to the wish of each to obtain autonomy, must be able to co-operate one with another. I suggest that this is not impinging upon federal authority. It is paying regard to the responsibilities of the province, and this will enable co-operation to take place. I also suggest it would provide the machinery for the federal government to assist all provinces on a common basis and would bring about some uniform method of handling each change in responsibility as the need for new sources of revenue arises.
I am afraid most of us have not looked long enough and hard enough at deficits. Certainly when the Conservatives were the government the Liberals made enough noise about the deficits and how dangerous they were, but we have seen nothing to date which indicates that the danger has passed. The present trend of concessions to individual provinces has done nothing but make the problem more acute.
When we consider such fundamental responsibilities of the federal government as deficits and our need to help through external aid the less developed countries, there is no doubt that any time this government considers the changing demands of society there is no reason for us to believe there will be less demand than at present on the federal dollar. Therefore I suggest that we look With extreme suspicion on any further scheme by which federal funds may go to one province for a distinct purpose where that province is going to use its money differently than another.
I have never been too enthusiastic about a strong central government but it is only basic, facing the political facts of life, to realize that a strong central government is essential is we are to keep up as a modern nation state. Other nations have gone to great extremes. They have started trading cartels. They have formed great state trading companies and restrictions are placed on private manufacturers on the way in which they can compete in foreign markets. Many new devices and stratagems have been used by those governments to make sure that they get a fair share of the world market.
I suggest that we are going to be called on more and more for such things as export credits and export insurance, for more and more use of devices such as aid to depressed areas, and more tax concessions for industries, for new industries and expanding industries. There is going to be a greater and
Federal-Provincial Relations greater demand, and if that demand is to be met by individual provinces rather than the federal government, then the intraprovincial warfare resulting is going to cripple this nation even more than the fatal flag issue has done.
I suggest that every time we are going to consider a resolution of this type we must take a look at what it is going to do to the powers of government, what it is going to do to the relations of provincial governments one to another, as well as what it is going to do about crippling the federal government so that it can no longer meet all those responsibilities it already has, not to speak of those which will arise in the future.


Mr. Baldwin:: Mr. Chairman, I am encouraged to make a brief intervention in this debate because of the alert and intelligent interest which the Minister of Finance is giving to the members on this side of the chamber. I am sure he is absorbing with great interest the remarkable flow of ideas which have come principally from the official opposition and I hope that the bill which the minister has ready-that is, assuming it is ready in case he has not anticipated the speedy passage of this resolution-will contain some of the very intelligent and fine suggestions which members of the official opposition have been making. I am glad to see the minister has the bill and I hope by the time it is presented some of these suggestions will have found their way between the four corners of it.
The real pith and substance of the resolution will, of course, be contained in the bill which the minister is going to bring forward, and at that time there will be room for an excellent debate. At this stage I want to deal with what I think is a by-product of this resolution because it is my view that behind the fagade of the resolution there lies one of the real problems which is gnawing at the vitals of this nation, and that is the virtual stumbling position to which our federal system has now brought itself, and which is exhibited in the type of resolution such as this which the minister has introduced to the committee.
The natural tendency is to shrug our shoulders and accept the necessity of this resolution as simply being the most recent patch on the fabric of our country's constitutional system, a patch which probably covers numerous other patches. It is an attempt, as usual, to attack the consequences and to walk past the real root causes of the situation, which develop

Federal-Provincial Relations from time to time, compelling the federal government to provide these additional aids to the provinces. The trouble is like a hydraheaded monster, that every time we fix up a temporary solution of this kind unfortunately we find later that there are ten more problems which the federal and provincial governments have to deal with.
I think that is manifest when you just look at the order paper. Today there appeared under government notices of motions the bill dealing with the loans to students. A short time ago we passed the bill dealing with youth allowances. These are excellent programs. I am for them and I think they are going to do a great deal so far as the educational facilities of the country are concerned. But what are they going to do with the financial position of the provincial governments? There is going to be a tremendous amount of pressure exerted on them to provide the fiscal plant and facilities which the provinces are compelled to provide constitutionally, to take care of the increased number of students who, I hope as a result of these two measures, will be seeking to secure a better education. This means I suppose that in two or three years the minister will be met at the conference table with demands for more money to meet the requirements to provide these additional educational facilities.
There are other measures on the order paper, measures to provide for the old age pensions, in which the provinces have a direct financial concern. There is a measure to amend the Crop Insurance Act which is probably going to draw more provinces into the crop insurance field, and is going to place some financial burden on those provinces. There is a measure dealing with the department of forestry and rural development, which leads us to think of the ARDA program, which causes a financial burden on the provinces. Then there is this particular measure itself. These are just a few of them and my submission is that this simply means we are only trying to strike down the effects of our failure to deal with this matter as it should be dealt with, by going right to the root of it.
Parenthetically I think it is quite a tribute to the flexibility of our system that we have been able to adapt it, to mould it, to change it, so that when during periods of two great wars additional strength was required at the core or heart of the federal government, that strength flowed into the government at Ottawa. But conversely now, with a weak government far too sensitive and susceptible


to public opinion, with strong, almost domineering provincial governments and leaders, we find the flow of strength away from the central government to the provincial governments.
I feel that if this tendency continues and increases, as it is bound to, in the not too distant future the stresses and strains upon our constitutional system will probably cause it to snap. There is no doubt that these movements are so strong and irresistible that thoughtful Canadians are beginning to wonder if the tide will leave the federal government stripped of the minimum and essential power to deal with matters of fiscal administration and trade policy. Once this happens, then we are in a rough way.
I recall not so very long ago that the minister of revenue of Quebec, who as far as I know seems to be a very reasonable man apart from his political affiliations, suggested apparently in perfect seriousness that the federal government should consult the provincial governments prior to the enactment of fiscal and monetary policies, which are the direct responsibility of the federal government. I asked the minister a question about this and Mr. Speaker stopped me, probably quite properly. I am not sure what the answer would have been, but this just indicates the extent to which the stripping away of the powers of the federal government has gone.
There is another aspect to this matter. In a democratic parliamentary system governments should be the boss within certain limitations between elections, helped of course by a hard working and intelligent opposition. But at election time the government must face its masters, the people, and at that time any government, whether provincial or federal, should be prepared to account, on the basis of the principle of constitutional responsibility, for the moneys which it has taken from the taxpayers and has spent. What becomes of that theory under this system? The provincial governments are securing an increasingly larger share of their revenue from the federal government. In the result, Mr. Chairman, there is a failure of responsibility. The provincial governments are even boasting of the fact that they have used pressure to squeeze more money out of the federal government. If this is carried on I greatly fear it will lead to a whittling away, an erosion, of the constitution and the proper democratic powers of the legislatures of this country.

I have more to say on this subject, Mr. Chairman, but I am going to leave it until the bill is before us. I do want to make one further suggestion and then I will sit down in plenty of time for the resolution to be passed, unless what the opposition has said has stimulated members on the government side to offer additional suggestions to the minister. I support what the Leader of the Opposition had to say when he proposed that there should be a procedure of dealing with this entire matter. I do not subscribe entirely to the methods he suggested, but this matter must be tackled right at the root of the difficulty. There should and must be an examination of the entire spectrum of the relationships between the federal and provincial governments.
This cannot be done through the medium of the B. and B. commission, which is simply a forum where violent and opposing philosophies and theories meet head on. It provides a good three ring circus at times but you do not come out with any useful suggestions. You do not do so either at federal-provincial conferences of the usual type which, as I said before, are simply a bargaining table where the provincial premiers come as to an auction sale to demand, like Oliver Twist, more and more and more.
I suggest that the answer lies in a meeting of representatives of the federal and provincial governments without this paraphernalia, in an atmosphere which is free from the harsh and rasping discordance that we have seen too much of in and out of this house in connection with debates as to national symbols, which are quite important but which I do not think are appropriate at this time.
Let me conclude on this note. I think there is a general reservoir or fund of good will in all parts of the country, throughout all the various provinces whether it be Quebec, Ontario or the Atlantic provinces, but because of the character of some of the debates which have been initiated by the government that bank account of good will has had cheques drawn against it. Before it is too late, before the fund is exhausted, I suggest to the government that they should act at once to call together a conference of the type envisaged by my leader to deal with the entire problem so that we will not have to follow this piecemeal approach of trying to deal with these problems one at a time, and by the time we get one solved we find there are 10 new ones. Only in this way will we be able to make a substantial contribution to the
Judges Act
constitutional problems of this country and be able to do away with the type of resolution which we are being forced to discuss tonight.
Resolution reported and concurred in.
Mr. Gordon thereupon moved for leave to introduce Bill No. C-lll, to provide for the
revision of certain fiscal arrangements with the provinces and to provide adjustments of fiscal arrangements and taxation provisions consequential upon the provision of youth allowances to parents resident in certain provinces.
Motion agreed to and bill read the first time.



JUDGES ACT


Guy Favreau: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Judges Act to authorize the provision of salaries for seven additional judges as follows:
(a)	three judges of the superior court of Quebec;
(b)	one justice of appeal of the supreme court of Alberta;
(c)	two Ontario county court judges; and
(d)	one British Columbia county court judge.
Motion agreed to and the house went into committee, Mr. Lamoureux in the chair.


Guy Favreau: Mr. Chairman, the purpose of this resolution is to amend the Judges Act in order to provide for the salaries of seven additional judges in Canada, as follows: three new judges for the superior court of Quebec; one additional judge for the appellate division of the supreme court of Alberta; two additional Ontario county court judges; and one additional British Columbia county court judge.
Every hon. member knows that, under section 92 of the British North America Act, the province has jurisdiction to set up, organize and maintain the courts. On the other hand, under section 92 of the same act, the governor in council is responsible for appointing the judges of the superior court as well as those of the county courts. Consequently, each province, having set up a superior court or a county court, amends its legislation as need be, for the purposes of the administration of justice, to extend the membership of the court. Since the appointment of judges and

Judges Act
the payment of their salaries come under federal jurisdiction, the federal Judges Act is amended accordingly.
I must say that in the case of Alberta, Ontario and British Columbia, the provincial acts have already been amended in order to provide for an increased number of judges as indicated in the resolution under study. As for the province of Quebec, the act has not yet been amended, but it will be before the end of the present session of the Quebec legislature. The request has been formally submitted by the attorney general of the province of Quebec, following representations made by the bar, the chief justice and the deputy chief justice of the province of Quebec.
The government is following the same policy as its predecessors and I feel it is the only one possible under the constitution.
Since the administration of justice comes under the provincial authorities or governments, one must presume that whenever provincial legislation concerning the courts is amended at the request of a provincial attorney general to enlarge the scope of a court, such action it taken only after consideration has been given to the matter, that it meets a real need in the province, and on the basis of the respective responsibilities of both the attorney general and the government of the province in matters pertaining to the administration of justice within the province.
Considering that eventually judges will have to be appointed, I feel the government must amend the Judges Act; obviously, additional precautions will have to be taken when, on the recommendation of the cabinet, the Governor General proceeds to appoint judges whose salary is now set by the law.
Consequently, I would suggest to the house that when it was passed the usual stages, the act be amended along the lines I have just indicated.


Marcel Joseph Aimé Lambert: Mr. Chairman, there are just a few remarks I should like to make, first of all, on item (b) in the resolution. I am sure that, coming from the province of Alberta, I fully appreciate on behalf of the bar and all connected with the practice of law the necessity that has arisen during the past two or three years for a further expansion of the appellate division of the supreme court of that province. The population increase and the additional burdens on the court have made it absolutely essential that this be done. I am glad to see that it is being done. I am

sure that the same thing applies to the appointments envisaged in the remainder of the resolution.
However there is one point about which I should like to inquire from the minister. It concerns something that his predecessor had agreed with me should be done and it involved an amendment to the Judges Act. I am referring to a sort of lapsus that occurred last year in amending the Judges Act dealing with changes in the pensions or salary levels of certain judges who had retired just before the passage of the legislation and actually going back, I think, to deal with those who had been compulsorily retired in 1961. Perhaps this would have been the cut-off date. There were some rather, shall we say, agonizing cases-I do not like to use the phrase "distressing cases"-but there were some hard cases. The changes in the judges' salaries had been envisaged for some considerable time. They had been seriously considered by the previous administration but they were so tied with other things they were not brought forward. I am wondering why, at this stage, the minister has not proposed or the government has not proposed we review this matter, because it has been my understanding both with his predecessor and with the government leader in the other place, that this likely would be attended to at the next opening up of the Judges Act.
I must regret this has not happened on this occasion. Of course, there is still an opportunity during this session to deal with the particular item of business and if the Minister of Justice, in his capacity as house leader, wishes to have another one of these fillers on the legislative side, we would certainly entertain an amendment to the act regarding the matter I have suggested.


Guy Favreau: In reply to my hon. friend I may say that this is one question upon which I have received, and my predecessor as well, a relatively large amount of correspondence. It is a matter, of course, which entails so many ramifications it was quite difficult to deal with it in this bill. Furthermore, I must say that I have my views as to future amendments of the Judges Act. It is my intention to proceed in as organized a fashion as possible by asking the attorneys general of the various provinces to provide me, before a set date in any session, their representations as to the plans of their respective provinces concerning the judges.
To come back to the suggestion that has been made, I can only assure the hon. member

that I have given very serious consideration to the matter. I must be very frank and advise also that because no solution has been arrived at as yet, we could not proceed with the matter in this bill.


Mr. Benidickson:: Mr. Chairman, on Friday, July 10, as reported on page 5299 of Hansard, the hon. member for Port Arthur raised the question addressed to me, I think-


Lucien Lamoureux: Order.


William Moore Benidickson: -I wonder whether it would be proper if this were raised tonight?


Lucien Lamoureux: Well, perhaps it might be suggested to the minister that he raise the question with the Speaker in the chair. Shall the resolution carry?
Resolution reported and concurred in.
Mr. Favreau thereupon moved for leave to introduce Bill No. C-112, to amend the Judges Act.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Mr. Churchill:: May I ask the leader of the house if we shall be considering the loans for students legislation tomorrow?


Guy Favreau: Yes, it is our intention to proceed tomorrow with the second reading and committee stage of the students loans bill and, unless third reading is agreed to immediately, we shall proceed with the second reading and committee stage of the federal-provincial fiscal arrangements bill.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.


Herbert Wilfred Herridge: Before proceeding with my question I should like the parliamentary secretary to extend my sincere congratulations to the minister on his success in connection with his prayers for rain. This is one of the most successful government policies to date.
On July 9 I asked the minister the following question:
Has the minister any information he can give the house with respect to the announcement of
Proceedings on Adjournment Motion Premier Bennett of British Columbia that his government intends to proceed with the development of the hydro potential of the Fraser river and expects the federal government's financial assistance to this end?
That question was prompted by newspaper items headed: "Bennett Adds Fraser in River Development" and "Bennett Adds Fraser River to Power Plans". In particular, it was prompted by a news editorial broadcast on July 8, 1964, over radio station CHQM in Vancouver which reads as follows:
At his breakfast meeting this morning with B.C. investment dealers, Premier Bennett had what might be called a captive audience. Not only that-the audience couldn't have been more sold on Mr. Bennett's promotion. The promotion, of course, was B.C. hydro's latest issue of small denomination parity bonds to help finance the Peace river power development.
Mr. Bennett has had tremendous success in marketing these bonds ever since he started doing it in 1959. The public has snapped them up, and the financial community quickly became convinced that it was a good way to turn a dollar.
So when Mr. Bennett said this morning that-
And they are quoting Mr. Bennett.
-"these are B.C.'s greatest years," there was no word of dissent from the investment dealers. They knew a good thing when they saw it.
I quite agree with that.
The most interesting segment of the premier's remarks, however, did not concern parity bonds. It was when he dealt with development of flood control and power producing works on the upper reaches of the Fraser river that he perked up the ears of his listeners.
The proposed development was not new-It had been recommended earlier by the Fraser river development board, a federal-provincial agency.
What was new was the premier's decision to go ahead with it right away. He was careful, in his talk to the investment men, to assure the salmon fishing industry that the value of the Fraser as a spawning river would not be diminished by the development.
But flood control in the 100 mile long Fraser delta and valley was vitally essential. The development in the upper reaches would provide this-as well as two million horsepower of electrical energy-with B.C. and Ottawa sharing equally in the flood control costs.
To the investment men, this was good news, for it meant continued expansion of B.C. hydro, and B.C. hydro would have to go to the money market to finance a good part of it.
His request for support of the investment industry to his application for Ottawa participation in the financing, can be expected to be met without qualification.
It is not certain that the fishing industry will be so enthusiastic. For at a press conference following the breakfast, the premier seemed to downgrade the fishing interests. The first public interest, Mr. Bennett said, was the protection from floods of the Fraser valley and delta, with its tremendous investment in real estate.


William Moore Benidickson: Order.
5430	HOUSE OF
Proceedings on Adjournment Motion


Herbert Wilfred Herridge: To the investment industry, it was "Boomer" Bennett in his best promoting style. But to the salmon industry-and to others interested in the protection of the fishery-it may have been a sign that Mr. Bennett would love to get his hands on the mighty power potential of the Fraser.
That is a very interesting comment on the part of the radio station with respect to Premier Bennett's treatment of these investment dealers. Premier Bennett is fond of investment dealers. I should like to ask the parliamentary secretary if he can inform the house whether there have been any discussions with the government of British Columbia with respect to this development. Have any proposals been made? Have there been any discussions with respect to the possibility of damage to the fishing industry? Have there been any discussions with respect to the locations of dams, as to the cost of those dams and the cost of the total flood control? Has there been any agreement with respect to proceeding in the near future with this development outlined and announced by Premier Bennett? If so, has the government of Canada indicated its intention to share in the cost of this power development and flood control on the Fraser river, and what is the cost going to be?


Mr. John N. Turner (Parliamentary Secretary to Minister of Northern Affairs and National Resources):: Mr. Speaker, the series of questions posed at the end of the remarks of the hon. member for Kootenay West is rather beyond a three minute reply. I am sure we are grateful to him for having read into the record in the late evening show the noon editorial from Vancouver. I would like to direct his attention to the answer the minister gave on July 9-which was the same day as the hon. member posed his question-* to his colleague, the hon. member for Comox-Alberni (Mr. Barnett). This answer is to be found at page 5245 of Hansard.


Herbert Wilfred Herridge: I have read it. It did not tell all the story, though.


John Napier Turner: I would suggest, Mr. Speaker, with the greatest respect, that the answer the hon. member seeks this evening is found in fairly full measure there. First, upon receipt of the final report of the Fraser river board on flood control and hydroelectric power in the Fraser river basin, which was tabled in this house and which I am sure the hon. member, with his customary thoroughness, has already read from cover to cover, the Minister of Northern Affairs and National


Resources (Mr. Laing) was in touch with Hon. Ray Williston of British Columbia and, pursuant to those original communications, the two ministers met together to discuss the consequences, in preliminary fashion, of this report. I might say that the first concrete measure undertaken will be the $4J million strengthening of the Fraser river dike works, particularly along the lower reaches of the river. That proposal has been accepted by the federal government, and the work on the more dangerous spots along the river will be commenced in short order.
As for the response to Premier Bennett's proposal about the power development and flood control on the Fraser, the minister welcomed that announcement but at the moment we are awaiting an application from the province of British Columbia. We are also awaiting the facts and figures to be adduced by the premier as between flood control and power.



INDUSTRY-TIMMINS, ONT.  FEDERAL PARTICIPATION IN MINING DEVELOPMENTS

Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, on Friday last I asked a question as follows:
What part, if any, did he-
That is referring to the Minister of Mines and Technical Surveys:
-or his officials play in the negotiations and discussions between the Ontario department of mines and Texas Gulf in connection with the prospective developments around Timmins?
The reason I put the question when I did is because there is a current interest in the developments in Timmins. I thought there was a smart analysis by the financial editor of the Toronto Star the other night when he made the point that all the hullabaloo that is being raised in the Timmins area about locating the smelter and refinery there tends to gum up the fact that straight economics will determine the location of the smelter or the refinery, and that it would be just as well probably if the concentrates were shipped, as the company seems to plan, to North Carolina for production. It seems to me that while this argument of Mr. McArthur in the Toronto Star may be true, and while it may be true that the mining industry in particular is not one which welcomes government intervention, except in the form of subsidies on occasion, there is a role that the federal department of mines should be playing or could have played in this particular argument, and this argument is going to go on.

I put this argument in this form. The department of mines is the oldest research organization in Canada, and in recent years it has been moving into the field of doing more and more economic analysis. I should like to point out, Mr. Speaker, that last year it published a report entitled "Lead and zinc in Canada, 1961" by D. B. Fraser and J. W. Patterson, a pamphlet consisting of some 90 pages which went into the whole pattern of the market for these two minerals. Then there was published in 1963 a paper by R. B. Elver, T. H. Janes and J. H. Walsh entitled "Technical and economic factors in the choice of steel plant location", which advises where industry should locate its steel plants. This year the mineral information bulletin included one entitled "Canadian minerals in national and international perspective", by
B. Tooms. This study is designed to describe the growth and present status of the Canadian mineral industry and to measure its importance in the Canadian economy in the world mineral industry. I mention these particular publications to indicate that the department has an interest in the economics and location of various aspects or parts of the mining industry, and yet has done nothing substantial about what has been in recent years the booming part of the mines and metal markets, which is lead, copper and zinc, which I understand are the main metals discovered in the Timmins strike.
The other point I wanted to make about this is that we have had a most heterogeneous kind of discussion and the people of Timmins are getting up in arms because they want the smelter here and the refinery there. There is a pattern of information available and there are things the federal government can do in analysing and providing information which could clear up a great deal of this mystery.
I remember a year or two ago in the railway committee when we were asked to approve the building of a railway which would lead to the location of a smelter for zinc at Valleyfield, near Montreal. A lot of people do not realize that there is a different approach required to the smelting of lead, of copper and of zinc. A lot of people do not realize that in eastern Canada at the present time there are no real facilities for refining lead or zinc; although there is for copper, particularly at Noranda. I understand this will be a kind of mixed production in the Timmins area.
In this sort of trouble situation where we are getting pleas to the Department of Industry and the provincial department of mines
13, 1964	5431
Proceedings on Adjournment Motion from a whole area, seeing its economic future beginning to brighten and wanting to get the most out of it, I suggest that the department of mines, federally the oldest research organization in Canada in this field, with all the material available to it, should be right in there building railways, building up studies for the placement of refineries or smelters in certain places, and also considering the whole question of tariff negotiations with the United States, which is the major market for these products.
One of the many reasons why the refining of lead and zinc is done in the United States hinges on a very complicated tariff policy. In copper everything hinges on world arrangement. As I say, in this complicated field surely we should expect our oldest mines organization, our oldest research organization and the minister who heads that organization, to be playing some kind of role in the largest, most exciting mineral discovery we have had in Canada for some years. It is for this reason that I placed this question.
I should like to know what part the federal department has been playing in this regard, and I think we deserve an answer.
If the minister could get his department working in this field in supplying information and suggestions it could do a great deal to clear up what I think is going to be a lot of misunderstanding. If the concentrates in toto that come out of the Timmins development are shipped to the United States or to Europe, in the main, for their further processing rather than being smelted or refined in Canada, the old cry is going to go up that we are selling our resources cheap, that we are not producing enough in this country. It may be legitimate, but my point is that up to now we do not know what role the Department of Mines and Technical Surveys can play in providing information and indicating where the smelters or refineries should go and what should be done, and I think it is a bit of a shame.


William Moore Benidickson: Mr. Speaker, the hon. member for Port Arthur (Mr. Fisher) has referred to some of the spectacular discoveries minewise that have developed near Timmins in a territory in which he is as interested as I am. His question on the order paper was what part, if any, did the minister and his officials play in the negotiations and discussions between the Ontario department of

Proceedings on Adjournment Motion mines and this private company, and I want to tell him that so tar as I was concerned the answer is none.
The reason is that our department is a department of research. I think that in the early stages we played a very great part through the new opportunities that are available, with helicopters, airplanes and other overhead means of getting the value of the ground underneath, but personally I had nothing to do with this. Afterwards our department plays a very big part in co-operating with industry, following a discovery of this kind.
We have here in Ottawa several of what are almost factories of a fabulous nature that would help them to utilize the ores that they might get out of their ground. The hon. member for Port Arthur has raised this question of co-operation with the provincial government. The staking was entirely through provincial agencies, and the federal minister heard nothing about this. There are some additional properties that have some potential-


Mr. Deputy Speaker:: Order. I regret to interrupt the minister but his time has expired.



AIRPORTS


Maurice John Moreau: Mr. Speaker, I want to speak very briefly tonight about the problem of transportation from Toronto international airport. The hon. member for York-Humber (Mr. Cowan) raised this problem on June 11 and spoke of the monopoly situation that exists. He pointed out that this contract, involving some $1,800,000 of gross revenue, was let without tender for a period of 10 years and was entered into by the previous government in 1960. On June 22 in reply to question No. 1,304 the Minister of Transport set out the justification for this monopoly and, as found on page 4541 of Hansard, the answer reads in part as follows:
They are required to provide modern equipment, to carry public liability insurance, and provide uniformed employees. All of this requires a very heavy capital investment on the part of the company, and to maintain such an investment it is necessary that the company be given exclusive rights to the passenger traffic offerings at the airport. To permit unrestricted competition from taxis would make the whole operation economically unsound. Without granting the company exclusive rights, it would be impossible to provide the type of service required by the travelling public.

I want to ask the minister if those are his words, his conclusions, or if they are the words of some official in his department because I should like to know on just what basis these conclusions were reached. What sort of survey or report resulted in this sort of conclusion and what are the facts behind such a conclusion? Personally I do not accept this answer in view of the size of the business today at Malton airport. It might have been true 10 or 15 years ago but certainly anyone who has spent any time at Toronto international airport, particularly since the new terminal building has been opened, would not accept that answer.


Douglas Mason Fisher: We tried to tell the minister in the T.C.A. committee.


Maurice John Moreau: If we are to accept this monopoly until the expiry of the contract in 1970,
I want to ask the minister if he will at least treat Scarborough as a separate community outside of the present contract. I say this because the monopoly which was set up to give a service required by the travelling public, to use the words in the answer to the question, does nothing to give service to the 350,000 people who live in the east and north sections of Toronto.
The bus service now available travels down highway 27 and along the Gardiner expressway to the Royal York hotel


Douglas Mason Fisher: The good old C.P.R.


Maurice John Moreau: -without any intervening stops. The hon. member for York-Humber (Mr. Cowan) has told me about a constituent, Mr. Charles Ring, who lives in Mimico, which is on the route that the bus travels. He is required to travel to the Royal York and then struggle back home on the streetcar. This man is 88 years old. I suggest that what we have here is an exclusive franchise to operate a bus line between Toronto international airport and the Royal York hotel which enjoys the benefit of a captive public who are required to use the vehicles provided by Air Terminal Transport Limited.
I am one of those who live in the east end of Toronto and it costs me some $9.75 to travel to my home by means of this service to the travelling public. If I am to take the limousine service from the Royal York I am still a 40 minute drive away from that hotel which involves a $5.50 or $6 cab fare. On the other hand, I am only a 40 minute drive from the airport if it were possible to travel by highway 401.

I suggest to the minister that he ask Air Terminal Transport Limited to provide a bus service to the east end of Toronto. They could make a pick-up at the Cedarbrae shopping plaza at Markham road and Lawrence avenue, make an intervening stop at Don Mills shopping plaza at Lawrence and Don Mills road and then travel by highway 401 out to the airport. The trip could be made in 40 minutes and I am sure the fare would not have to be any more than $2. I suggest to the minister that, as I said, there are about 350,000 people who need this sort of service. There are 60,000 people who live inside the metropolitan Toronto boundary who are still living east of where I am. There are 60,000 people who live north of Lawrence avenue. I suggest that this is certainly a large enough public to require this kind of service.


John Whitney Pickersgill: Mr. Speaker, I think I will have to do what I think I have never failed to do when I have been a minister, and that is take responsibility for the answer I gave the other day and not attempt to identify anyone who may have advised me to give that answer. I think that the first thing of which we have to be sure is that there is going to be some form of transportation at the airport, whenever aircraft arrive, for those people who are not residents of Toronto but are coming to Toronto from some other place. They are entitled, as well as those living in Toronto who do not have their own motorcars, to be sure of some form of transportation at the airport.
I confess that I am an old fashioned Liberal and I do not like monopolies. If there were some way of avoiding a monopoly situation, I would be very happy to do it. I have listened to representations both in the house and out of the house. I even had a delegation come to
13, 1964	5433
Proceedings on Adjournment Motion me including two of my colleagues in the cabinet. This suggests to me that these people who are able to get elected in Toronto, and they happen to be mostly supporters of the government, I am happy to say, probably have a fair idea what the people of Toronto are thinking. I asked the head of the company to come to see me this week. I am going to go over some of these difficulties with him. I am very much impressed, particularly by the statement by the hon. member for York-Scar-borough (Mr. Moreau) that there are as many people in the northeastern part of Toronto as there are in the city of Hamilton. It seems to me that they ought to be entitled to service, not superior to that given Hamilton, but equal to it. If there is any way of assuring that the service will be satisfactory to all parts of the area and that it will not be unduly costly, I shall be glad to do everything I can.
I can take no responsibility whatever, and I do a Pontius Pilate act in this matter, for the way in which this contract was renewed in 1960. This was someone else's responsibility, and he can take it. The contract was made and, as has been the custom of governments thus far in this country, it has been honoured even though made by a predecessor and even though we may not entirely agree with it. I hope we will not soon change that custom in this country. It is obvious that since hon. members on both sides of the house who are elected by the people make these suggestions, there must be some ground for some feeling that the service is not satisfactory. I am going to try my best to find out what the difficulty is and to help see it is removed.


Mr. Deputy Speaker:: Order; the minister's time has expired.
Motion agreed to and the house adjourned at 11 p.m.

Tuesday, July 14, 1964