1964-04-03

Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, I should like to table copies in English and in French of the communique of the federal-provincial conference held this week in Quebec city, and copies in English and in French of the opening statement which I made dealing with conditional grants and shared cost programs. I propose to make a more extended statement on the conference itself on Monday; meanwhile members will have these documents before them for examination over the week end.

On the orders of the day:


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the Prime Minister a question concerning the documents arising out of the federal-provincial conference which he tabled this morning? The right hon. gentleman said we would have them over the week end. In what way? Are they being made an appendix to Hansard or are copies being supplied to members?


Lester Bowles Pearson: I am sorry. I should have inquired whether the house would like to have these documents appear as an appendix to Hansard. I meant to have done that.


Stanley Howard Knowles: I suggest that that be done. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Order. Is it the wish of the house that the documents tabled by the Prime Minister this morning be printed as an appendix to Hansard?


Some hon. Members:: Agreed.
[Editor's note: For text of documents above referred to, see appendix.]



BUSINESS OF THE HOUSE

[Stage Direction]
On the order: Motions:
March 27-The Prime Minister:
That, immediately after royal assent has been given to the bill providing for the appropriation based on supplementary estimates (E), this house adjourn until Monday, April 6, 1964.
Mr. Speaker:: Motions. The Prime Minister. Stand?


Lester Bowles Pearson: Stand.


Mr. Howard:: Mr. Speaker, would it not be appropriate to withdraw this motion?
Motion stands.



DOMINION-PROVINCIAL CONFERENCE INQUIRIES RESPECTING MATTERS DISCUSSED AND STATEMENTS MADE

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, while the Prime Minister has said that he intends to wait until Monday, I am sure the house would welcome some statement today regarding the conference in Quebec city, which turned out to be-


Some hon. Members:: Question.


John George Diefenbaker: - a fiasco. I should like to ask the Prime Minister, with reference to the pension plan, whether he is now in a position to tell the house that the plan will be proceeded with even if two provinces do not participate. For I recall that on March 14 he stated that the absence-


Some hon. Members:: Question.


John George Diefenbaker: - of two provinces would destroy the possibility of this bill. Will the government go ahead with the bill regardless of how many provinces may enter the scheme?


Lester Bowles Pearson: Mr. Speaker, I will ignore the right hon. gentleman's introduction to his question about the conference except to say that I recognize his authority to speak on conference fiascos.


John George Diefenbaker: This one is a superlative example.


Lester Bowles Pearson: As to his particular question, I am glad to inform the right hon. gentleman that the government intends to proceed without delay with the consideration of the Canada pension plan, and nothing happened at the Quebec conference which will interfere with our desire, indeed our determination, to get this plan into action.


John George Diefenbaker: Mr. Speaker, I would ask the Prime Minister whether, if two or more provinces do not join the plan, his determination is equally certain.

Inquiries of the Ministry


Lester Bowles Pearson: Mr. Speaker, the right hon. gentleman's hypothetical question does not affect our determination to proceed with this matter.


Mr. T. C. Douglas (Burnaby-Coquitlam):: In
welcoming the Prime Minister's statement that the government will proceed with the Canada pension plan, may I ask him this. If the two senior provinces decide to stay out, will the right hon. gentleman consider reverting to the terms and conditions which were outlined on July 18 last rather than following the terms which are now on the order paper, in view of the fact that this modification was made largely to ameliorate some of the difficulties which obtained between the federal and provincial governments?


Lester Bowles Pearson: That, of course, is also a hypothetical question, though it is an important one. When the hon. gentleman talks about provinces staying out, I would remind him that only one province has indicated its intention to proceed with its own plan. We are proceeding on the assumption that there is only one province which has indicated such an intention and that, therefore, nothing has happened which would alter our determination to go ahead with our own plan.


Thomas Clement (Tommy) Douglas: I certainly hope the Prime Minister's statement proves to be true. But does he not take the statement by the premier of Ontario as indicating that Ontario may follow the course proposed by the province of Quebec?


Lester Bowles Pearson: I did not interpret the statement in that way. If the hon. member reads the text of what was said at the press conference given by the premier of Ontario he will see that the premier did not commit himself to any course of action. He has not committed himself to any course of action since we first introduced our plan.


Mr. Barry Mather (New Westminster):: wish to direct a question to the Prime Minister. Perhaps the right hon. gentleman would like to take it as notice and deal with it when he makes his full statement on Monday. The federal and provincial administrations have, as I understand it, agreed to establish a joint ministerial committee to review finances. My question is, will the third level of government be included in such consultations?


Lester Bowles Pearson: In federal-provincial committees and meetings of the kind to which the hon. member has referred it has been the custom in the past and, I think, the constitutionally appropriate custom, to have the municipalities represented by the provinces to which they are responsible. If there is to be any change in this constitutional procedure,
[Mr. Diefenbaker.)

that change would have to be made by agreement with the provinces. Indeed, I think it would have to be initiated by the provincial governments.


John George Diefenbaker: In connection with that plan to convene a conference representative of the federal and provincial governments, if I understood the Prime Minister correctly he indicated at his press conference last night that all the provinces had agreed to this plan. I would ask him whether Premier Lesage did not say last evening, in his statement to the press, at the bottom of page 1, after referring to the interpretation of the projects:
Be that as it may, I merely say we would like to give further thought to this question before making a statement.
I ask the Prime Minister this. Did he or did he not have an assurance from Premier Lesage, as he apparently indicated in his statement last evening, that the province of Quebec would participate in these conferences?


Lester Bowles Pearson: The premier agreed with the communique in which the nature of this inquiry was set out and its desirability was referred to. Premier Lesage joined the other premiers in welcoming such an inquiry. He has not yet indicated the intention of his government to participate in the actual membership of the committee itself. He is waiting to hear from us as to the nature of the committee and the kind of representation, and he has informed us, as he informed the press conference yesterday, that he would then decide whether Quebec would actually participate in the representation on the committee.


Mr. Raymond Langlois (Megantic):: Mr. Speaker, I should like to direct a question to the Prime Minister.
There were reports coming from the federal-provincial conference to the effect that the federal government would transfer a larger share of direct taxation to the provinces. Could the Prime [DOT] Minister tell us whether that policy would apply only to provinces not taking part in the health insurance program or to all provinces?


Lester Bowles Pearson: Mr. Speaker, there would be no distinction made with regard to any province in this matter.


Mr. Marcel Lessard (Lake St. John):: Mr. Speaker, should the Quebec government impose double taxation, could the Prime Minister now tell us if the Liberal government in

Ottawa intends to withdraw proportionately from that tax, which would apply in Quebec, as was the case in 1954 under this same Liberal party?


Lester Bowles Pearson: Mr. Speaker, that is a matter of government policy. No consideration has been given to it and no consideration can be given to it, of course, until we find out what the plans of the government of Quebec are.


Marcel Lessard: Mr. Speaker, does the government intend to study the policy advocated by the previous Conservative government to the effect that direct taxation would be proportionately handed over to the provinces at the rate of 1 per cent per annum at present or does it intend to put directly at 20 per cent the transfer to the provinces out of the revenue of direct taxation?
[Text]	.


Lester Bowles Pearson: Mr. Speaker, this is a matter of policy which will have to be considered.


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister. I wonder whether the Prime Minister can match the assurance he has given us about the Canada pension plan by confirming the government's intention to go ahead at this session with its announced intention to extend family allowances to those 16 and 17 years old?


Lester Bowles Pearson: Mr. Speaker, we have heard nothing on this point which would warrant any intereference with or any delay in the plans we have put forward. However, this matter did come up at the conference, as my hon. friend knows, and in the communique the federal government merely stated that it would study the views expressed by all the premiers on this matter at the conference.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. Does this apply also to the matter of student loans; and in view of the fact that the premier of Quebec has indicated the intention of his government to appeal this matter to the courts, is it the thought of the federal government that there might be a reference to the Supreme Court of Canada to determine the question of the constitutionality of these measures?


Lester Bowles Pearson: That would be one way to clear up this matter. I think I should add that we would not have introduced these proposals if we had had any doubt whatever as to their constitutionality.


John George Diefenbaker: Mr. Speaker, the Prime Minister has just made a summary statement,
Inquiries of the Ministry and in that connection I ask him this question. Is it the opinion of the government, received from the law officers of the crown, that the system of loans proposed in the speech from the throne is entirely within the competence of the federal parliament?


Lester Bowles Pearson: Yes, Mr. Speaker, I have just said that, and I am glad to repeat that we think this is within the competence of the federal parliament, particularly in view of the procedure we intend to propose whereby these loans will be made to individuals through the banks with the federal government guaranteeing the banks.


Hon. Theogene Ricard (St. Hyacinlhe-Bagot):: A supplementary question to the Minister of Finance, Mr. Speaker, with regard to the family allowances to be paid to 16 and 17 year old students. Were the provincial governments consulted before the minister decided to enter this field?


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, there were no consultations with outside people, including the provinces, before the presentation of the budget.


Mr. L. J. Pigeon (Jolieite-L'Assomption-Montcalm):: Mr. Speaker, I wish to direct my question to the Prime Minister. Does he intend to withdraw or amend the bill concerning loans to students as a result of the protests of certain provinces?


Lester Bowles Pearson: I have already dealt with that matter.


Thomas Clement (Tommy) Douglas: May I put a question to the Minister of Finance. In view of his offer to the provinces at the federal-provincial conference at Quebec city, that the federal government is willing to withdraw from the hospital insurance plan and will grant the provinces a 13 per cent abatement of personal income tax for taking over this program, does this mean the federal government has forsaken the idea of extending the hospital insurance program into a comprehensive federal health insurance program?


Walter Lockhart Gordon: In the first place, my hon. friend has put words into my mouth that I have not uttered. There have ben discussions about contracting out of a number of the shared cost programs including hospital insurance. The formula for arriving at fiscal compensation for such contracting out has not yet been settled. I do not think I can add anything more in answer to the first part of my hon. friend's question.

Inquiries of the Ministry
As to the second part of the question, this is a matter of government policy upon which I am not in a position to comment at this time.


Thomas Clement (Tommy) Douglas: May I ask the minister whether or not one term for granting the abatement of personal income tax to any province contracting out will be the condition that they must continue to give reciprocity to other parts of Canada with reference to hospital insurance?


Walter Lockhart Gordon: There was some discussion on the part of the provinces, particularly by the province of Quebec, on this point. They made it very clear that if they did contract out they would provide reciprocity and an exchange of services with the other provinces. They pointed out also that they would continue the plan.


Thomas Clement (Tommy) Douglas: That is not the question I asked the minister. Would this be a condition which the federal government would impose upon granting them an abatement of personal income tax? Would this be done only if they were willing to continue reciprocity with the other provinces?


Walter Lockhart Gordon: In answer to the hon. member's first question I said that the terms and conditions have not yet been settled, so I think it would be premature for me to comment on one particular condition which is something that I am sure will be given the closest consideration.


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister. My question is related to the subject of the hospital insurance plan to which reference has already been made. Would it not be a good idea to defer any alterations in that plan until we have the report of the royal commission on health services, particularly in view of reports that this commission may well recommend a nation-wide health insurance scheme?


Lester Bowles Pearson: Mr. Speaker, I appreciate the point the hon. gentleman has made, that no changes should be made in matters of this kind before the report is received, and indeed there is to be a meeting of provincial ministers of health and the federal Minister of National Health and Welfare very shortly. I take it the hon. member's question is referring, however, to a change in the plan and not to a formula with one province contracting out of the plan.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Minister of Justice which he may want to take as notice. As one of the ministers charged with


the responsibility of negotiating with the Quebec government in connection with the administrative transfer of Eskimo responsibilities, can he advise the house whether this was discussed at the recent federal-provincial conference, and whether Mr. Levesque and his government have given their consent to having the agreement brought before parliament for consideration?


Hon. Guy Favreau (Minister of Justice):: Mr. Speaker, it was not discussed either before or after the conference.


Marcel Lessard: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister of Canada. Does he share the opinion expressed by the premier of Ontario to the effect that representatives, in Ottawa, of the provinces which will not participate in the Canada pension plan should not Ije allowed to express in the house their views on that subject nor vote nor move any amendment whatever?
Since half the government is made up of members from the province of Quebec, does the Prime Minister share the opinion of the Ontario premier?


Lester Bowles Pearson: Mr. Speaker, I do not think I should be asked whether I share the opinion of the premier of a province, especially an opinion which I did not hear him express in Quebec.


Mr.  A. B. Paiierson@Fraser Valley: Mr. Speaker, according to reports in the newspapers certain discussions took place at the conference relative to offshore mineral rights. I should like to ask the right hon. Prime Minister whether any decision has been made as to the procedure to be followed in resolving the dispute over offshore mineral rights.


Lester Bowles Pearson: Mr. Speaker, this matter was raised by the premier of Nova Scotia at the end of the conference and received rather brief discussion in the circumstances. I informed him, as I am glad to inform the house, that this matter is under consideration. It is a very important matter both legally and economically. It affects not only Nova Scotia but a good many other provinces, and affects them in rather different ways. It is complicated, but we are proceeding with our examination and hope to be able to work out a satisfactory conclusion which may make unnecessary a reference to the courts.


Mr. Gerard Girouard (Labelle):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare.
Does she agree with the premier of Ontario when he intimated in Quebec city that the pension plan introduced by the province of Quebec is better than the one put forward by the federal government.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I hope you will give me your consideration in addressing a question to the Prime Minister which I think is of the utmost urgency. In view of the experience of the Prime Minister at this recent provincial-dominion conference and others, would he take under consideration the calling of a dominion-provincial conference of an enlarged character, including both governments and oppositions, in order to try to bring down to a definite basis, not in two or three days but after the necessary consideration, the future of Canada as a nation, so that we can get away from all this provincialism, parochialism-


John George Diefenbaker: Socialism?


Harold Edward Winch: -and all the rest of it which affect not only the people but the provinces and country as a whole? I think this is an urgent matter in which most of us are very interested. Is it possible in view of your responsibility as Prime Minister, sir, to give this type of leadership to Canada by calling such a conference with such purpose in view?


Lester Bowles Pearson: Mr. Speaker, the hon. gentleman has indicated to the house the urgency he attaches to this matter, and it is an urgency shared by all of us. But I am sure he would not expect me to deal with such a fundamental question as that on orders of the day.


Harold Edward Winch: Will you take it under consideration, sir?


Lester Bowles Pearson: I will be very glad to take it under consideration.


Mr. E. Nasserden (Rosihern):: Mr. Speaker, I should like to direct a supplementary question to the Prime Minister arising from his government's repeated proposals for contracting out of national programs. How long does the Prime Minister think it will take his government to complete the separation of Quebec from the rest of Canada?
Inquiries of the Ministry Mr. Pearson: Mr. Speaker, that is the kind of question which is not designed to strengthen national unity and should not be asked by the hon. gentleman.


Edward Nasserden: Mr. Speaker, does-


Mr. Speaker:: Is the hon. member asking a new question? There is no supplementary involved.


Edward Nasserden: This is following upon the answer I received from the Prime Minister. Does the Prime Minister not think that suggestions which promote the contracting out of national programs do more to disunite this country than anything else done in recent Canadian history?


Lester Bowles Pearson: No.


Raymond Langlois: On a point of privilege, I think the hon. member on this side of the house should probably go and work for Mr. Robarts in Ontario and start converting the Conservatives instead of the people from Quebec.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I have a question for the Prime Minister. In view of the fact that several members have asked questions this morning with regard to the federal-provincial conference, can the Prime Minister tell us whether the last federal-provincial conference has been helpful in strengthening national unity or rather has resulted in further complications?


Mr. Speaker:: This question is out of order. [Translation]


Mr. Henri Laiulippe (Compion-Fronlenac):: Mr. Speaker, my question is directed to the right hon. Prime Minister.
Does the government intend to bring about a reform of the constitution which would take into account the present problems or will we allow it to fall apart without trying to find real solutions to such problems?


Mr. Speaker:: Once more, these questions are purely hypothetical.


Raymond Langlois: Mr. Speaker, referring to the question I put a moment ago to the Prime Minister, I wish to say that the answer he gave does not tally with that of the Minister of Finance (Mr. Gordon). I asked him what was the policy of the government in the case of provinces who asked that direct taxation powers be returned to them and if the policy

Inquiries of the Ministry would apply to all provinces even though they are not participating in joint health insurance programs?
The Prime Minister answered then:
There would be no distinction made.
Could he give us a more elaborate answer, since the Minister of Finance has not heard anything about that yet?


Mr. Speaker:: I feel it my duty to interrupt. That type of question is, in my opinion, out of order at this time. The Prime Minister has already stated that he will make a detailed statement on Monday. He has suggested that members read the papers which he has filed this morning. May I suggest to the hon. member that he wait, read those papers and listen to the statement.


Louis-Joseph Pigeon: Mr. Speaker, may I direct a question to the Minister of Justice?
Since there are serious differences of opinion between the provinces and the federal government regarding certain fields of jurisdiction and powers, does the Minister of Justice propose to call a federal-provincial conference in order to find a way to revise or re-think the Canadian constitution and define the respective limitations of the various governments?


Guy Favreau: Mr. Speaker, although I do not agree with the first part of my hon. friend's question, I can say that if and when the government decides to take such action, it will be announced in the normal way.


Mr. Donald Maclnnis (Cape Breton South):: I have a question for the Prime Minister. Should the legislation on the Canada pension plan be brought forward after a final decision has been made by Ontario to contract out, if that is its intention, and in view of the fact that Quebec has already opted out, does the right hon. gentleman not think that the house will be put in a most awkward position in that members from Quebec and Ontario, the majority of members in this house, will be dealing with legislation which in no way affects their provinces but which does have a definite effect on the other provinces involved?


Lester Bowles Pearson: That is a hypothetical situation which I hope and believe will not arise.
[Mr. Langlois.l


Henry P. Latulippe: Mr. Speaker, I should like to put a question to the Minister of Finance concerning the federal-provincial conference just ended.
Since the whole thing apparently amounts to nothing but a real financial problem, could the minister tell the house if he is thinking of reforming the financial system or remaining at odds with the provinces?


Mr. Speaker:: The hon. member for Jo-liette-L'Assomption-Montcalm.


Louis-Joseph Pigeon: Mr. Speaker, I should like to direct a question to the Prime Minister. Since the pension plan has been given the name of "Canada pension plan", does that mean that Quebec, with its own pension plan, is no longer a part of Canada?


Lester Bowles Pearson: Mr. Speaker, I am sorry to say that my hon. friend's technique in asking questions has not improved while I was away.


Louis-Joseph Pigeon: Mr. Speaker, I would have a further question for the right hon. Prime Minister. Does he not believe that if he really wants co-operative federalism, particularly in connection with a pension plan, one of the ways of achieving it would be to ask the Minister of National Health and Welfare (Miss LaMarsh) to resign or to switch to another department?



PENITENTIARIES


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I desire to ask the Minister of Justice if the days of indecision are over and he is now able to inform the house whether a positive decision has been made as to the location for the proposed new penitentiary upon which work was supposed to have started early this year?


Guy Favreau: I suggest that this is a question for the order paper, Mr. Speaker.


Harold Edward Winch: May I ask a supplementary question. In view of the announcement made some time ago that construction was to start early this year, which would require planning, can the minister not now inform us whether a decision on the location has been made?


Mr. Speaker:: In spite of the importance of the question, I believe the minister is entitled to notice and the question should be put on the order paper.


Harold Edward Winch: Mr. Speaker, may I address a question to the Minister of Justice and ask him is he able to inform the house whether the public statement made by his predecessor, Hon. Lionel Chevrier, to the effect that the Department of Justice had made its decision as to the construction of the women's penitentiary at Cornwall, was true or false?


Guy Favreau: Mr. Speaker, I trust the hon. gentleman will allow me to take further cognizance of whatever statement he is presently referring to, and consequently allow me to take the question as notice.
Inquiries of the Ministry


Mr. Speaker:: Order. I do not see any pressing urgency to this question. If the hon. member wishes a detailed answer, would he please put the question on the order paper.


J.-H.-Théogène Ricard: Mr. Speaker, I would very much like some more information. I have been asking those ministers across the floor about this all of last year and I could not get any reply. That is why I grasped the opportunity this morning to ask for some more information.


Mr. Deschatelets:: May I answer this by saying that this project to construct a penitentiary in the riding of St. Hyacinthe-Bagot has been abandoned, period.


J.-H.-Théogène Ricard: Because there is a Conservative member in that riding.



ST. PIE DE BAGOT, QUE.-CANCELLATION OP CONSTRUCTION

[Stage Direction]
On the orders of the day:
J.-H.-Théogène Ricard: Mr. Speaker, could the Minister of Justice take a few minutes, at the same time, to review the case of the St. Pie de Bagot penitentiary?


Jean-Paul Deschatelets: That matter has long been settled.


J.-H.-Théogène Ricard: Mr. Speaker, I wish to direct a question to the Minister of Public Works.
When I put a question to the Minister of Justice (Mr. Favreau) with respect to the St. Pie de Bagot penitentiary, some time ago, he suggested, by a nod, that the matter was settled, that this project was cancelled.
Would the Minister of Public Works tell us whether the plan for the construction of a penitentiary at St. Pie de Bagot has been cancelled, as suggested by the Minister of Justice?


Jean-Paul Deschatelets: Mr. Speaker, I am surprised that the hon. member for St. Hyacinthe-Bagot is asking that question again.
When the house studied the estimates of the Department of Justice last year, the minister said to the hon. member that the project for the building of a penitentiary at St. Pie de Bagot was definitely abandoned, in anticipation of the construction of a penitentiary in the north of Montreal.


J.-H.-Théogène Ricard: Mr. Speaker, as a supplementary question-



COMBINES


[Stage Direction]
On the orders of the day:
Mr. L. T. Pennell (Brant-Haldimand):: should like to direct a question to the Minister of Justice. Is the minister able to state if an investigation is about to be or is being conducted under the Combines Investigation Act as a result of the almost simultaneous action of four large cement manufacturing companies in Ontario refusing to accept bulk pick-up sales?


Guy Favreau: thank the hon. member for giving me notice of his question. The director of investigation and research under the Combines Investigation Act informs me he is fully aware of this situation and can be expected to take any action under the Combines Investigation Act that the statute may require. The general practice, however, and I think it is in the public interest that I should follow it, is that no information is given out as to whether a particular inquiry is in fact being pursued, unless and until a report is published.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, may I direct a question to the Minister of Finance. Was he aware of a financial crisis existing in the unemployment insurance fund on or before Thursday, March 26?


Mr. Martin (Essex East):: Yes; several years ago the fund went down very much.


Louis-Joseph Pigeon: The same old bunch.

Inquiries of the Ministry


Lester Bowles Pearson: You are very touchy about it.


John George Diefenbaker: Is the minister now under tutorship?


Walter Lockhart Gordon: Mr. Speaker, in the days when my colleague, the Secretary of State for External Affairs was interested in political questions I believe that on occasion he drew to the attention of members of the house the crisis that existed from time to time in the unemployment insurance fund.
In answer to my hon. friend's question, I was aware that the authority for the fund to borrow expired on March 31. Therefore provision was made in the supplementary estimates which were tabled on March 6 to continue this authority into the future.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, a few days ago I asked the Minister of National Health and Welfare a question relating to the hospitals operated under her department, as to whether they would suffer the same fate as veterans hospitals, and she indicated at that time that nothing was to be changed and no policy decision had been made about that matter.
I have here the Prince Rupert Daily News of March 23, wherein there is reference to a statement attributed to Mr. Speaker Murray of the legislature of British Columbia, to the effect that he has discussed the question of the Miller Bay Indian hospital in Prince Rupert with Hon. Eric Martin, minister of health for the province of British Columbia, and also to the effect that the days of the Miller Bay Indian hospital may be numbered; in other words that they may be drawing to a close. Would the minister care to comment on this?


Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: Mr. Speaker, I should be very grateful if my hon. friend would let me have a copy of that report so I could investigate and advise him later.



REQUEST FOR GRANT FOR 1966 QUEBEC FESTIVAL

[Stage Direction]
On the orders of the day:
Mr. Guy Marcoux (Quebec-Montmorency):: Mr. Speaker, I should like to put a question to the Minister of National Health and Welfare.

According to a morning paper, the minister is reported as having announced yesterday the payment of grants in the amount of $540,396 to 37 national sport associations.
Not having heard this announcement, but relying on this press report, I ask the minister whether her department has decided to allow the grant requested for the organization of the interprovincial games in the Quebec area.


Mr. Speaker:: It does seem to me this is a question for the order paper, unless the minister has the information at hand.



INDUSTRY


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Minister of Defence Production-a similar question was asked a few days ago-concerning the rather serious situation in Uranium City. What action will the government take in order to assure the continuance there of the institution that produces uranium, so that this city, which was built around uranium, will not suffer irretrievable loss?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, as the right hon. Leader of the Opposition will be aware, this is a matter which has been of concern to the government. In consultation with other interested parties we are endeavouring to formulate a policy which will ameliorate the undoubtedly difficult circumstances which are being experienced in Uranium City.


John George Diefenbaker: I thank the minister. Is he in a position to give any general indication of the plans in this regard? I realize the limitations under which he would operate to answer that question, but the people there would like more than the expression of the expectation of a hope.


Charles Mills (Bud) Drury: Not at the moment, Mr. Speaker.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. Could the minister at least assure the house that Uranium City will be given the same treatment that is being accorded the uranium industry in Elliot Lake, Ontario?


Charles Mills (Bud) Drury: 

TAXES IN OTHER COUNTRIES ON PRODUCTION MACHINERY

[Stage Direction]
On the orders of the day:
Mr. Fred F. Stenson (Peterborough):: I should like to address this question to the Minister of Finance. It is the same question I put to the Minister of Industry yesterday. I did not have an answer then, but since the Minister of Finance drew up the budget he may, I feel, have this answer. The question is, is there any country other than Canada which taxes production machinery?


Walter Lockhart Gordon: I do not know how many other countries there are, and in any event I am not familiar with the tax structures of all of them.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of Public Works. My question is further to one asked of the minister last Tuesday concerning the government's policy with regard to the construction of small post offices under the winter works program. Has government policy in this regard been changed recently, inasmuch as it has been indicated to me that these small post offices are only to be built in designated areas? If government policy has been changed, when was it changed, and how?


Jean-Paul Deschatelets: Mr. Speaker, I am surprised that a second question has been asked on the same subject, because the last time the hon. member who has asked this question informed us that he had received a letter from the Postmaster General covering his point. I think it is well known that the Postmaster General is the one who determines where there is a need for the construction of a post office, and in what community. When this is done the Department of Public Works is asked to proceed with the construction. If the hon. member has any further questions to ask on this subject I think he should await the return of the Postmaster General to throw some more light on the matter, if the hon. member is not satisfied with the letter he has received.


Wallace Bickford (Wally) Nesbitt: A supplementary question, Mr. Speaker. Inasmuch as the Postmaster General indicated to me that it was up to the Minister of Public Works to make the decision as to what was to be done and the policy to be
Inquiries of the Ministry changed, could the minister tell us whether the policy has been changed in this regard?


Jean-Paul Deschatelets: Mr. Speaker, I will take this supplementary question as notice and upon the return of the Postmaster General I will answer my hon. friend.



THREE RIVERS, QUE.    REQUEST FOR REPORT ON MAIL TRUCK ROBBERY

[Stage Direction]
On the orders of the day:
Mr. Clement Vincent (Nicolet-Yamaska):: Mr. Speaker, in the absence of the Postmaster General, I wish to direct a question to the Acting Postmaster General.
Is the minister able to make a statement to the house about the theft of a mail truck in Three Rivers? If so, is there any connection between the first, second and third thefts?


Jean-Paul Deschatelets: Mr. Speaker, all the newspapers reported yesterday that a second theft had been committed in a royal mail truck in the outskirts of Three Rivers. Full details were given and I can assure the house that the Post Office Department, in co-operation with the police authorities, is taking the necessary steps to deal with this situation and protect crown property.
However, until we get a complete police report we cannot say if there is any connection between those thefts.
I might add that it is not believed that a large sum of money was taken.


Raymond Langlois: Mr. Speaker, I should like to ask a supplementary question. Is it true that, on various occasions, requests were made to the Post Office Department by police authorities in the province of Quebec and in other provinces for better protection equipment, that is for armoured cars and an armed driver during the transportation of that money?


Jean-Paul Deschatelets: I am not perfectly aware of the policy which applies in such cases. However, I can assure the house that the Post Office Department is now taking steps to meet that situation and give adequate protection to government property.


Raymond Langlois: Mr. Speaker, just a supplementary question to enlighten the minister as to what I meant a while ago. The Montreal Gazette wrote yesterday that an official had stated:

Came from high office from Ottawa.

Was that order issued by the minister's office or simply by the commissioners' office?

Inquiries of the Ministry


Jean-Paul Deschatelets: Mr. Speaker, the Postmaster General will be back next week. I shall therefore let him consider this matter and he will advise the hon. member later.


Mr. R. A. Webb (Hasiings-Fronienac):: should like to direct a question to the Minister of Public Works. Inasmuch as there have been numerous serious mail robberies in the last two days, I wonder whether the government will consider the appointment of Senator Denis to assist the police in their investigations.


Some hon. Members:: Oh, oh.



PUBLIC WORKS


[Stage Direction]
On the orders of the day:
Mr. A. D. Alkenbrack (Prince Edward-Len-nox):: Mr. Speaker, my question is directed to the Minister of Public Works. Is Mr. Woolsey, the former Liberal candidate, consultant for the Department of Public Works in the riding of Prince Edward-Lennox and in control of the patronage there?


Mr. Speaker:: May I suggest that unless the minister wishes to answer, this question is certainly one for the order paper, assuming it is in order.


Jean-Paul Deschatelets: Because of the implication of this question, Mr. Speaker, would you allow me to answer it? The answer is no.


Almonte Douglas Alkenbrack: A supplementary question. Would the minister then care to comment on this item in the Picton Gazette of April 1, which is contrary to the statement just made by the minister-


Mr. Speaker:: Order. I do not think any comment is called for at this stage.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg Soulh Centre):: Mr. Speaker, I have a question for the Minister of National Defence in order to check the accuracy of an answer given to me some time ago. I base my question on an article by Mr. Blair Fraser in Maclean's magazine for April 4, page 2. He is writing about the removal by the military authorities
[Mr. Langlois.l
of arms from the cadet corps and he refers to the cadet commander of Ashbury College as follows:
He discovered that while Ashbury College on the Ontario side of the Ottawa river had been stripped of everything it possessed, the cadet corps across the river in Hull, Quebec, had not lost any equipment at all.
Some time ago I asked the minister a question which was numbered 203, and the return given to me was numbered 2423. My question was:
From which cadet corps have weapons and ammunition been removed by the Department of National Defence?
The answer was:
Weapons and ammunition were removed from all cadet corps in the province of Quebec.
My question is, is Mr. Blair Fraser accurate in his statement, or is the minister accurate in his statement?


Hon. Paul Hellyer (Minister of National Defence):: I think the answer to the question would depend on the date of the answer.



INQUIRY AS TO RECOVERY OF STOLEN ARMS AND AMMUNITION

[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, I should like to ask the Minister of National Defence a question which I put to him before. Has any recovery been made of the substantial quantity of arms and ammunition stolen from national defence armouries?


Paul Theodore Hellyer: Not in addition to those I have already mentioned, Mr. Speaker.



ACQUISITION OF NUCLEAR PROPELLED SUBMARINES

[Stage Direction]
On the orders of the day:
Marcel Lessard: Mr. Speaker, I should like to direct a question to the Minister of National Defence.
In his white paper the minister announced the intention of his department to buy three nuclear submarines. Will they also be equipped with nuclear Polaris rockets?


Paul Theodore Hellyer: No, Mr. Speaker.



POSSIBLE ATTEMPT TO FORM


[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: I have a question for the Minister of Justice with reference to the theft of arms

and ammunition and other military equipment from armouries. My question is this. Have the R.C.M.P. indicated to the minister any suspicion in their minds that an attempt is being made to form "a revolutionary force modelled on the Irish republican army with its own war room, chain of command, staff officers and guerrilla bands," as indicated in an article by Peter Newman in Maclean's magazine?


Guy Favreau: No,
Mr. Speaker.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: Mr. Speaker, may I direct a question to the Acting Minister of Fisheries. Is the acting minister in a position to reply to the question I asked yesterday regarding the proposed cruel method of catching seals by using hooks?


Hon. J. Watson MacNaughl (Acting Minister of Fisheries):: In reply to the hon. member for Trinity-Conception I may say that the subject of adequate regulation of the seal fishery is now under very careful review by the Department of Fisheries, and the possible use of the method outlined by the member yesterday will be included in that review.



FINANCE


[Stage Direction]
On the orders of the day:
Malcolm MacInnis: I have a question for the Minister of Finance. Has the government received any representations on the question of a merger between the Toronto-Dominion Bank and the Bank of Nova Scotia?


Walter Lockhart Gordon: The answer is still no, Mr. Speaker.



HIGHWAYS


[Stage Direction]
On the orders of the day:
Frank Howard: I should like to direct a question to the Minister of Northern Affairs and National Resources and ask him whether any negotiations or discussions are currently under way between himself or his department and Mr. Gaglardi of the province of British Columbia, or officials of that province, with respect to the Stewart-Cassiar road under the roads to resources program.
Inquiries of the Ministry


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: We have been approached by the government of British Columbia in the person of Mr. Kier-nan, who was minister of mines at that time. He asked us to find an additional $7,500,000, approximately, because at the time the roads to resources program was laid down the province of British Columbia chose to apply the entire $15 million to the construction of the Stewart-Cassiar road.
Mr. Kiernan has told us that this money is entirely used up but there are some 90 miles of the road still to be completed in the most difficult section, and his estimate is that this work will cost, in all, another $15 million. He has applied for $7,500,000. We told him that inasmuch as the agreement with respect to the roads to resources program has not been completed in all the provinces it would not be possible for us to make an extension under that program for a single province at this time.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Gérard Girouard: Mr. Speaker, may I direct a question to the Prime Minister?
At a meeting held during the week end, the general council of the union catholique des cultivateurs referred to a statement made in Winnipeg by the Minister of Agriculture (Mr. Hays), to the effect that the appointment of Mr. Maurice Sauve was the result of pressures exerted by members of parliament from the province of Quebec. Could the Prime Minister either deny or corroborate such a statement?


Lester Bowles Pearson: No, Mr. Speaker. The Minister of Agriculture has already denied that he made the statement.



CROWN ASSETS


[Stage Direction]
On the orders of the day:
Harold Edward Winch: I wish to direct a question to the Minister of Industry who, I believe, is responsible for the Crown Assets Disposal Corporation. In view of the fact that the R.C.A.F. plant at Kitsilano is now under control of the Crown Assets Disposal Corporation, will the minister

Supply-Secretary of State tell us what is the present situation in view of the urgent request made by the city of Vancouver in this respect?


Charles Mills (Bud) Drury: The present situation is that the Crown Assets Disposal Corporation is exploring the most advantageous way to Canada of disposing of this property, and in this connection discussions have been held with the city of Vancouver.


Harold Edward Winch: Will the minister assure us that no disposal will be made until he has received the presentation of the city of Vancouver with regard to this matter?


Charles Mills (Bud) Drury: There have already been discussions with the city of Vancouver.

The house in committee of supply, Mr. La-moureux in the chair.
DEPARTMENT OF THE SECRETARY OF STATE Civil service commissionle. Salaries and contingencies of the commission, $131,000.


Clément Vincent: Mr. Chairman, before we pass the supplementary estimate now before us, I would like to make a few remarks concerning the civil service commission.
At this time, French speaking citizens in Canada sometimes wonder about the civil service commission, and the relations which French Canadians may have as federal employees.
I do not consider myself competent to delve very deeply into existing conditions in Ottawa as far as French speaking citizens are concerned. But today I would like to quote as witness a prominent Canadian politician who certainly occupies one of the most important posts in the federal capital. I refer to the Minister of Justice (Mr. Favreau) who, as we know, has been deputy minister of justice for several years and who is obviously familiar with the attitude of the civil service commission in respect of French speaking civil servants.
The Minister of Justice recently made a speech in Toronto. I would like to read out a few extracts, and then ask the President of the Privy Council (Mr. Mcllraith) four questions with regard to vote le now before us.
The experience gained by the Minister of Justice would clearly warrant that his statement is based on some true facts. According to the Ottawa Journal of March 5, 1964, the minister said this:

Favreau blames civil service for Quebec's "quiet revolution''.

The beginning of the article reads as follows:

Nothing has caused such "strong and deep-rooted frustration in Quebec" than the position of French Canadians in the federal civil service, especially in the departmental headquarters establishments in the national capital.
The "brushing aside" of French in Ottawa has "fed the so-called quiet revolution" in Quebec.

And the article continues as follows:

These and other statements bearing on bilingualism in the civil service were contained in a speech today at the Empire club in Toronto by justice minister Favreau. He spoke of the feeling now existing among French Canadians as "serious and dangerous", and put the blame largely on the language situation in the civil service.

Again, the article continues:

Mr. Favreau's was the strongest attack yet made by any member of the cabinet against what he charged had been years of discrimination against French Canadians in government service.

Mr. Chairman, that is the reason why- [Text]


James Roy Tucker: Will the hon. member permit a question? Will he state the source or writer of the article?


Louis-Joseph Pigeon: All the newspapers across the country.


Clément Vincent: The Ottawa Journal, March 5, 1964, on the front page.

That is why the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) asked the President of the Privy Council if he was in agreement with the statements made by the Minister of Justice.
Everybody knows that in Quebec, and more particularly during election campaigns, we heard a great deal of talk about the relations between French Canadians and English Canadians and the part which French Canadians are playing in federal politics. As a matter of fact, those who are sitting on the government benches today are always singing the same refrain during election campaigns, but when they come to Ottawa they keep mum. They even remained silent during 22 years and on account of their attitude, we are wondering what happened to those fine speeches made during election campaigns.

Mr. Chairman, I now wish to point out certain remarks made by the Secretary ot State (Mr. Lamontagne) who, according to precedence, ranks tenth in the cabinet and whose position is higher than that of the Minister of Justice who only ranks nineteenth. And as reported on page 6 of the appendix to Hansard for June 25, 1963, the Secretary of State said:
To that end, various projects are now being considered such as a review of the recruiting and examination system, special courses within the various departments, a premium for bilinguism, the creation of a bilingual institute of public administration, where all university graduates might train before taking up their posts in the federal service.
We shall start with that over-all program next September. From now on, we want all civil servants truly to understand the bilingual and fundamentally bicultural character of Canada. More particularly, we want French Canadians to be able to serve their country in their own language and not to have to forget it when going to work.
Mr. Chairman, before those estimates are passed and following the statement made outside the house by the Minister of Justice, who surely has some experience in the federal civil service, and the one made by the Secretary of State in a speech delivered on June 25 in this house, I should like to put four questions to the President of the Privy Council. I would like him to answer these four questions before we pass his estimates.


At present, what progress has been made in the review of recruiting methods and examination systems? When I say this, I refer to certain statements.: Question No. 2-Where does the project with regard to special courses within various departments stand?

Question No. 3-Where does the project of premiums for bilingual civil servants stand?

Question No. 4-What progress has been made with respect to the creation of a bilingual institute of public administration where university graduates could train before taking up their duties in the civil service?
I would like, if it is at all possible, to have the President of the Privy Council answer these four questions.


Guy Favreau: Mr. Chairman, the speech I made in Toronto, last March 5, has since been reported in several different ways by some hon. members.
I must say that had I not been sure of the validity of the speech I was going to make before the Canadian Imperial Club, in Toronto, I could only be proud of it now in view of the approval it has received.
It is obvious that this speech was not about a review of the civil service, on March 5, 1964. because the situation within the civil
Supply-Secretary of State service was not the subject matter of my remarks that day. I simply tried, as I had been requested to do, to point out some guide lines; I said that they were not all the reasons for what is brewing and what is happening now in the province of Quebec.
I said also that if the French language had been disregarded in business as well as in the civil service mainly through neglect on the part of French speaking Canadians in the field of education as well as through some deficiencies in the school system in Quebec, which are being corrected wonderfully today, the blame lay also to a great extent with the indifference of English speaking Canadians. I added that, in the past, the civil service had been one of the areas where the results of those deficiencies among French speaking Canadians and that indifference on the part of English speaking Canadians had been most noticeable.
I also added that, fortunately, thanks to measures now implemented and arrangements proposed to correct the situation, there is a substantial improvement in the bilingual situation in the civil service and there is reason to have great hopes in that field.
Mr. Chairman, as far as the past is concerned, what I have said is correct but my words are distorted-unconsciously or involuntarily, I am prepared to admit it-when people say that my speech dealt with the present situation in the civil service. All I uttered was a word of encouragement for what is happening now or what will happen in the future.
What happened is this. In the Ottawa Journal following, no doubt, a phone call and with no ill intent on the part of the news reporter, three paragraphs of my speech were singled out. The newspaper realized that those three paragraphs were out of context, and on the following Saturday, that part of the text mentioning the civil service was reproduced in two full columns on the editorial page. To my great satisfaction, that same newspaper, eight days ago I believe, published an editorial of which I am proud and which was based on a speech I had made in Montreal and in Toronto. It said:

If the Minister of Justice had less courage or had been a lesser man, he would have pronounced his Toronto speech in Montreal and his Montreal speech in Toronto.

For that reason, Mr. Chairman, I have nothing to withdraw from what I said but I simply wish to add this. There are at present, within the civil service, very encouraging signs concerning bilingualism, and I think that we only have to take an inventory of this
1754	HOUSE OF
Supply-Secretary of State government's policy and of the steps now being taken, or under discussion, to know that we can hope for a full measure of justice, within the civil service, as regards the application and the use of the two official languages in this country. As I said, that same measure of justice will be applied to those, among the unilingual officials who were not completely prepared, in the past, to accept their position and for whom, the fact that they are not French speaking will not be an obstacle to promotion or a matter of discrimination.


Clément Vincent: Mr. Chairman, I thank the Minister of Justice for having thrown some light on the speeches he made in Montreal and Toronto.
The minister mentioned the education system in the province of Quebec. I agree with him that it is being improved, but one must recognize that it is under that system that the minister himself was educated and became an outstanding lawyer. Thus, it certainly contributed, in the past, to the education of distinguished French Canadians.
One should not blame the whole system of education which prevailed in the province of Quebec before 1960, inasmuch as the Minister of Justice himself, like many others in the house, received his education under this particular system, which prevailed in the province of Quebec before this famous peaceful revolution we have been witnessing since 1960.
Now, Mr. Chairman, were it possible, I would be happy if the Minister of Justice, while he is in the mood, would answer the four questions I just had passed onto him on a sheet of paper.
Could the Minister of Justice answer the four questions I am directing to him?


Guy Favreau: Obviously, our system of com-municiations is not perfect-well, I had not seen them before the moment I rose-


Louis-Joseph Pigeon: Mr. Chairman-


The Chairman:: Does the minister wish to reply to these questions before I recognize another hon. member?


Mr. Mcllraiih:: I shall try to answer them to the best of my ability. The first question had to do with the language courses. There is a language course being conducted by the civil service commission, and in addition authority has been given to several of the departments to set up their own language courses. I think the program in that field would be found rather satisfactory, and if the hon. member wants more detail about it I would hope to arrange for him to get it, as I believe it would meet the kind of problem he has in mind. I am sorry to say I do not 

have a list of the departments here, but I know of three which have language courses, northern affairs, transport and agriculture.
As to the examination system, I am not able to answer that question because the commission is dealing with it and work is being done on its revision. I am unable to give a definitive answer on that.
With regard to the bilingual institute of public administration, the government has not had the opportunity to give final consideration to this matter, because the preparatory material is only now being obtained. Quite active work is being done on the part of the staff in getting the kind of material that needs to be assembled in order to have the policy considered and a decision taken.
In the discussion last night I had understood the hon. member for Joliette-L'Assomp-tion-Montcalm to be speaking about pay bonuses, but on reading the French text of his remarks I now find he used wider language than that, and that there was some reference made to incentives. That question is part of the work being done by a section of the staff group, and where we appeared to be a little at cross purposes last night was in dealing with the method of taking care of the situation, and as to whether this method would be by way of an additional qualification for a job. Pay, of course, is based on the requirements for the job, and in a great number of jobs bilingualism will be a requirement.
As I say, I had understood the hon. member to be speaking last night about a pay bonus, but now I know he used wider terminology and was dealing with something more in the nature of an incentive. This subject is of the utmost importance. Work is proceeding on assembling the material and in taking the steps as rapidly as they can be taken to deal with the situation and to bring about a more satisfactory solution, in the sense that any Canadian coming to Ottawa to do business with the government will be able to converse in his mother language with the officials he might reasonably expect to meet.


Clément Vincent: I have here the words used by the former secretary of state, which received wide publicity in my province. He used the words "a premium for bilingualism."


George James McIlraith: What is the reference?


Clément Vincent: It will be found at page 1548 of Hansard for June 25, 1963.


George James McIlraith: Would you read the sentence?


Clément Vincent: It reads:
To that end, various projects are now being considered such as a review of the recruiting and examination system, special courses within the

various departments, a premium for bilingualism, the creation of a bilingual institute of public administration-


George James McIlraith: That is a very accurate statement of the situation, and these things have been moving forward very rapidly. Some of them, like the language courses, are well under way. On others, such as the institute of public administration, the policy decision has not yet been taken because the preparatory work is still being done and has not been completed to the point where a final decision can be taken. That sentence which the hon. member has read is a very accurate statement of the situation, and I would point out that a great deal has been done in the interval. The subject is one of very great interest and concern, and I would hope-


Louis-Joseph Pigeon: You play with us, I think. Answer yes or no and we will stop the discussion. We asked you a direct question.


George James McIlraith: I would hope that when the minister to whom the civil service commission reports speaks on his general estimates we would have a thorough discussion on this matter, and incidentally the general estimates have already been tabled. Much as I would like to answer yes or no to please my hon. friend, these questions are not the kind that can be answered yes or no. I would like to please him but it would serve no useful purpose to attempt to answer in those terms.


Raymond Langlois: Mr. Chairman, I listened carefully a while ago to the Minister of Justice and I must congratulate him for the courage he showed when he made his two speeches, one in Montreal and the other in Toronto. Now, if more speeches like that had been made these past few years, the situation would be less critical today as regards the education system which, at least in the opinion of some previous speakers, would only date back, under its present form in the province of Quebec, to 1960.
Let me tell you that we, in the province of Quebec, have been striving for a long time to achieve as high a degree of bilingualism as we could wish for and that the system of education was changed, not in 1960, but long before that, for, when I started teaching in 1956, the new system had been in force for eight years. Therefore, it is not the business of the provincial Liberal party of 1960, and this is nothing new, because the province of Quebec was already aware that a change was called for. There were tentative efforts, upheavals, changes, and changes are still being made, but at least we had the courage to 20220-111
Supply-Secretary of State change and to depart somewhat from our traditions, by learning a language and discarding the rest.
If we make the effort to learn another language, it is because we believe it might prove useful to us, otherwise we would not take the trouble. The Canadian people is fully aware of this and I think it is time parliament also understood that as long as a second language is learned only for learning's sake, there shall never be any true bilingualism in the federal civil service. The person who speaks both languages fluently has not only an additional asset, but if he is working in the civil service, he gives double satisfaction. When it is recognized that a knowledge of both languages is an asset, that a bilingual person possesses supplementary or superior qualifications compared with the person who knows only one language, allowance being made for basic qualifications, only then will we have real bilingualism at the level of the civil service.
When an industry needs a technician or an engineer, it does not look for it in a school of medicine but in an institute of technology. If a student wants to specialize in commercial sciences, he attends the school of higher commercial studies and if he wants to be a doctor, he goes to the faculty of medicine.
Now, if the federal government wants efficient men in the civil service, if it wants a team of competent men, it should first have a plan and set up a school to teach and guide the civil service people, in order that they may become efficient men. Many promises were made in that respect during the last election campaign. If the Minister of Justice or the Secretary of State did not make those promises themselves, I heard them say in my riding that a bonus would be granted all bilingual civil servants.
Let the government keep its promises and do what it says it will do. If a person makes the effort required to learn a second language in order to be of service to the federal government, the person should be paid for that service. That should in no way amount to discrimination against other people, for anyone remains free to learn a second language, be it French or English.
I feel it is time we begin to appreciate at its proper value the knowledge of a person who is perfectly bilingual and serves his country in its two official languages.
It is up to the federal government to recognize that advantage. Much ground has already been covered. We are not blaming English speaking Canada, but we rather blame the Quebec representatives within the federal government who, for years and

Supply-Secretary of State years, were rather unconcerned and when I say that, the Minister of Justice knows very well what I am trying to imply.
There was a deficiency on the part of members from Quebec. Of course, there were some who fought for the French fact. Henri Bourassa brought up the matter often enough to enable the Liberal and Conservative governments to understand the situation. Now, it is up to this government to take a decision because if the province of Quebec is changing its education system to meet today's needs, it behooves the federal government to take the necessary steps to keep pace with the facts.
And only then may we say that we have qualified civil servants because they will have studied to become fluent in both languages.
If I wished to learn mathematics, I would attend a school where mathematics are taught. The federal government should establish a school of languages in order to provide this service to civil servants. It should improve the knowledge of its employees in order that they may give the best possible service to the Canadian people.
I think that by giving a bonus to those who speak both languages, many federal civil servants would learn the other language and thus they would be in a position to render greater services not only to the civil service commission, but also to the whole Canadian population.


Louis-Joseph Pigeon: Mr. Chairman, the Minister of Justice made a long statement earlier which, more or less, amounts to an admission that he made a statement in Toronto to the effect that French Canadians in the civil service were frustrated.
On the other hand, I am rather astonished to find that the minister spoke of the Quebec education system as if nothing had been done in the past. By disparaging what had been done in the province of Quebec in the education field before 1960, I think he is running himself down. I most strongly protest against this new crop of people in the province of Quebec who speak ill of everything done prior to 1960; this is doing a disservice to the province of Quebec and national unity in general.
I want to advise the government of the province of Quebec to guard against such an attitude, for as far as education is concerned, the authorities in Quebec seem to want to give as much importance to the agnostics as to the Catholic or Protestant majority in Canada. I feel that the Quebec government is making an error and I have been offended when the minister tried to downgrade the Quebec system of education-
[Mr. Langlois.l


Lucien Lamoureux: Order. May I remind the hon. member that his remarks must be related to the item now before the house?


Louis-Joseph Pigeon: Mr. Chairman, I share your views, but I believe it would only have been fair if you had given the same kind of advice to the minister when he ventured on these grounds.
The Minister of Justice says that French Canadians are unfairly treated in the civil service, but what about his attitude during the many years he has been deputy minister of justice in Ottawa when his friends were in power? What suggestions, if any, did he make to the government at that time to improve the French Canadians' position in the federal public service?
He stated in Toronto recently that French Canadians were being frustrated. Is the minister condemning by the same fact the administration under which he was working as associate deputy minister of justice? The minister is admitting publicly before the nation that he failed in his duty and responsibilities by not making suitable recommendations at that time.
Not so long ago, that is on June 25, 1963, the Secretary of State said, as reported on page 1548 of Hansard, that the government would give a premium for bilingualism. Would the President of the Privy Council tell us if the Secretary of State was speaking for the government? Was he or was he not? That is all we want to know.
During the election campaign, throughout French Canada, Liberal candidates promised that a Liberal government would give a premium to bilingual employees.
Mr. Chairman, it is all well and good to make promises, but I want the minister to tell us if that promise will be kept soon. That is all we want to know in order to caution the government, for the future and especially during election campaigns, not to make promises, not to indulge in political blackmail, not to deceive the population, in short not to treat the people of Quebec like fools.
Mr. Chairman, as a matter of fact I have here a copy of the Liberal party propaganda during the last election campaign and here is what I find:
Bonus to bilingual federal civil servants.
Mr. Chairman, I ask the minister whether he is going to carry out that promise made by Liberal candidates and repeated here by the Secretary of State. I want to know whether this government is going to grant shortly a bonus to bilingual employees.


George James McIlraith: Mr. Chairman, if the reference to the remarks in Hansard of June, 1963 is the same as that given by the hon. member for Nicolet-Yamaska, it is a correct reference to the policy and position of this government. What was said in that speech is being carried out very rapidly and very well.


Louis-Joseph Pigeon: Mr. Chairman, I should like to ask the minister a final question. When is the government going to amend the Civil Service Act in order to grant a bonus to bilingual employees? I ask him to tell us when it is going to happen, since he claims to be in favour of the system and he supports the measure?


George James McIlraith: Mr. Chairman, I do not know whether there is much use in continuing this discussion in this way because I find myself in difficulty over the language used by the hon. member. As I understood it, the word used last night was "bonus". When I read the French text of Hansard I find the hon. gentleman used a wider phrase; he varied his words two or three times. If he means that these people will have greater financial benefits because of the added qualification which they use in their work, then they already receive this benefit. For instance, the whole basis of the pay of a translator is on his having a knowledge of both languages. Many positions are set up as bilingual positions and the added language qualification attracts a bonus which is added to the pay set for the position.
So if the hon. member is using the word "bonus" in that sense then they do get a bonus. If he is using the word "bonus" in this sense, that both bilingual and unilingual employees are engaged for similar or identical positions where only a unilingual qualification is required-and in some parts of the country there is no reasonable expectancy that the second language will be required for the efficient performance of duties-then I would think there would be no reason to pay a bonus to those employees who were bilingual and not to those employees who were unilingual. That is why I have been very careful to steer away from giving the hon. member the kind of dogmatic answer which he is seeking to extract from me.
I hope this explanation gives the hon. member the information he requires. I recognize the importance of the subject, but would hope that discussion of it could more adequately be continued when the main estimates are before the house, when the appropriate officials and the minister concerned will have the details available.
20220-lllj
Supply-Secretary of State
I think it is proper to remind the hon. member that these estimates are supple-mentaries and that the practice of the house for as long as I can remember-and I have been in it for quite a while-has always been that either the Minister of Finance or some other minister puts all the supplementary estimates through the committee. It has not been usual to have detailed discussions of policy, particularly on items like this where what is being asked for is a very small amount by way of additional costs relating to some of the items in the main estimates, and where there is nothing new in the supplementary estimates themselves.
Although I have no wish to cut off any legitimate discussion, I would hope I have correctly stated the position taken by succeeding governments in this kind of situation, and that we might move on with our discussion.


Raymond Langlois: I do not agree with the minister when he said that a bilingual person doing the same job as another in a region where only one language was required should not be entitled to a higher salary. I consider that sheer discrimination. If one man is superior in his qualifications he has the right to superior remuneration from the government. That is the case all over the country and in business. Because a man is located in one spot and his salary is cut down-


George James McIlraith: Would the hon. member permit a question?


Raymond Langlois: - that is sheer discrimination on the part of the government.


George James McIlraith: It seems to me the hon.
member is mixing up two things here. He is talking about the qualifications of a given employee on the one hand, and then asking for higher pay for an identical position on another. The situation which I posed in my remarks is quite a different situation from that put by the hon. member. What I dealt with was limited, as I tried to point out unsuccessfully, it seems, to the method of handling this problem. The method which seems to be the most talked about and which is the fairest is to pay an employee for the work he does. That is the responsible method. It may happen that a person who is bilingual may feel that he is not employed to the full extent of his qualifications if he is filling a position where bilingualism is not a requirement of the position. Such situations do arise, but they are not confined to the element of bilingualism. There exists a real distinction between the qualifications of a person and those required to adequately fill a position. That was the distinction I was trying to draw, and I think that is the true position.

Supply-Secretary of State


Raymond Langlois: I am sorry if I did not hear correctly, but-


Guy Favreau: Mr. Chairman, on a point of order, are we not getting a little technical in this discussion, and are we not performing precisely the type of function which can be performed more efficiently by the committees which are presently being set up-


George James McIlraith: They are set up.


Guy Favreau: -by the committees which have been set up? I suggest that in view of the somewhat technical type of discussion which is emerging we get back to the very nature of the supplementary estimates which are before the committee, and that the discussion be limited to those estimates.
It is true that as far as the civil service commission is concerned it so happens that the four items, the supplementary estimates which are being discussed in this committee, are listed under vote le, but that is just a coincidence. When we discuss supplementary estimates I submit that even if vote le is called for a department, it does not enable the discussion to be extended to all its branches.
Take, for instance, the Department of Fisheries. The first vote we have in these estimates is vote 30e. Then surely the committee could not have the pretext it has now -and I say it is only a pretext which is being used because, as I am pointing out, it so happens that under vote le the four supplementary items are presently listed. I suggest that no further discussion should take place which does not specifically concern the four items listed.


Raymond Langlois: On a point of order, there is a subsection here under item le which I think has something to do with recruiting. If the minister is afraid of going into too many technicalities, why did he talk about this subject during the last election campaign? He talked about it then and now he does not want to face it. He says he does not want to talk about it.


Mr. Prud'homme:: He did not say that he would not do it.


Raymond Langlois: If he does not want to talk about it now, he should not have mentioned it one or two years ago. This is not a technical matter but rather one of principle.


George Albert Proud: That is not what he said. [Text]


Raymond Langlois: I do not know whether I heard correctly what was said a while ago, but it appeared to me the minister said there were two men in a given locality who needed


only one language; if one had two languages and the other had one they would both get the same recognition-


Lucien Lamoureux: Order, please. Is the hon. member still speaking on the point of order?


Raymond Langlois: Yes, because I think the point of order was brought up by the Minister of Justice after a statement had been made by his colleague. I should like the Minister of Justice to explain that statement. It was said these two men were both in the same locality. One was bilingual and one was not. How does the minister consider that one has a superior qualification to the other when in point of fact they both receive the same recognition as far as salary is concerned? Bonuses were mentioned a while ago. I do not know how the minister got all these words jumbled up. The bonus which members opposite were talking about during the last election campaign referred to language qualifications. In consideration of his additional language qualification a man would get a bonus or receive a higher salary. Is the minister willing to stick to that proposition which was put forward by members on his side of the house during the election campaign, on election platforms, or was it just another promise intended to get people to vote Liberal?


Louis-Joseph Pigeon: On the same point of order, Mr. Chairman, I think that the hon. member for Megantic is in order. It is his responsibility and his duty to raise the matter of a bonus for bilingual persons.
We are celebrating this year the centenary of responsible government-


Guy Favreau: Mr. Chairman, I rise on a point of order-


Louis-Joseph Pigeon: It is our duty to protect-


Guy Favreau: Mr. Chairman, regardless of the present historical situation in Canada, however close or remote this centenary might be, it does in no way affect the point of procedure involved, which is whether the present discussion is in order.


Louis-Joseph Pigeon: Mr. Chairman, on the same point of order. I am quite prepared to respect the opinion of the Minister of Justice, but that does not mean that he is infallible. As we have seen the beginning of this session, he made many mistakes-
We are celebrating this year the centennial of responsible government, and it is the responsibility of hon. members to get information and answers to their questions.


Jean-Paul Deschatelets: Not on a matter of government policy.


Louis-Joseph Pigeon: We simply wish to know this from the President of the Privy Council. Is he in favour, as it was advocated by the Secretary of State and his party in the province of Quebec during the last election campaign, of giving a bonus to bilingual employees, yes or no?
If he answers this, the debate will end.
Our forefathers fought for a responsible government, and we are entitled to obtain definite answers from the minister. Otherwise, he should not be surprised if we do not co-operate. We are celebrating the centenary of responsible government-


Some hon. Members:: Order.


Louis-Joseph Pigeon: That is what Lafontaine and Baldwin fought for and it is our responsibility to protect our rights.


Lucien Lamoureux: Does the hon. member for Megantic want to add something to the comments on the point of order?


Raymond Langlois: Yes. If you want to take it that way, it could be related to that. Mr. Chairman, let us take vote le, under publicity for recruiting purposes. Why call the argument out of order, when an amount of $65,000 is to be voted for that purpose? Was it not publicity for recruiting purposes when it was said during the last election that bilingual civil servants would get a bonus? That is what we were told during the last election, Mr. Chairman. Therefore, I ask the minister this question: Why was the matter mentioned if it was not publicity for recruiting purposes?
Today, we are told that the point is out of order. It is certainly in order, as you did write it into the estimates yourselves. That is just the point on which we speak. Has a bonus been awarded or mentioned?


Lucien Lamoureux: Order. It being one o'clock I do now leave the chair.


George James McIlraith: The committee is clearly interested in the subject, and I am wondering whether you might be disposed not to see the clock.


Frank Howard: I can see it quite clearly, Mr. Chairman.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Lucien Lamoureux: Order. House in committee of supply, civil service commission, vote No. le.
Supply-Defence Production [Translation]


Mr. Laprise:: Mr. Chairman, before item le is carried, I would have a brief comment to make.
I refer to a fact concerning the civil service commission to which I drew the attention of the responsible minister twice during the last session.
The civil service commission has advertised job opportunities in a town located in my constituency, the town of Chibougamau. On the posters the citizens of Chibougamau as well as those in the Lake St. John area are asked to submit application forms. I would point out here that Chibougamau is in the constituency of Chapleau and not in that of Lake St. John.
I would, therefore, ask that in future when the civil service holds competitions the citizens of the constituency of Chapleau be invited to apply.
Last year the responsible minister told me that he would deal with the matter. Other notices of competitions have appeared since, and there has been no change. Consequently, I would ask that in future, the citizens of Chapleau as well as those of the town of Chibougamau be asked to apply when there are civil service jobs available, especially in the Department of National Defence and the Post Office Department.


Lucien Lamoureux: Shall the item carry?


Louis-Joseph Pigeon: On division.


[Stage Direction]
Item agreed to.

[Stage Direction]
25e. To sustain technological capability in Canadian industry by supporting selected defence development programs, on terms and conditions approved by treasury board, $5,500,000.
Mr. Nowlan:: Perhaps the minister could give us an explanation of this item. I think I know what the explanation may be. I take it these are moneys which we are advancing from time to time to certain companies producing for national defence in order to assist in industrial development in this field. I wonder whether the minister would confirm the explanation of this item and also perhaps for a minute-


Gordon Minto Churchill: Thirty seconds.


George Clyde Nowlan: Someone says 30 seconds but we will say a minute-give us the results that are accruing from these expenditures.


Charles Mills (Bud) Drury: Mr. Chairman, I take it the hon. member has reference to vote 25e. The main estimates contained an appropriation of $10 million to sustain technological capability in Canadian industry by supporting selected

Supply-Defence Production defence development programs. Under this item a forecast is made of development programs which have a likelihood of success and a forecast is made of the amount of success which might be achieved during the year. From time to time Canada is fortunate in having success achieved more rapidly than we had hoped, in which case a higher expenditure than originally forecast is needed.
This supplementary estimate of $5 million does represent a measure of the successful acceleration of our development programs. If it would help the hon. member and the committee I might mention some of these by way of example. One of the larger ones has been the Caribou II aircraft, a project undertaken for the development of a short range take-off and landing aircraft with a military application, in which a great deal of interest has already been shown by the United States army. Hon. members will recollect that for a while it looked as if the United States would not continue its interest in this aircraft, but I am glad to say that the interest has been resumed.
Another one is the development, in conjunction with some of our NATO partners in Europe, notably the United Kingdom, of a drone known as the CL-89 being developed at Canadair for battlefield surveillance. This is coming ahead very satisfactorily indeed. Another example would be the integrated guidance system being developed in Ottawa by Computing Devices Limited.
I could go on and cite other examples which I would suggest are testimony to the ingenuity, perseverance and technological capability of Canadian industry in developing these new devices for the armed forces.


John George Diefenbaker: Mr. Chairman, there is only one matter I want to deal with particularly. In his concluding words the minister paid a compliment to the technological development of Canada after having referred to the interest of the United States in the Caribou II. I am wondering why it was that the Royal Canadian Air Force decided to buy Hercules transport aircraft in the United States to the number of 16, as I recall, rather than doing something to make this $55 million order available to Canadian industry. Is there not an aircraft industry in the city of Montreal that could have provided transports sufficient for Canada's purposes? Certainly a boost of $55 million in orders would have given a tremendous impetus to the aircraft industry of this country.


Charles Mills (Bud) Drury: Mr. Chairman, there is no question but that the aircraft industry in Montreal is fully capable of producing 16 aircraft of the kind required by the Royal Canadian Air Force for transport purposes. However, the

cost of the taxpayers of Canada would have been very substantial indeed in comparison with the cost of buying them from an existing operating assembly line in Georgia. Consequently the decision was taken to purchase them at a substantially lower cost in the United States.
While on the face of it this may seem to represent a lot of job opportunities in the aircraft plant in Montreal, I recall to the house that the defence production sharing program is designed to take care of situations precisely such as this whereby, as a counterpart to Canada being free to purchase its limited requirements of any given item of equipment in the United States, the United States for its part will make purchases from Canada of a corresponding value of military equipment from Canadian manufacturing plants. Canadair in Montreal, to which reference has been made, has been favoured in this production sharing program to a very large degree, particularly in respect of the CF-104 interceptor aircraft, amongst other things.
It may interest the right hon. gentleman to know that at the moment, with this production sharing arrangement of a two way flow of the procurement of military equipment, the balance in favour of Canada is something of the order of $70 million. While it is true that the recent order for Hercules aircraft does represent a substantial purchase in the United States, we will see that this is adequately compensated for by purchases by the United States or on behalf of the United States armed forces from Canadian manufacturers.


John George Diefenbaker: I realize, as the minister has said, that defence production sharing is a two way street, but when we were in office we greatly increased the favourable amount of expenditure for Canada. However, I would have thought that on a matter such as this Canada could very well have filled this order and that the fullest consideration should have been given to the merits of the matter.
The minister says that the cost of these aircraft was much lower than would have been the case if similar transport aircraft had been purchased from Canadair. Having said that, I suggest he allow the house and the country to know what was the amount per unit which was asked for a Canadian transport aircraft by Canadian industry. We found ourselves in that position on occasion when military requirements produced in Canada would have cost so much more than almost equally good equipment which could be purchased elsewhere that, in the general picture of defence sharing, orders were given abroad.
However, I should like to hear the actual story from the minister, who is fully conversant with this matter. It is only in the

last few days that I have received the strongest protests from Montreal in this regard. Indeed these protests have come from persons who are quite close to the minister and who found it difficult to understand why an order such as this went elsewhere, when transports could have been provided in Montreal that would have assured the preservation and expansion of the aircraft industry. There is nothing more difficult today than the maintenance of the aircraft industry, as the minister knows. In the United States, I speak from recollection only, I believe there are only three major aircraft concerns left today. The others have had to close down or join the existing ones. Canadian aircraft produced by this country have had a superb performance record and represented the highest of our Canadian technology. I should like the minister to give us the facts rather than the general conclusions that he has given us.


Charles Mills (Bud) Drury: In respect of the particular aircraft in question, the Hercules aircraft, the difference in cost between having the 16 purchased in Montreal rather than purchased at the Lockheed Corporation in the United States, would have been about $2 million per aircraft or a total of $32 million extra. To pursue this particular line of endeavour at exorbitant cost, to engage in uneconomic operations, to fly in the face of our argument in favour of the rationalization of defence industry with the United States, would possibly have led to a serious breach in the understanding we hope will be reached whereby Canadair will be producing, as part of the production sharing arrangements, components and substantial parts of the TFX aircraft which, as the hon. gentleman knows, is going to be ordered in substantial numbers by the United States air force.
If the position of the Canadian government should be that we are going to produce all our own military equipment, even on an uneconomic basis, then the willingness of the United States to have us share in the production of their military equipment, notably the TFX, I think would be seriously prejudiced. I am quite sure the right hon. gentleman would not wish this to happen. I have given an indication of the magnitude of the uneconomic nature of this operation. In my opinion it would not make sense for us to engage in an uneconomic operation when we can secure the aircraft at a lower cost and at the same time have the equivalent U.S. expenditures made in Canada.


John George Diefenbaker: There is just one more question in connection with the figure given by the minister, the $2 million more per unit.
Supply-Defence Production Was the minister referring to Caribou II aircraft in that price, or was he referring to the Hercules?


Charles Mills (Bud) Drury: The Hercules.


John George Diefenbaker: Would not the Caribou II have been sufficient for the Canadian air force, and what would have been the cost of them?


Charles Mills (Bud) Drury: No; the Caribou aircraft is completely different and designed for a completely different purpose. What the Royal Canadian Air Force is seeking and needs is a long range, high speed, large capacity transport aircraft. These are not the characteristics of the Caribou II. The outstanding feature of it is the short take-off and landing, but a limited range and, by comparison with the Hercules, a very limited capacity.


Louis-Joseph Pigeon: Mr. Chairman, I only have one question to ask the Minister of Industry and Defence Production. Following the decision taken by Trans-Canada Air Lines to buy American aircraft, can the minister tell the house what will be the value in dollars and cents of the parts which will be manufactured in Canadian aircraft factories, such as Canadair, for instance?


Charles Mills (Bud) Drury: If the hon. member does not mind, I shall reply in English. The arrangements between Douglas Aircraft in the United States and de Havilland in Toronto with respect to the DC-9 aircraft, which is the one under discussion, provide that total purchases from de Havilland Aircraft in Canada may well exceed the total cost of the aircraft being bought by Air Canada for its purposes. If the DC-9 goes as well as it is hoped, it is likely the total expenditures by Douglas at de Havilland will be greater than the total purchase price paid by Air Canada for the aircraft required.


Louis-Joseph Pigeon: A supplementary question, Mr. Chairman. Can the minister tell the house what amount of money will be spent at Canadair, should certain parts be made there? [Text]


Charles Mills (Bud) Drury: Well, Mr. Chairman, there are some subcontracts from de Havilland to Canadair with respect to the DC-9, but I am sorry I do not know precisely what they are.


J.-H.-Théogène Ricard: Could the minister give us any definite estimate as to what amount of money we can expect from the United States? It is all very well for him to say it may exceed the purchase amount involved, but this will

Supply-Defence Production not satisfy the people in Montreal working for Canadair or for the other aircraft companies. We want something definite. I think it would not be too much trouble for him to give these figures, and we shall be lenient with respect to a differential of 5 or 10 per cent.


Charles Mills (Bud) Drury: Unfortunately the hon. gentleman is asking me to forecast the future sales throughout the world of the DC-9. I think he will recognize it would be imprudent for me to engage in that kind of crystal ball gazing.


[Stage Direction]
Item agreed to.
35e. Canadian Arsenals Limited-administration and operation, $501,100.
Louis-Joseph Pigeon: Mr. Chairman, the people of St. Paul l'Ermite are now very worried about the fate of the Canadian Arsenals plant, where a number of employees have been laid off.
Can the minister tell the house whether he anticipates an increase in the work force in that plant at a future date, following possible contracts obtained in the United States or in Canada?
I also want to ask the minister whether there is a possibility of reviewing the agreements between the municipality of St. Paul 1'Ermite and the federal government in respect of the grants the latter is paying the municipality in lieu of school and municipal taxes. The responsibilities of the municipality of St. Paul l'Ermite have been increasing constantly, and it would be important to review the arrangement and raise the federal grants in lieu of school and municipal taxes.
I would be grateful to the minister if he would answer the first part of my question and tell me whether he intends trying to obtain rather big contracts large enough so that the work force would be increased, instead of being reduced as it is now the case.


Charles Mills (Bud) Drury: In response to the first part of the question, the only possible client of Canadian Arsenals is the Department of National Defence. The United States is quite firm that it will not contemplate placing orders with Canadian Arsenals when its own arsenals, like ours, are being under used and under employed.
I would be misleading the hon. member if I were to suggest that it appears from the white paper that the position of Canadian Arsenals in the near future will substantially increase its work, particularly the kind carried out at St. Paul l'Ermite, which has reference to filling of fixed round ammunition. It is unlikely this is going to increase substantially in the future. In response to the


second part of the question I shall be glad to look into the matter of the grant in lieu of taxes paid by Canadian Arsenals to the municipality.


Guy Marcoux: Mr. Chairman, just like in Quebec city, there is in my riding a plant of the Canadian Arsenals Company Limited, and I think that the same problems arise there as throughout the province, if not throughout the country.
Could the minister inform the house whether the supplementary estimates of the Canadian Arsenals, and more especially their administrative and operational costs, include the tenders called for the sale of those plants, since it is widely rumoured that the plants in Quebec city and Valcartier will be put up for sale, to be operated by private enterprise as manufacturers of ammunition and other commodities?
Would the minister tell us therefore whether the amount of $501,100 includes the disposal costs of the Quebec city and Valcartier plants? [Text]


Charles Mills (Bud) Drury: Mr. Chairman, there is a proposal to dispose of the plant at Valcartier but there is not at the moment a proposal to dispose of the plant at Louise basin in Quebec. As the hon. gentleman knows, the so-called citadel plant on Palace hill has now been closed down and in the not too distant future will be disposed of, but in so far as the hon. member has referred to the plant in Louise basin, this will be retained by Canadian Arsenals. Included in the supplementary estimates, vote 35e, are funds required for the administration of Canadian Arsenals, which include the operations to which I have made reference.


Mr. Peters:: Is there anything under this item for the storage and maintenance by Canadian Arsenals of the Bomarc missiles?


Charles Mills (Bud) Drury: The upkeep of the Bomarc missiles is the responsibility in situ of the K.C.A.F. and not of Canadian Arsenals.


William Arnold Peters: Do we keep a storage of spares in the Canadian Arsenals set up?


Charles Mills (Bud) Drury: No, Mr. Chairman.


[Stage Direction]
Item agreed to.

[Stage Direction]
le. Departmental administration, $61,900.
George Clyde Nowlan: Mr. Chairman, there are many things one can say about finance but I am not so sure this is the time to say them. Most of them have been said during the past week, and the minister is not here at the moment. We understand why he is not here because of the load he has been carrying, and it is perhaps just as well he was not in the house

to hear some of the kindly comments made about the way the affairs of the department were administered, which resulted in the situation we found ourselves in yesterday, and which I understand is not yet solved.
I am not sure whether there is an appropriations bill coming up this afternoon or not, but we were told yesterday one was imminent, or coming over the horizon, with respect to the unemployment insurance fund.
Under this vote we have professional and special services, and I would ask the parliamentary secretary what were the professional and special services amounting to $29,500 as outlined in this item?


Mr. Benson:: Professional services consisted of several items. The largest one of them was the firm of James R. Carmichael and Company, engaged to provide a technical review of the existing government workshops and other government services, and this cost $18,000. There was another item for P. Maury Mitchell, $2,500, and Professor Hood was engaged as a special consultant for $2,900, and so on.


Barry Mather: As we come to the end of our happy Easter holiday period, I have three good will suggestions to make to the Department of Finance, and if any one of them were adopted it would be in the interest and the welfare of the people of Canada. If I have one minute for each proposition, Mr. Chairman, I think I can confine myself to that time. In the first place I would urge the Department of Finance to take an early look at adopting the well established practice of the United States finance department in exempting from personal income tax the interest portion of mortgage payments on homes. Anybody who has bought or sold a house in Canada must be well acquainted with the fact that the interest portion of the payments for these homes-and most of them are bought on credit-are very heavy and continue for a very long time. The Americans stimulate the home building industry and encourage home building and the establishment of homesteads by this practice of exempting from income tax the interest portion of the mortgage payments. I urge that we consider this.
My second proposition is that Canada should cease to be one of the few remaining countries in the world which has no capital gains tax on stock market speculation profits. The point was urged a week or two ago by my colleague the hon. member for Nanaimo-Cowichan-The Islands, and I reiterate it, that we are losing many millions of dollars of revenue which could come to 20220-112
Supply-Finance
us legitimately. This revenue could be obtained were we to impose a capital gains tax on stock market speculation profits.
My third and final proposition is this. I think when we consider the fact that something like 40 cents out of every federal dollar goes to pay either the interest on our federal debt or goes to the amounts that we spend on defence, this is a situation which requires very serious study in depth by us all. We have only to consider the vast amounts of money involved in these two channels of expenditures, and I think if we put our heads together, perhaps in a special committee or in a special review, this would be well worth while; it would perhaps result in substantial savings to the taxpayers. It is a fact that we now spend, just to pay for our federal borrowings, $2 million every day. It is another fact that we spend on defence purposes, when the value of some of these defence purposes is very dubious, $2 million every 12 hours. These are immense expenditures, and if we do not come to grips with this problem and reduce these expenditures I fail to see how we can ever hope to make substantial progress in easing the burden on our taxpayers. These are my three propositions, Mr. Chairman, and I hope the Department of Finance will be good enough to take them into consideration.


Edgar John Benson: Mr. Chairman, I will be pleased to bring these matters to the attention of the Minister of Finance.


Louis-Joseph Pigeon: Mr. Chairman, I wish to ask the parliamentary secretary to the Minister of Finance (Mr. Benson) if all the provinces signed with the federal government an agreement to benefit from the municipal loans program. The minister must have received protests from some organizations about those loans about which some provinces are not too happy because they represent interference by the federal government in a provincial field of jurisdiction.
Would the minister tell us if it is true that the auditors of the Department of Finance in Ottawa go through the provinces' books and if he feels that this is interfering in a field which, normally, should come under provincial and not federal jurisdiction?


Edgar John Benson: Mr. Chairman, I think the hon. member is speaking to vote 38e, which we have not yet come to. I will attempt to get the information he has asked for and give it to him at that time. If it is not readily available, I will get it after the estimates are concluded and pass it on to him.


[Stage Direction]
Item agreed to.
[Stage Direction]
Supply-Finance
30e. Royal Canadian Mint-Administration, operation and maintenance, $128,600.
Harold Edward Winch: Mr. Chairman, I should like to ask a question on this item. With regard to the Royal Canadian Mint I have found there has been a fairly stabilized vote in the estimates in the years I have been in this house. May I ask just what is meant by this additional vote when it includes an item for "Professional and special services" and an amount of $65,000 for "Express on coin shipments", in view of the fact that in past years this has always been a regularized vote, very rarely requiring a supplementary vote? What is the reason for asking for this amount now?


Edgar John Benson: I am very pleased to answer this question, Mr. Chairman. With regard to the item for professional and special services, a survey of the mint facilities was carried out by a firm of management consultants, Stevenson and Kellogg Ltd. This is the reason for the additional vote.


Harold Edward Winch: Mr. Chairman, may I ask if the report of Stevenson and Kellogg will be filed in this house? This is an administration item, is it?


Edgar John Benson: It is administration.


Harold Edward Winch: Will the report on this survey be filed in the house?


Edgar John Benson: No, Mr. Chairman. The second question raised by the hon. member concerns the additional cost involved in express on coin shipments. It happened that the mint worked at almost full capacity this year, operating 21 hours a day, and an additional 75 million coins were turned out. The original estimate was based on 325 million coins and actually 400 million coins were turned out during the year. The additional express shipment costs arise from this, as do the additional costs for suppliers for coining and medal work. The extra repairs and upkeep of equipment costs arose because the mint was operating to such a high percentage of capacity.


Harold Edward Winch: Mr. Chairman, may I ask whether by any chance the item for supplies for coining and medal work has anything to do with any work for special medallions or coins for the Quebec centennial or the centennial of Canada? Is this included here at all?


Edgar John Benson: I understand it is not, Mr. Chairman. It is simply that there were many more coins turned out during the particular year than had been originally estimated. The original estimate of the number of coins was 325 million; the actual number turned out was 400 million. This is just the additional cost involved.


George Clyde Nowlan: Mr. Chairman, I think the parliamentary secretary might express to the governor of the mint, Mr. Parker, and his staff our appreciation for the tremendous load they have carried. This astronomical increase in the production of coins is shown here in the additional express costs, and this additional production was carried out by a mint which was built many, many years ago, is not streamlined and does not have the accommodation for this large production. I think we have in the mint a group of officers and men who deserve the commendation of this house.


Edgar John Benson: I will be pleased to pass that commendation on, Mr. Chairman.


William Arnold Peters: Mr. Chairman, in view of the fact that the mint is completely swamped at the present time, particularly in the production of silver dollars which are a commemorative item this year-it is said that the orders will be delayed by at least six months-can the parliamentary secretary indicate whether the Stevenson and Kellogg report into the administration of the mint made a recommendation for new accommodation, and how long is anticipated before this can be completed? Coming from a silver industry community, I would be very happy to see this type of increase continue for many years. The amount of silver being used has warranted an increase in the price of silver, and therefore we are very happy about the situation. But I believe the people in the mint are working under conditions which present an almost impossible task, and it looks as though this is not an extra load but is the normal increase that is taking place across the world in the production of coins. The government should have some plan in this regard and should be prepared to give us some outline of that plan for improving this situation, because it does not amount to an emergency but is a continuing and growing problem that will be with us for some time.


Edgar John Benson: Mr. Chairman, the survey carried out this year was in connection with plant and lay-out, for which this additional estimate is being put forward. Many of the recommendations of Stevenson and Kellogg are being carried out in the mint now with regard to the matter of plant and lay-out. The second stage, which is the designing of a new mint, a new operational unit which will have a much higher capacity than the existing mint, is under study at the present time.


William Arnold Peters: I realize the parliamentary secretary may not be able to tell us when, but it seems that no matter what they do with the present facility they will not be able to meet the demand or to keep up with it.


Edgar John Benson: I understand that we will have the report in about six months and that it will take from two to two and a half years to complete the new mint.


[Stage Direction]
Item agreed to.
38e. Administration, $68,000.
George Clyde Nowlan: Mr. Chairman, this is the first time that the word "salaries" is used in this department. I wonder whether the parliamentary secretary can tell us whether any salaries are outstanding as at the end of the month. I know there is another item of some $11 million which I think is of special significance, but there was a report current in the building today that some employees who were casual, rather than on salary, could not get paid because the money was not available. I wonder whether there is any substance to this report and whether the parliamentary secretary can deal with the matter now.


Edgar John Benson: Although this does not necessarily apply to this department-


George Clyde Nowlan: No, I realize that.


Edgar John Benson: -as I understand it all current salaries have been paid. However, the retroactive increases are being held up until the estimates are through the house. These are the retroactive increases only, not the regular salaries.


George Clyde Nowlan: Then all salaries due and current at the moment have been paid, and all wages as at this week end have also been paid?


Edgar John Benson: Yes, except for the retroactive portion of them.


Thomas Clement (Tommy) Douglas: Mr. Chairman, there is one matter which I have wanted to raise all week and I think this is the best item under which to raise it. I think all Canadians were pleased when the Prime Minister indicated to President Johnson that Canada would be quite willing to help in any way we could in providing assistance to the victims of the earthquake in Alaska. This points up the fact that in Canada we really have no machinery for dealing with civil disasters in our country. In the United States there is established machinery whereby at the request of the governor of a state an area is declared a disaster area, and legislative machinery immediately moves into operation to deal with the emergency situation and to help the victims of the particular disaster. I have long thought that we in Canada ought to have some type of machinery established to deal with civil disasters. I recall the Rimouski fire in Quebec, the Humber flood which affected a large number of people in the suburban areas of 20220-1121
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metropolitan Toronto, the Red river flood which inundated a good part of the city of Winnipeg and the city of St. Boniface, and other disasters of that type which we had to meet on an ad hoc basis.
It takes a certain amount of time to work out a plan of operation between federal, provincial and municipal authorities, as well as charitable organizations who are willing to help. The Canadian people in all these disasters have been most generous, and the delay has not been anyone's fault. The delay has been occasioned by the fact that we have no legal machinery which automatically moves into operation.
I want to use this item to suggest that the government give consideration to consulting with the provinces with a view to preparing civil disaster legislation, so that when any natural disaster takes place there will be an agreed division and apportionment of the costs between federal, provincial and municipal authorities, making use of the emergency measures organization, the army, the Red Cross, the health organizations, all of whom can move into a disaster area immediately, take up their posts, know what are their responsibilities, know what authority they have, and be able to co-ordinate the efforts of private organizations to deal with the situation.
I am not saying this in any spirit of criticism; we have just never faced up to the problem in this country. I think the government could make a good name for itself as well as serve a very useful function by giving consideration to legislation of this type, and I think the provinces would be very glad to co-operate.
The emergency measures organization, which I personally always thought had some value mainly in the field of civil disaster, has operated very well wherever there has been a situation which required their services. But, of course, they have no authority and can only assist the municipal and provincial authorities. They have no funds at their disposal; they have no legislative authority; and they are greatly hampered in doing the job which I think they could do. I think that what happened in the Alberni valley last week is a very good example of this. The minister of northern affairs, who was given responsibility by the federal government to attend to this matter, has in my opinion, been most assiduous in trying to help, and I think the government has responded so far as it has been able to do so.
Last Sunday I spent the entire day in the Alberni valley visiting Alberni and Port Alberni, and when I returned to the mainland I sent a telegram to the Prime Minister. I am very glad that the troops were moved

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in and I know that any further assistance, so far as permanent rehabilitation is concerned, depends on an appeal being received from the provincial government. I feel certain that if and when the provincial government makes such an appeal the government of Canada will respond, and I hope they will respond generously.
I want to remind the government that in the Rimouski fire and the Red river flood

I think also in the Humber flood but I am not quite sure about that-persons whose homes were damaged or destroyed were enabled to replace them completely. Even small businessmen were assisted in the restoration of their places of business. But in the Alberni valley the damage will be worse. In the other instances people could claim flood damage, but I am told by some of the insurance adjusters that in the case of the Alberni valley this damage is considered to be caused by a tidal wave and is not covered by the ordinary flood insurance provisions. I do not know whether or not that is correct, but if it is correct it means that these unfortunate people will not even get flood insurance. I think roughly 50 homes were completely demolished, and the estimate I received was that 300 homes were badly damaged. And when these people say "badly" they mean that homes have been moved off their foundations, sometimes toppled over on their ends, all furniture smashed, all bedding, clothing, dishes and utensils rendered useless; so these people are in very difficult circumstances.
It is true that in terms of degree it does not amount to anything like the disaster which has been experienced in Alaska; but for the several hundred families which are directly affected it is a disaster. I have been urging all week that in addition to what the federal government is prepared to do to rehabilitate these people at the request of the government of British Columbia, the government should in the meantime give some serious thought to making a substantial financial contribution to the Alberni valley disaster fund. I think this would do two things. First, it would enable the excellent committee which has been set up to know they have some money behind them, and would enable them to take care of the people who are homeless. The committee has as its honorary chairman the lieutenant governor of the province, and I believe wires have also been sent to the premier of the province and the leader of the opposition to act as honorary vice chairman. The mayors of two cities, Mayor Hammer of Port Alberni and Mayor Bishop of Alberni, have set up an excellent committee; they are getting good co-operation from the emergency measures organization and private organizations like the Salvation Army.

They have a very good welfare officer there from Vancouver and I think they have the machinery to do a very adequate job of looking after those who are homeless. When I left there on Sunday evening there were still 77 families without a roof over their heads. I think some 233 families had been placed with their neighbours and they had some temporary accommodation. But all these families will, when they get back into their homes, require not only the money needed for the rebuilding of those homes but, in addition, all the furniture, bedding and other things which are necessary to set up housekeeping.
I think it would be a tremendous boost to the morale of these people if the government were to announce it would put a very substantial sum into this disaster fund. This would not preclude the government from sitting down later with the government of British Columbia and working out some shared program for the cost of the replacement of these homes and places of business. However, in the meantime, while the British Columbia government is making its survey and getting ready to make its representation to Ottawa, I feel something should be done immediately.
I recognize the minister's difficulty. He cannot intervene in a provincial situation without the consent of the provincial government concerned. But I do not think it requires consent from anyone to make a contribution to a disaster fund. I believe in the old idea that help delayed is virtually help denied and that the sooner we do something, the better.
I would therefore make these two requests to the government: First, that thought be given to enacting some type of civil disaster legislation so that when we face situations of this kind in the future legal machinery will be available whereby the people affected can be cared for expeditiously and effectively. Second, I ask that in this particular instance the government give some thought to making a contribution to the Alberni valley disaster fund, so that these people on the committee may have some money to take care of the immediate situation, pending a report on what must be done to rehabilitate these communities.


Harold Edward Winch: May I add a few words to what has been said by my hon. friend from Burnaby-Coquitlam? I was a member of the British Columbia legislature at the time of the major flooding of the Fraser river-the most serious floods we have experienced in British Columbia and one of the greatest disasters ever to hit our province. The army and the militia responded to the emergency but the arrangements for taking care of those directly affected were such that, to the best

of my knowledge, it was 18 months or two years before responsibility was accepted and settlements were made.
Once again we have been faced by a major disaster. My reason for wishing to add a few words to what has been said by my hon. friend from Burnaby-Coquitlam is that at the time of the flood disaster I was not only a member of the British Columbia house but leader of the opposition, and at that time I made an appeal in the legislature for legislation of exactly the kind my hon. friend is asking for now, that is, the establishment by law of a disaster fund applicable anywhere where the need arises. Why is it that we have to wait year after year, almost decade after decade, before consideration is given to a recommendation of this kind?
I have an additional reason for speaking in support of the appeal which has just been made to the government, and that is the present reported state of the emergency fund. May I direct a question to the Minister of Northern Affairs and National Resources, who is in his place and who has been given authority in this situation, and ask him to tell us the extent of the emergency disaster fund at the present moment? I have recently left our reading room and according to what the Vancouver papers say it consists of $50,000 guaranteed by the premier of British Columbia, $50,000 from a power company and $12,000 from anonymous donations. Thus, according to these newspaper reports, $112,000 is the extent of the disaster fund. Again, if the papers are correct, the damage amounts to an estimated $5 million not including the damage done to industry itself. This situation is pretty darned rotten, when a disaster fund produced by anonymous contributions and two guarantees amounts to $100,000 in the face of a need of that magnitude. No fund, nothing, no direct contribution from the federal government.
I certainly hope the observations of my hon. friend will be heeded. First, a disaster fund should be created, available on call whenever it might be needed and, second, consideration should be given, now, to the immediate provision of necessities by the federal government to those who are in need.


John George Diefenbaker: I do not want to review what has already been said. I believe the emergency measures organization is fully effective in carrying out the ordinary duties which follow disasters whenever they may take place. Indeed I recall one or two occasions when the services of that organization were made available and it carried out its responsibilities in a manner which brought honour to all who were engaged. However that is not why I wish to speak.
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My observations have to do with the suggestion made by the hon. member for Burnaby-Coquitlam, that the government of Canada might well consider making a contribution to the disaster fund. I feel that action along this line would receive general support in the house and I rise merely to repeat what I have said on earlier occasions in the questions I have asked, namely that anything done by the government in this connection would receive the support of the opposition.
Certainly, the constitutional division of responsibility denies the making of any direct contribution to the areas which have been subject to disaster but I can see no difficulty about a contribution being made to alleviate the conditions under which many families find themselves in the Alberni area. The other day I stated the information I had was that the loss ran into tens of millions of dollars. The minister said the estimate of total damage he had was $5 million. I brought his estimate to the attention of the people who had communicated with me and they told me they thought it was far too low. I recognize, of course, that immediately after a catastrophe strikes the estimates sometimes far exceed what subsequent investigation actually determines the losses to be. Suffice it to say that I wanted to make clear that any assistance given to that' fund will receive our unqualified support.


Arthur Laing: Mr. Chairman, the first two hon. members who spoke decided to use this item to impress upon the government the advisability of setting up some organization of a permanent nature which would take over automatically in the case of disasters in the country. I think the idea has much to commend it, but I do want to say that in respect of the difficulty in the Alberni valley there has been the closest co-operation and instantaneous action on the part of E.M.O., the Canadian Red Cross, the civil defence organization and various other agencies.
I have attempted to keep in touch as closely as I could with Mayor Hammer and Mayor Bishop of the two cities. After my wire to Hon. W. D. Black on Monday, in which I asked him to furnish us with a copy of the assessment of loss, he advised me that they were holding a cabinet meeting on Thursday and he would get in touch with me immediately thereafter. Yesterday I talked to the two mayors again and asked if in their view it would seem reasonable for us to withhold any decision as to the making of a contribution to the fund until after this meeting of the British Columbia cabinet on Thursday.
I pointed out that if we were making a contribution to the repairing of the damage it

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would be several times the $50,000 that the province of British Columbia has contributed.
I believe that yesterday the provincial cabinet appointed a firm of insurance adjusters, E. A. Earl and Associates of Vancouver, who have been asked to make an assessment of the damage and to report to the government in one week, so that from the viewpoint of our participation the matter apparently has been delayed a week. I want to tell hon. members that if we are not called upon to participate in the ordinary course of events, with the province in the rehabilitation, I will have no hesitation in recommending to my colleagues that a very substantial contribution be made to the disaster fund, but I rather expect that we may be asked to participate in the rehabilitation of the community as a whole.


Thomas Clement (Tommy) Douglas: Mr. Chairman, I am not going to belabour this point or delay the committee, except to make one observation about the minister's remarks. I quite agree with what both he and the Leader of the Opposition have said about the emergency measures organization being most effective and most helpful. I had the privilege on Sunday afternoon of sitting in on a meeting chaired by the two mayors, which was attended by representatives of all organizations, including a representative from the emergency measures organization, and I quite agree that E.M.O. can serve a useful purpose in co-ordinating the efforts of the different groups.
This does not alter the fact that neither E.M.O. nor anyone else there had the authority to spend one red cent. A representative was there from the department of social welfare and he said, "I have no authority". The two mayors said, "We have no money". The Red Cross and the Salvation Army were the only two groups which said that they had received some authority from their national organizations and could spend up to X thousand dollars, neither of which amounts, or both together, would be enough to make a reasonable approach to the problem, let alone solve it.
I am not suggesting that legislation be brought down to set up a permanent organization. What I am suggesting is that we set up legislative authority so that when, on the request of a provincial premier, an area is declared a disaster area the federal government will be authorized to move in troops or engineers where necessary, and so that funds will automatically be available on some prearranged percentage basis. In this way the committee which is established including a federal representative, a provincial representative and a municipal representative will know that they can proceed immediately to
[Mr. Laing.l
buy clothing, bedding, and whatever equipment they need to take care of destitute people.
That is my real concern, and I point out that there is still nothing being done about it. When you go to visit a home, as I did, and see six or eight inches of mud on the floor, all the furniture overturned, the house sitting at an angle of 45 degrees and the man and woman who have been up all night trying to bail out the water and shovel out the mud while having no place to sleep, and not even being able to prepare a meal for themselves, then it is not enough to say that in a week or two the governments will get together and do something about it. What I am pleading for is the kind of machinery under which organizations can move into an area knowing that they can draw on the federal and provincial treasuries for some stipulated amount of money which would have to be accounted for, but which could be used immediately to set up outdoor kitchens and emergency shelter, so that people who are in dire circumstances will not be allowed to go in want.
We have had a number of disasters in Canada and it would be very interesting to trace how many funds were set up and where those funds are today. In the case of many of these funds there was a residue, after everything had been taken care of, and the money is lying somewhere; but before you can spend that money you have to find the trustees of the fund, which is not easy. If we had some sort of national organization set up and funds were raised, then anything that was left over after a particular disaster had been taken care of would revert to the fund and would be available for use in the next disaster. We would always have some money on hand and those charged with the responsibility of trying to render help in an emergency would know that those funds were available. This is what I am pleading for and I hope the government will give some thought to it.


[Stage Direction]
Item agreed to.
45e. Grants to municipalities in accordance with the Municipal Grants Act and regulations made thereunder, $2,800,000.
John George Diefenbaker: Mr. Chairman, would the parliamentary secretary give a statement setting out the number of loans that have been made under the Municipal Grants Act since the act came into effect?


Edgar John Benson: Mr. Chairman, I think the Leader of the Opposition is on a different item. Item 45e is the one now before the committee.


John George Diefenbaker: Well, perhaps the parliamentary secretary would answer that even at this stage. He has that information.


Edgar John Benson: Mr. Chairman, 1 will get that information and pass it on to the right hon. Leader of the Opposition.


John George Diefenbaker: Mr. Chairman, if the committee will allow me I should like to refer generally to the estimates before the committee. I understand that the other place has adjourned until this afternoon. They have been waiting in expectation for several days for the appropriation bill. There are certain items in connection with the estimates that I believe deserve immediate attention. There is, of course, the replenishment of the unemployment insurance fund. That has received the consideration of the committee. Then there are certain items dealing with salaries, and also an item dealing with veterans. All of these items are of an emergent nature if the information that has been given to the committee is to be regarded as entirely in keeping with the facts. That is particularly so with regard to the deficiency in the unemployment insurance fund. We want to cooperate in every way. There is obviously no possibility of the many more items that still remain being passed. I make the suggestion that if there is any emergency, an appropriation bill be brought in now covering the items I have mentioned that are of immediate necessity, and in so far as the official opposition is concerned we will forthwith pass the resolution and the three readings. Then, these particular items could receive the attention of the other place this afternoon and also receive royal assent.
If, however, there is no emergency and there is no need for those items being passed this week, then I am not pressing the government for action. Either there is an emergency in the fund which was not brought to our attention except by the indirectest of indirection, until Wednesday, or there is no emergency. I am not going into that now. The Minister of Labour is in more than affable good humour at the moment as compared with the last couple of days. Since he is in that happy mood, perhaps this indicates there is no emergency such as that which existed two or three days ago. If an emergency still exists I suggest that the committee, in a desire to co-operate, may rise, report progress and then the appropriate resolution could be introduced covering those three items. The bill could be passed because we have discussed these matters fully. In that way, everyone would be satisfied that a good week's work had been completed.
My colleague suggests that perhaps all the items that have been passed so far could be
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included in this bill. Then, perhaps the Minister of Labour would continue to be as congenial as he is at the moment. I make that suggestion in a desire to co-operate to the fullest degree.


Stanley Howard Knowles: I wonder if I may say a word about the suggestion made by the Leader of the Opposition. As the committee will recall, last Wednesday evening when we were discussing the item relating to the unemployment insurance fund, a discussion which we had as a result of our proposal, the hon. member for Skeena made a particular request that whatever else happened that item might be put into final legislative form this week. I believe the Minister of Justice or the Minister of Labour gave an assurance that this would be done. Therefore, Mr. Chairman, the suggestion that is now being made by the Leader of the Opposition is in line with the suggestion made by us in this party two or three days ago. We would support the proposition that a bill be brought in incorporating the items that have thus far been passed in committee of supply, or as far as the government can go, and that such a bill be passed this afternoon.


George James McIlraith: We had a bill printed including all the items that were passed up to last night, because those were the latest printing arrangements I was able to make. I had in mind, depending on what happened as these items went along this afternoon, asking leave of the committee to introduce such a bill.
Now, this new suggestion I would want to discuss-


John George Diefenbaker: I am not pressing that; bring the bill in as it is.


George James McIlraith: I would want to be left free to discuss the new suggestion with the law officers of parliament, because I am not sure it is possible to have a bill ready containing items that are not yet passed, including the items named by the Leader of the Opposition.


John George Diefenbaker: If the minister would simply call those items, I think we would pass them automatically. They are the ones for the veterans, for salaries, and so on. The items for veterans, and so on, would have to be passed. In other words, we cannot have them included without passing them.


George James McIlraith: I realize that, but I am afraid I had not succeeded in completing my remarks. I am not sure that it is possible to have these items included, for technical reasons only. I should like to leave part of the suggestion open at the moment until I have had an opportunity of consulting with the law officers of the crown, to see if it is

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possible to have the items which we would pass in the next few minutes included in the bill.
I had proposed introducing a bill at four o'clock, if that meets with the wishes of the committee. This bill would include all the items that have been passed up to that time. If it is possible, I am very agreeable, of course, to including the items mentioned by the Leader of the Opposition.
Now as to the other items I am not able to say with certainty that the failure to pass them will not hold up certain payments. I am sure the former minister of finance will understand that. However, if the committee will continue dealing with the items I will see what, if any, items we can add to those which were passed prior to last night and are in the bill.


George Clyde Nowlan: I take it the $11 million item, which we are almost up to now, could be passed. I take it that is the retroactive salary increases?


Thomas Clement (Tommy) Douglas: Item 45e has to do with municipal grants? Is this the item about which the Leader of the Opposition was asking earlier?


Edgar John Benson: No, he was asking about loans, and I undertook to give that information later. These are grants in lieu of taxes.


Thomas Clement (Tommy) Douglas: These are grants in lieu of taxes?


Edgar John Benson: Yes.


Mr. Loney:: Could the parliamentary secretary give us the details concerning the additional amount?


Edgar John Benson: The main estimates contained provision for $27,700,000 and supplementary estimates (A) for $1 million. This item requests an additional $2,800,000. This arises because during the current fiscal year it has been possible to authorize for payment of more grants to municipalities than during the same period last year. These take some time to process, but we are getting caught up and they are on a current basis. This has resulted in a reduction of the backlog of grants to municipalities.


[Stage Direction]
Item agreed to.
56e. To authorize the treasury board to delete from the accounts certain debts due, and claims by, Her Majesty, each of which is in excess of $1,000, amounting in the aggregate to $268,434.88 of which $15,943.01 represents three items that have been carried as assets in the statement of assets and liabilities, $15,945.
Thomas Clement (Tommy) Douglas: This is merely an amount of debt that we are being asked to wipe out?


Edgar John Benson: The total amount of debts being written off comes to $268,434.88, as [Mr. Mcllraith.l
shown in the schedule. I can give the general reason for these debts being written off by the various departments, if this would suffice. Under the Department of Trade and Commerce there is $13,259.26, which is a loss on the sale of shares originally purchased to gain access to a building in Sydney, Australia, for use by the Canadian commercial counsellor and staff. They were carried as an asset in the accounts, instead of being written off.
Under the Department of Veterans Affairs, the Veterans Rehabilitation Act, the sum there represents the failure to repay two student veteran loans. Under the Department of Citizenship and Immigration, this represents the amount by which each original soldier settlement loan was reduced by treasury board authority, pursuant to provisions of order in council P.C. 98/6761 of November 1, 1945. Write-off action for these reductions has long been delayed but has now received treasury board approval. There are ten debts involved.
Under the Department of Justice, this was debt resulting from overpayment of salary and related benefits, where actual service was performed with no evidence of fraud, and collection would create a hardship. Under the national capital commission, this is debt resulting from the illegal employment of one person over 70 years. Under the Department of National Defence these were debts resulting from the illegal employment of persons over 65 years, where actual service was performed with no evidence of fraud, and collection would create a hardship. There are ten debts involved.
Under the Department of Transport, these were debts resulting from failure to repay telecommunication services, and for the supply of hydroelectric power during temporary shutdown of the Welland canal. There are two debts involved in this. Under the unemployment insurance commission this was overpayment made for a staff training course given by consultants. The debtor pointed out that the course had been given to C.N.R. employees at a loss, on the understanding that the insurance commission would undertake to pay. Under the Department of Veterans Affairs, these are debts resulting from the overpayment of allowances under the War Veterans Allowance Act, and there are 80 debts involved.


[Stage Direction]
Item agreed to.
7Oe. To supplement other votes, subject to the approval of the treasury board, for the payment of salaries, wages and other pay list charges, $11,000,000.
George Clyde Nowlan: I take it this is the item that covers the retroactive increases.


Edgar John Benson: Yes, the retroactive increases.


[Stage Direction]
Item agreed to.
77e. To provide that, for the purposes of the Public Service Superannuation Act, a person who died during a period ending before February, 1962 in which he was absent from duty without leave, and in respect of whom a death benefit would have been payable had he died under similar circumstances on February 1, 1962, shall be deemed to have been a public service participant throughout the said period, $1.
Stanley Howard Knowles: Mr. Chairman, I should like to say a brief word on this item. It is another legislative item which makes certain changes with respect to the Public Service Superannuation Act, and I urge on the government that it give more active consideration to the plight of retired civil servants. If it has not got time to bring in a bill, then I would like to see the government introduce one of these estimates for $1 that would change the terms of the Public Service Pension Adjustment Act, so as to make further increases in the pensions of civil servants already retired.
As the parliamentary secretary knows, this is a matter which has been considered over and over again by various ministers, but a while ago we were told by the Minister of Finance that these people would have to wait and see what the Canada pension plan might do for them. It is now obvious the Canada pension plan is not going to do anything for civil servants already retired. I hope one of these days, when improvements are being made in public service superannuation legislation, something will be done for civil servants already retired, and I hope it will be done soon.


[Stage Direction]
Item agreed to.
80e. Government's contribution to the hospitalization (outside Canada) plan, $100,000.
Stanley Howard Knowles: I have no doubt the parliamentary secretary has a note explaining this item. Could he give it to us?


Edgar John Benson: Briefly, this supplementary estimate is required as a result of an amendment to chapter 34 medical services of the Queen's regulations and orders of the Royal Canadian Navy, royal Canadian army and the Royal Canadian Air Force. This amendment introduced charges for medical services in service hospitals, and changed the basis of charges for hospital care. The charge to participants under the hospital insurance outside Canada plan who received in-patient care in service hospitals on or before September 1, 1963, was increased from $16 to $23 a day, as a result of the amendment, requiring the additional amount beyond the $425,000 which was authorized in the original estimates.
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Harold Edward Winch: May I just say briefly I was hoping this went beyond that, because there is a hospitalization plan now all across Canada. There is also one in the Scandinavian countries and in the United Kingdom. If one goes from the Scandinavian countries to the United Kingdom he is covered by hospitalization, and if people go from the United Kingdom to the Scandinavian countries they are covered. I was hoping we would extend our hospitalization plan to accept this, so that when we go overseas we would be covered and when overseas visitors come to Canada they would be covered. I hope this will be considered by the government.


[Stage Direction]
Item agreed to.
Lucien Lamoureux: This completes the supplementary estimates for the Department of Finance. The Department of Fisheries is next.


George Clyde Nowlan: I wonder if I might make a suggestion to the parliamentary secretary to the Minister of Finance. Probably the house leader at this moment is having some discussion as to how many items we could go through this afternoon and, as the Leader of the Opposition pointed out, we are prepared to pass certain ones, and some of them have already been dealt with. There are some other cash items, however, and we are particularly concerned with the Department of Veterans Affairs. These items include payments of war veterans allowances. So far as the official opposition is concerned we are prepared to pass the veterans affairs items very quickly, so that they might be included in any bill which could be brought in a little later on this afternoon.
I understand there are also two items in the estimates of the Department of Labour which were bypassed the other afternoon when we dealt with unemployment insurance. If we dealt with veterans affairs, and time permitted, I suggest we go back to the two items in the labour estimates which we bypassed the other day, if that is agreeable to the house leader.


George James McIlraith: I have one problem. Since speaking on this subject a few minutes ago I have raised the question of what can be included in a bill at this stage for almost immediate passage, and for sending over to the other place. I am advised that it is not going to be possible, without taking some time, to add items to the bill already printed, which includes the items passed up until last night; but I have a suggestion which I think will deal with the problem.
If we bring in an appropriations bill for all the items passed up to last night, pass it and send it over to the other place, then having passed the items mentioned by the hon. member for Digby-Annapolis-Kings later today,

Ways and Means
we can bring in another appropriations bill on Monday and get it over very quickly.


George Clyde Nowlan: All right.


George James McIlraith: I would like to do it the
other way but I am informed it is just not physically possible.


Stanley Howard Knowles: That seems to make sense. Since we are in an hiatus between finance and fisheries, may I suggest this might be a good time to bring in the bill that implements everything that was done up until last night, and while Their Honours in the other place are considering it, we can see how many other items we can pass for another bill for Monday.


Thomas Clement (Tommy) Douglas: I have one other suggestion to make. When we come back to these estimates I would like the minister to set them out in order of priority, so that we can deal with those which are needed most, so that when the bill comes in on Monday, it would cover the items which the minister considers most pressing.


George James McIlraith: I have another suggestion. If there is any possibility of getting a second bill ready later this afternoon I should like to leave that possibility open.


Stanley Howard Knowles: Let us rise and bring in the bill.
Resolutions adopted in committee of supply this day reported and concurred in.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.
['Agreed.']
George James McIlraith: Resolved, that towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31. 1964, the sum of $130,793,985 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported and concurred in.
Mr. Mcllraith (for Mr. Gordon) thereupon moved for leave to introduce Bill No. C-86, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1964.
Motion agreed to and bill read the first time.
['Resolved, that towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31. 1964, the sum of $130,793,985 be granted out of the consolidated revenue fund of Canada.']
The Acting Speaker (Mr. Batten):: When shall the said bill be read a second time? By unanimous consent, now?


Stanley Howard Knowles: Now, by leave.


George James McIlraith: the second reading of the bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Lamoureux in the chair.
On clause 1-Short title.
['the second reading of the bill.']
William Arnold Peters: Mr. Chairman, as this appropriation bill was ready this morning, and the government did not see any way of adding to it, I think it was unfair that it was not presented earlier, for the benefit of the other place.
Clauses 1 to 6 inclusive agreed to.


[Stage Direction]
Schedule agreed to.
Bill reported.
['Mr. Chairman, as this appropriation bill was ready this morning, and the government did not see any way of adding to it, I think it was unfair that it was not presented earlier, for the benefit of the other place.\nClauses 1 to 6 inclusive agreed to.']
Mr. Deputy Speaker:: When shall the said bill be read a third time? By unanimous consent, now?


Stanley Howard Knowles: Now, by leave.
Mr. Mcllraith (for Mr. Gordon) thereupon moved the third reading of the bill.


[Stage Direction]
Motion agreed to, and bill read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Lamoureux in the chair.
['Now, by leave.\nMr. Mcllraith (for Mr. Gordon) thereupon moved the third reading of the bill.']
Charles Mills (Bud) Drury: Mr. Chairman, I wonder if you would call vote No. 50e of the Department of Labour.


Lucien Lamoureux: Is that agreed?


Some hon. Members:: Agreed.



[Stage Direction]
50e. Administration of the Unemployment Insurance Act-To extend the purposes of vote 50 of the main estimates for 1963-64 to include a grant of $1,500 to the Canadian association for adult education to assist in defraying the expenses of the national seminar on guidance and counselling held in Canada in November, 1963 and to provide a further amount of, $720,000.
Lucien Lamoureux: Shall the vote carry?


[Stage Direction]
Item agreed to.
55e. Transfer of labour to places where employment is available and expenses incidental thereto, in accordance with regulations of the governor in council, $18,000.
William Arnold Peters: Mr. Chairman, would the minister care to explain to what areas this vote refers. Does it refer to the Bancroft and Elliot Lake areas, or are there other areas involved?


Mr. MacEachen:: Mr. Chairman, the areas involved are Bell island, Newfoundland, and Sudbury, Ontario.


William Arnold Peters: Are there continuous applications for a number of areas at the present

time, and is there still a backlog in Sudbury? It would appear there was in Bell island, according to the picture the other night. Also, is it completed at Bancroft and Elliot Lake? There has been quite a transfer there, I understand.


Allan Joseph MacEachen: For the fiscal year just ended the total expended was $55,000. We need an additional sum as mentioned here to meet the expenses for workers and dependants from Bell island and Sudbury. I might tell nay hon. friend that during the past fiscal year expenses were paid for 38 workers, 402 dependants and 97 sets of household effects. Transfer from Sudbury and Bell Island are as follows: Bell island, workers, 1; dependants, 273; household effects, 58. I believe that almost all the dependants from Bell island were located in Ontario. For Sudbury the number of workers was 58; dependants, 129; household effects, 39. I understand that a great proportion of this group was located at Thompson, and I believe a few in Elliot Lake. It may interest my hon. friend to know that at the present time the national employment service tells me there is a shortage of miners in Elliot Lake, for understandable reasons.


John George Diefenbaker: Mr. Chairman, I should like to ask the minister whether this particular fund is available to assist railway employees to move themselves and their families when the areas in which they have been located are on rail lines which have been closed down or abandoned.
This is a problem which deserves serious consideration by the government. Railway employees established in certain areas, naturally expecting to remain there, find themselves under the circumstances completely out of work and have to move to other locations. This is something which the representatives of the railway unions have pressed for strongly, and I think action in this regard should be considered. I would ask whether this item covers such a situation as I have placed before the committee.


Allan Joseph MacEachen: Mr. Chairman, to my knowledge this particular form of transportation assistance has not been made available to railway workers. The particular areas, as my hon. friend knows, are declared eligible for this kind of assistance. I have asked the offices of the department to review this whole question of providing assistance for workers who wish to move from one part of the country to another, because it is my suspicion, if not my conviction, that at present this form of assistance is rather restrictive. To be [DOT]eligible individuals must undergo a rather strict means test, and I think it might be possible to widen the program to include *certainly a class of workers who are not
Supply-Fisheries
absolutely destitute or completely without funds. I think these suggestions made by the Leader of the Opposition ought to be considered and will be considered in light of the review which is now under way in the department of this particular matter of providing assistance to workers displaced from one area, and who wish to go elsewhere.


Malcolm MacInnis: A further question to the minister on that point. Despite the fact that one individual may be in what could be considered a high employment area, nevertheless he may be unable to get a job. Therefore, what yardstick is used in deciding whether he is eligible for assistance? After all, it matters not to an individual in that position whether there are hundreds more like him or not; the fact remains that the individual is out of work and is directly affected.


Allan Joseph MacEachen: I think the present policy is that when a particular area is declared a surplus manpower area the individuals in that area become eligible. I agree with my hon. friend that the plight of a man who is unemployed and unable to find work in an area of high employment may be as severe as the position of any individual in an area which has been declared a surplus manpower area owing to general conditions. The suggestion made by my hon. friend will be considered, because I believe that the desire to increase mobility of workers is a worthy one, and if it can be achieved through assistance of this kind is a pretty worth-while investment.


Gérard Laprise: Mr. Chairman, could the minister tell the house whether the government has considered or will consider the possibility of setting up such a fund for the municipality of Parent, since the radar station located there has been closed down or will be in the near future? In view of the fact that the radar station provided practically the only employment for the local citizens, will such a fund be made available to them?


Allan Joseph MacEachen: I will be glad to ask for information about the particular area in question and to see whether it is eligible under present policy; and I will consider what can be done in light of that policy.


[Stage Direction]
Item agreed to.

[Stage Direction]
70e. Assistance, in accordance with terms and conditions approved by the governor in council, for the construction of fishing vessels in respect of which capital subsidies authorized by vote 222 (Canadian maritime commission) of these estimates may not be paid, $200,000.
1774	HOUSE OF
Supply-Fisheries
John George Diefenbaker: I should like to ask what the situation is with respect to fishing vessels since the withdrawal of the subsidies.


George James McIlraith: I am not clear what subsidies have been withdrawn. I do not quite follow the right hon. gentleman.


John George Diefenbaker: Is it not a fact that subsidies for the construction of fishing vessels are no longer in existence? Am I not right in that?


George James McIlraith: No, I think they are still in existence. There are a great many fishing vessels being built under subsidies at the present moment.


John George Diefenbaker: If the minister would tell the committee how this $200,000 is made up, that might answer my question.


George James McIlraith: In the main estimates there is an item of $300,000 to provide assistance for the construction of fishing vessels in respect of which capital subsidies are authorized. The vote number is 222. This supplementary estimate is for $200,000. By October 1963 applications for payment of subsidies had exceeded the anticipated requirements and an additional allotment was made. In addition the department had on hand nine claims for subsidies to be paid and also notice of application for subsidy had been received for another 14 vessels. Since the department had no funds available to meet these additional requests an allotment of $200,000 was obtained, and this supplementary item is to recoup this allotment of $200,000. I do not know what more detail I can give, but the subsidies are being paid.


Frank Howard: Can the minister give the committee some indication of the division by dollar amount of the expenditure on this subsidy on the east coast and on the west coast?


George James McIlraith: I do not have it before me, but I will try and get it.


Frank Howard: When does the minister expect to get it?


George James McIlraith: I can tell the hon. member now that part of this item is for the lobster trap indemnity account, and none of that affects the west coast since they have not succeeded in producing the kind of lobsters which are most popular. I will have this matter turned up in a few minutes, however.


Frank Howard: Actually I am not talking about lobsters but about item 70e, which is the subsidy for fishing vessels. I know we do not harvest lobsters on the west coast. It has been tried, but someone told me that they forgot to take the plugs out from the claws


when they put the lobsters in the water, and they starved to death.


George James McIlraith: That story has been told on the estimates for the last 23 years.


[Stage Direction]
Item agreed to.
5e. To authorize reimbursement to the lieutenant governors of the provinces of Canada of the costs of travelling and hospitality incurred in the exercise of their duties up to a maximum per annum for each as detailed in the estimates- To increase the maximum per annum for each of the lieutenant-governors of the provinces detailed in these estimates, $6,000.
Stanley Howard Knowles: Does the wording of this item means that in the case of the three provinces indicated in the details of the estimates the maximum expense allowance for the lieutenant governors is being increased? Another question would be as to how these various figures of the expense allowance for the various lieutenant governors are arrived at?


George James McIlraith: The amount of the allowance for travelling and hospitality used to be tied to the census figures but in 1963-64 there was a change, bringing the amount of this item to $6,000. It was found, however, that this arrangement was not permissible in the case of Manitoba, Nova Scotia and Saskatchewan and this item in the estimates is to bring those three lieutenant governors into line with the others.


Stanley Howard Knowles: I do not wish to delay on this item because it is not one of major importance, but I am afraid I cannot find anything in the estimates to correspond to the figure of $6,000 to which the minister has referred. The vote for 1963-64 varied all the way from $7,500 to $18,000 for the various provinces. I wonder if the minister has got hold of the right note for this item.


George James McIlraith: The item is to be found on page 156 of the main estimates. After the details are considered, and these supplemen-taries added to the total, it will be seen- well, quite frankly, I am not sure of this explanation. The matter is again being looked at and I believe it has been changed in the main estimates for the coming year. This was intended, apparently, to take care of an anomaly in computing the allowances, and I am not clear about the explanation. That is the situation. I am sorry. It ought to be more precise, but I think I had better leave a more precise explanation until we reach the main estimates.


Stanley Howard Knowles: In view of the minister's admission that he does not quite know what this is all about, I will not hold him up any longer.


[Stage Direction]
Item agreed to.

[Stage Direction]
le. Departmental administration including grants and contributions as detailed in the estimates, $10,000.
Mr. Martin (Timmins):: Under this item, which deals with the administration of justice, I think it might be a good idea to bring to the attention of the committee a case of what might be considered poetic justice. I should like to read to the committee something which I discovered on my desk today-something which has to do with certain procedures in this house of recent date. The document is entitled "The Easter Game" and it goes as follows:
The strangest weird and eerie tale Of all the Easter stories Is this about the "Easter Game"
Of Liberals and Tories.
The Liberals had a crafty plan It simply would entail A happy Easter holiday If silence would prevail-


Eric Alfred Winkler: On a point of order. I do not think this is the sort of thing which should be put on record at this point in our proceedings today. It has no bearing on our proceedings and only serves to halt the progress we are making here this afternoon.


Frank Howard: I would point out to the hon. member for Grey-Bruce that the gentleman who sits in front of him, the Leader of the Opposition, took a considerable length of time earlier this week to deal with exactly the same subject matter as my hon. friend wishes-


Gordon Minto Churchill: I rise on a point of order. Are we dealing with the estimates or are we discussing some other matters?


Lucien Lamoureux: I understand the hon.
member for Skeena is raising a point of order.


Frank Howard: On the point of order raised by the hon. member for Grey-Bruce, may I remind Your Honour that the Leader of the Opposition dealt with this subject matter. He did so in a manner different from the one used by my hon. friend from Timmins. One was prose and the other is poetry. That is the only difference.


Eric Alfred Winkler: May I say something further on the point of order? I think that in the course of the proceedings which have taken place this week there has been enough personal attack, and quite enough effort has been put forth to assassinate people both in this house and in the other place. So I think we could well do with less of that sort of thing today.


Lucien Lamoureux: I think the point of order raised by the hon. member for Grey-Bruce
Supply-Justice
is well taken and I am sure the hon. member for Timmins will agree that, although the submission he is trying to make is put in a poetic way and may be of interest, it has no bearing, it would appear to the Chair, on the item we are now considering, namely vote le of the Department of Justice.


Murdo William Martin: If I might be permitted to say a word on a point of order, it would appear to me that we are having a repetition of what happened last week, when something was condemned before it was ever heard or listened to.


Eric Alfred Winkler: It seems to me there was a fair contribution from that quarter of the house as well.


Frank Howard: Mr. Chairman, my comments on the Department of Justice will have to be, not in poetry but in the more usual form of prose. Inasmuch as this item involves a grant to the Canadian corrections association to assist in defraying the expenses of the fifth international criminological congress to be held in Montreal in 1965, I should like to make some comments about the general question of criminological procedures and to express my regret that because of a sort of parting gift by the former minister of justice, all the background policy and previous attitude of the government, and certainly of the former Conservative government when the department was headed by Mr. Fulton, seem to have been wiped out to satisfy a political promise.
I know that this may upset some people in Cornwall, but I just do not think that Cornwall is the place to put the new prison for women. Anybody who has paid any attention to criminological or sociological matters is of the opinion that penitentiaries and prisons should be placed in those areas where sociologists, criminologists and people interested in this field can have easy access to these institutions in order to work with the prison officials, and particularly the inmates, from the point of view of bringing about their rehabilitation. As far as I am concerned, the decision to build the new prison for women at Cornwall detracts from any such program.
Anybody who has been through the existing women's prison at Kingston will certainly agree that it is an antiquated and disgraceful structure, in which nothing useful is accomplished outside of locking people behind doors, and that there is certainly a need for a new prison. But in my view the new prison for women should be constructed within the complex that exists at Kingston, rather than being transplanted to some part of the country removed from the benefit of all the good work that can be done by people from Queen's

Supply-Justice
University, and those in the penitentiaries branch who are already working in the Kingston complex.
I also wish to express some concern about the proposed drug treatment centre at Matsqui. After my national leader, the hon. member for Burnaby-Coquitlam, and I visited the B.C. penitentiary last winter I drove up the Fraser valley to Matsqui the following day to look at the situation. The ground is levelled off and there is a nice wire fence around the property in preparation for the establishment of this new so-called drug treatment centre. But so far I have not heard a single word from anybody in the government with regard to just what is supposed to take place at that centre. The government seems to have no policy and no ideas with regard to rehabilitation from a clinical or sociological point of view.
If nothing more is going to be done in dealing with people addicted to narcotics than has been done in the past, then to all intents and purposes the $7| million or whatever the amount is that is going to be spent at Matsqui is a waste of money. I say that because all we will be building is another prison in which we can lock up people and, when their time is up, open the doors and let them out again so they can start the whole process all over again of looking for drugs, being apprehended and tossed into jail once more. This is what we have been doing in Canada for years, and so far we have achieved absolutely nothing except to fill our prisons- in the west in any event, where there is a high incidence of narcotic addiction-with people who are unfortunately addicted to narcotics.
We have not turned a single stone in the field of so-called drug treatment. We have not heard a word in this regard from this government, its predecessors or from the provincial government of British Columbia which is concerned with the general question of health. We have had nothing but the following of procedures used in the United States, which have been an abject failure if anything has. While we are not taking action under this item, I say that before we blindly proceed to endorse the building of another prison complex at Matsqui and give it the fancy name of a drug treatment centre, we had better ask some searching questions and get some sensible, farsighted answers from the government as to just what it intends to accomplish and how it intends to proceed at this drug treatment centre. If we do not do so we will just be spending another $7J million or $8 million on another prison which will accomplish precisely the same thing in the field of drug treatment that prisons have accomplished in the past-absolutely nothing.


William Arnold Peters: Mr. Chairman, we are spending this $10,000 to have the fifth international criminological congress held in Canada in 1965. Unless the Department of Justice comes up with something worth while I should think we should be ashamed to have this congress meet in Canada. We are very far behind in penal reform. As the hon. member for Skeena has mentioned, we have built prisons to contain people, rather than correctional institutions to help to rehabilitate them.
In my own small way I have examined several aspects of this problem and I find that the new states of Alaska and Mexico, and other countries, have made much more progress than we have. In some cases they have not had the benefit of a royal commission report, such as that of the Fauteux commission, but yet we have done very little by way of reform to make us proud of what we have accomplished in Canada. Since this congress is meeting in Canada I would think we would want to be able to show other nations the advances we have made, but the fact is that in the whole field of justice there is very little in this country of which we can be proud. Certainly this is true when you find the province of Ontario putting through a bill such as was introduced in the legislature a few weeks ago.
It seems to me, Mr. Chairman, that the Department of Justice could at least pick one field and concentrate on it, so that we would be able to have something to show the congress with regard to the advances that are possible in Canada in the correction of criminals. If we picked one field we should at least be able to give some leadership to the congress in that field. Canada is not such a backward country that we cannot pick out and concentrate on making advances in one field. In this way we would be able to show the delegates who will be attending the congress that there is at least one aspect of criminology in which we are better than other countries.


Almonte Douglas Alkenbrack: Mr. Chairman, I cannot let this item go by without making a brief comment on it. We have waited a reasonable length of time, being reasonable people, and I should now like to ask the parliamentary secretary-I believe the Minister of Justice is unavoidably absent-whether the government has definitely decided to move the women's prison from Kingston to Cornwall. A good many people in my district who work at the prison are naturally much concerned about this decision. They are people who have put down their roots in the district through purchasing modest though comfortable homes, and they want to know what the future has

in store for them. The interests of these people should be considered.
Then again, the various associations of social workers throughout the district are protesting this pending move. I wish to point out, as has been done before, that Queen's University is well equipped to treat these inmates from a social or psychological aspect. We have two good hospitals in the area that are well equipped to handle any emergency. They are the Kingston General hospital and Hotel Dieu, both well equipped and staffed, and both of which are expanding. I would say to the parliamentary secretary, who represents the Department of Justice here, that he should think twice before making a move of this kind. We in the bay of Quinte district are very much concerned about it.
Second, Mr. Chairman, I should like to know if the Department of Justice has abandoned the tenders system in connection with the purchase of beef on the hoof for the penitentiaries at Kingston and Joyceville. I have been told, without any personal inquiry on my part, by the producers of this type of beef that they no longer are invited to tender. These tender forms are no longer mailed out to them. What is going on under this new administration which was going to introduce a new era of service to the public? I ask the question, have you abandoned the tenders system? The supplying of this material now goes to one or two people, no doubt some of your own pets. I would admonish the government to get back to the good tenders system that we used to have in 1962, under which the penitentiaries received good beef at a fair price, and all producers had an opportunity to sell their beef.
Third, Mr. Chairman, although I deplore the necessity of more prisons in this country, I must say I welcome the announcement made the other day by the hon. member for Kingston that a new prison would be constructed. He did not say it would be constructed in Prince Edward-Lennox, but he said it would be at Millhaven. He might more correctly have said at Bath, Ontario, in Prince Edward-Lennox, which is the constituency I represent. The present administration is not the author of this plan. It dates back to the former administration which was studying decentralization of the prison system as long ago as 1959. This announcement is the fruition of the plan. As its representative in the house in the last two parliaments, I have been lauding the merits and the advantages of the location of Prince Edward-Lennox. I would say, Mr. Chairman, that Prince Edward-Lennox accepts the trust that has been laid on its shoulders. We will work with the rest of Canada in the best interests of the
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penal institutions and for the public good of Canada.


Mr. Macdonald:: I should like to reply briefly to the observations made by the hon. member for Prince Edward-Lennox. With regard to the proposed shift of the women's penitentiary, I would remind the hon. member that the minister has indicated in the house and elsewhere he will be receiving representations from interested institutions such as the John Howard Society, the Elizabeth Fry Society, and so on. I am much obliged for his observations about the local effect of the suggested changes, and I will bring those to the attention of the minister.
In so far as the hon. member's second observation is concerned, I regret that I am not personally able to respond to it. I will bring that to the minister's attention so that at some future date the hon. member may be satisfied in this regard.


Harold Edward Winch: I am somewhat amazed at the discussion that has taken place under this supplementary item. In view of what has been said, therefore, I should like to add a few words of my own.
First of all, with regard to the women's penitentiary, I may say that if hon. members who have spoken within recent minutes were here when I asked a question on orders of the day they would remember I asked the Minister of Justice whether or not the previous minister told the truth or lied when he made a public statement that it was to be moved to Cornwall. The answer I received was, "I will have to take this as notice". Another question I asked was whether or not any decision had been made. The answer was, "Put the question on the order paper". Obviously no definite decision has been made.
What does surprise me, sir, is the remark made by one of my own colleagues in my own party, and the hon. member who just resumed his seat, concerning the relationship between the women's penitentiary in Kingston and Queen's University. I wonder if both hon. members know what the dickens they are talking about. What is the relationship between Queen's University and the women's penitentiary in Kingston, and what has that to do with whether or not the penitentiary should be kept in Kingston? If my information is correct, and I am sure it is, Queen's University does not have a psychiatric department in its medical school. What is the relationship, then, on the basis of psychiatry, between Queen's University and whether or not there will be a women's penitentiary at Kingston? So far as I am concerned, it is very clear, and I have been interested in penology for 30 years. The important consideration is not the location but the job that can be done. When I first heard

Supply-Justice
there was a probability of a new penitentiary being built away from Kingston, I made inquiries. There was talk of Cornwall being the site, and I found that one month ago there was only one woman from Cornwall in the Kingston's women's penitentiary.
I disagree with the construction of a new narcotics centre in the Fraser valley, but if it goes ahead it will mean that one third of those now serving in Kingston penitentiary, the third who are narcotic addicts, will be transferred to the Fraser valley. Of the balance of those now in Kingston one third come from Ontario and Quebec, and one third from the western provinces, and almost all of those from B.C. will be transferred to the narcotics centre in the Fraser valley.
I regret very much that parochialism should be the deciding factor in the location of an institution. I have heard it said this was to be done on a patronage basis, so I made inquiries and I found that in none of the areas suggested yet has the federal government any property, nor has it taken option on any property for the establishment of a women's penitentiary. Therefore when members get up, whether they be from my own party or otherwise, I hope they will realize what they are talking about.
Do not tell me about Queen's University in relation to a penitentiary because it has not got any department of psychiatry or psychology, and do not tell me about patronage when there is no government owned land or government opted land. We are greatly behind in meeting the need for a new women's penitentiary, but it should be established on the right basis of modern penology.
I agree completely with the hon. member for Skeena in his remarks about the $4 million or $5 million narcotics centre in B.C., because it cannot do the job. Such a centre is years behind modern understanding and, as the hon. member for Skeena said, what we are doing is putting up a new prison, and treating addicts as criminals instead of sick people, as they are recognized to be throughout the rest of the world. Both the federal and provincial governments would save millions of dollars if we treated them as sick people and not as criminals.
I did not know that this supplementary estimate would lead us into such a discussion, but I do hope questions of parochialism and provincialism will be set aside and we shall consider the matter on the principles of modern penology and criminology rather than on the proposition of constituency expediency.


Thomas Clement (Tommy) Douglas: Do I take it from the remarks of the parliamentary secretary that no final decision has been made with reference to the location of a women's correctional institution? Second, has any provision been made

in the estimates for 1964-65 for the construction of such an institution?


Donald Stovel Macdonald: As I stated, the minister has indicated his willingness to hear from the various associations with respect to the location of this particular penitentiary. I think it can be assumed that their views will be taken seriously and that to the extent they can be accommodated or should be accommodated, this will be done. As to the second question I am afraid I cannot enlighten the hon. gentleman at this time.


John George Diefenbaker: There are a couple of matters that deserve to be considered. One is the statement of the hon. member for Vancouver East who says that there is no department of psychiatry or psychology in Queen's University. There is one member here fully conversant with that, the parliamentary secretary to the Minister of Finance, who is temporarily out of the chamber, and I think he should be given the opportunity of clarifying this uncertainty.


An hon. Member:: He is here.


John George Diefenbaker: He is the hon. member for Kingston and would be able to give the committee the fullest and most complete information in this regard. He was here a moment ago-


An hon. Member:: He is here now.


John George Diefenbaker: I beg his pardon. I was not looking in his direction.
If the minister were here I should like to ask him a direct question. I do not like directing questions to the parliamentary secretary because he does not cover the entire field, excepting on the perimeter. Did Hon. Lionel Chevrier have any authority for making the statement that he did, on the occasion of the celebration in his honour prior to his departure for higher spheres of service, that the women's penitentiary was to be established in Cornwall. I am not entering into the merits or demerits. It was a strange place for an announcement like that, but I would ask the parliamentary secretary, within the purview of his more or less limited knowledge, whether he can say Mr. Chevrier spoke with authority or merely with enthusiasm?


Donald Stovel Macdonald: As the Leader of the Opposition has pointed out, my purview in this respect is limited, and unfortunately the answer to that question is beyond my purview.


Edgar John Benson: The Leader of the Opposition raised a question with respect to Queen's University. I know as a fact that there is a department of psychology at Queen's University, and in addition there are a good many psychiatrists in Kingston. I think the per

Fair Employment Practices Act capita number of psychiatrists in Kingston	CANADA FAIR EMPLOYMENT
compares most favourably with that of most	PRACTICES ACT
places on the North American continent. There were a couple of other points raised by the amendment to prohibit discrimination hon. member-	because of age


Harold Edward Winch: You said a department of psychiatry?


Edgar John Benson: Psychology.


Harold Edward Winch: If there is a department of psychiatry-


Edgar John Benson: Psychology.


Harold Edward Winch: I have been in touch with the government on this very matter and I was informed that there was no department in Queen's University.


Edgar John Benson: There is a department of psychology.


Harold Edward Winch: Not psychiatry?


Edgar John Benson: I said psychology.


George James McIlraith: Mr. Chairman, it is five o'clock and I wonder if I might interject something here. I have taken steps to endeavour to have a bill prepared covering those items of the estimates that were passed today that were particularly important, with reference to veterans affairs, as was mentioned by the Leader of the Opposition, and one or two salary items. If that bill can be prepared I should like later to ask the permission of the house to interrupt private members' hour in order to have the appropriation bill, including those items, dealt with by the house.


John George Diefenbaker: We are agreeable.


Stanley Howard Knowles: Agreed.


Some hon. Members:: Agreed.
Resolutions adopted in committee of supply this day reported and concurred in.


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


Stanley Howard Knowles: Mr. Speaker, may I ask the Acting Minister of Finance (Mr. Mcllraith) if he can tell us at what time this second appropriation bill might be ready, so we can avoid interrupting the speech that might be in progress?


George James McIlraith: Mr. Speaker, I am just waiting for it to arrive. I cannot tell at the moment. It should arrive in the next few minutes, but I cannot give any more precise time than that. I am going to check on that now.


Barry Mather: the second reading of Bill No. C-28, to amend the Canada Fair Employment Practices Act (age discrimination).
He said: Mr. Speaker, in rising to speak to this measure that stands in my name I am very hopeful of getting the rapt attention of all hon. members, the more so because I am very sure that with few exceptions all hon. members fall into the category which this measure would assist; that is, the category of the older worker. The explanation of the bill is as follows:
The chief purpose of this bill is to add age discrimination to the list of prohibited employment practices unless age is a bona fide occupational qualification. A secondary purpose is to prohibit the employer from including in an employment application form, advertisement or written or oral inquiry, a question or request for particulars as to the applicant's race, national origin, colour, religion or age unless by reason of a bona fide occupational qualification.
I am sure that all hon. members are acquainted with the good reasons for putting forward such a measure, but it may be that not all are so well informed as to the many states and administrations which already have this type of legislation in operation. I have here a summary of this type of legislation which has been in effect in the United States for a number of years. As long ago as 1960 there were at least ten states with laws on their statute books to protect the older worker from discrimination. The acts in these states vary in detail but their end goal is to protect the older worker against discrimination because of age.
In New York state they added this provision in 1958, specifying the ages as 45 to 65. However, interpretive rulings of this provision, issued by the state commission against discrimination, state that discrimination because of age "shall mean discrimination based on an over age", and it is not limited to the ages specified. Thus an employer may not discriminate against a person solely because the person is over the age the employer desires to employ. I gather it would be unlawful for an employer to specify, for instance, that he wanted a bookkeeper under the age of 35. As I say, the legislation in the different states differs in detail. Louisiana had an act of this type 30 years ago, in 1934. Their law makes it unlawful for any employer having 25 or more employees to adopt any rule for the discharge of any employee or the rejection of a new employee under 50 years

Fair Employment Practices Act of age. The penalty in that state is a fine of up to $500 or a jail sentence of up to 90 days, or both.
I am sure that many hon. members are aware that in the last few months the government of British Columbia has proposed to put on its statute books similar protective legislation to defend the employment rights of the older worker. I am sure, also, that many of us are quite well aware of the need for some type of law to this effect. We have all heard of cases where a person of, say, 40 years of age, or 45 or 50-the age varies with the industry concerned and the circumstances-has been unable to gain employment because he is considered to be too old. In some cases the reason given is that an older person becomes less efficient and tends to slow down on the job. Another reason, however, is the effect of the growth of private pension plans in industry. A number of industries find that it is difficult to fit an older worker into a pension plan because by the time he reaches the normal retirement age he will not have put in enough service to qualify for a pension. We in this party, of course-and I know this applies to many hon. members in other parties-have advocated the necessity in Canada of setting up a comprehensive, portable pension plan for the whole country. It is regrettable that this was not done many years ago. However, the implementation of such a plan makes the pension barriers along with other factors more harmful to tne people in the older age brackets seeking employment, and this bill attempts to overcome the situation.
In fairness both to the present administration and to the previous one, both ministers of labour concerned have taken good stands to encourage the employment of older workers. The present Minister of Labour (Mr. MacEachen) has issued an excellent leaflet in which he says that older workers can offer accuracy, dependability, mature judgment, stability, lower absenteeism rates, lower labour turnover and lower accident rates. The previous minister of labour when he was in office made a statement which I think was most admirable on this point. He said:
Justice and freedom of opportunity to every individual as spelled out by the United Nations was adopted by 58 countries, including Canada, in the universal declaration of human rights, in December 1948. Is it justice and freedom of opportunity to raise obstacles to employment against any segment of society, for any reason, including age? Should not all individuals have an equal right to jobs which they are capable of doing whether they are 20 or 70 years of age?
It might be of some interest to hon. members, and perhaps of encouragement to them, to consider the following statistics with regard to the efficiency and success of older people,

some rather notable ones included. For example Benjamin Franklin invented bifocal glasses at the age of 78. He was also appointed ambassador to France when he was in his 70's. Thomas Hardy, the English novelist and poet, wrote some of his best poetry shortly before his death at 89. Verdi composed four notable musical compositions at age 85. William Ewart Gladstone was British prime minister at the age of 82. Albert Einstein was active in science until his death at the age of 75. Winston Churchill became prime minister at 65 and served either in that office or as leader of the opposition until his resignation at the age of 80.
In conclusion, Mr. Speaker, I feel that until Canada has what we all hope will become a comprehensive portable pension plan it is very much in the interest of the older workers that they be protected by some such legislation as proposed by this bill. I urge all hon. members to consider the fact that there is no reason why the immediate effects of developing technological revolution should fall more heavily on one group of Canadians than another. I should very much like that the subject matter of this bill be referred to the appropriate committee.


Mr. Lloyd Francis (Carleion):: Mr. Speaker, I think the mover of this bill should be congratulated on the purpose he has in mind, and as he indicated at the beginning of his remarks it is one which should be shared by every member of this house. He even went so far as to say that a large number or us personally might, should we not be fortunate on future occasions, benefit by the measure he is proposing. I think that while we all agree with the purposes of the bill we must look carefully at a piece of legislation which attempts to do something which, though we all think it right and proper, may yet fail because of the way it is drafted to accomplish the purpose it has in mind. I am not sure whether this is the case, but I have some doubt about the wording of the bill as now presented.
The mover of the bill in a very good and clear statement cited legislation in two states of the country to the south of us. The two examples he referred to involved a type of legislation which is not the approach incorporated in the hon. member's bill. He mentioned New York state and one of the southern states, if I recall correctly; but in both cases the legislation was drafted specifically to deal with the problem of older age groups, and the older age groups were more specifically defined.
The legislation we are asked to consider does not mention any specific age. It seeks modification of the Canada Fair Employment Practices Act and makes it an offence for an

employer to refuse to employ an older person or even to ask questions, verbal or written, concerning age unless age be a bona fide occupational qualification. I listened with some interest for guidance on how the hon. member felt that this particular concept should be applied in the administration of the law, but I was disappointed that he did not elaborate on this aspect because it seems to me that is the core of the legislation by which he feels we should attack the problem.
We agree that the problem is discrimination against older workers, but discrimination on the ground of age takes place in many circumstances and at different stages of life. I am sure hon. members at this time of year have the same kind of problem which was faced by myself on a few occasions in connection with students who are concerned about summer employment. If there is one group in society I feel a great deal of sympathy for-and most of us were students not so long ago-this is the one. But the kind of discrimination faced here is usually the reverse kind; employers do not want a student who is younger than 19 or 20. The younger students at university find the problem of age discrimination working adversely against them, and for reasons which I think are quite understandable. There are not enough jobs to go around, and the first approach of the employer is to take the older students.
The draft of the legislation presented to us would make it just as much a prohibited employment practice to discriminate against younger workers going on the market as it would against older age groups. Possibly this is what the mover of the bill has in mind; if so, he did not give any indication that he was concerned about the general problem of age discrimination at different stages of life. As the legislation is drafted I think it raises the very serious problem of whether or not we would be putting a law on the books which would not be enforced and generally respected. If the intention is purely discrimination against older workers, then I think we should adopt the approach set out in the New York state law, of spelling out the age groups concerned.
The problem of discrimination is a very subtle one, Mr. Speaker. It is a very difficult one for any legislative authority to prohibit by legislative action. There are many good reasons for this, and the mover of the bill has this in mind in providing an escape door by including the expression "a bona fide occupational qualification". For example, the problem of military service comes to mind, where retirement is compulsory at an early age for reasons which few of us have really questioned in terms of purpose. On many occasions occupations such as that of air line pilot, for
Fair Employment Practices Act example, have been subject to an age discrimination, perhaps unfairly, although I would not pass judgment quickly on that question. The mover of the legislation presumably assumes that this type of occupation would require a bona fide occupational qualification. But there is a large grey area here where the problem of determining what is a bona fide qualification and what is not would call for very careful administrative interpretation. I am not saying it cannot be done but I am seriously concerned in my own mind as to whether or not a blanket proposal of the nature suggested in this legislation is the most effective means of dealing with the problem. I would prefer to say that a negative prohibition is one approach, and no doubt it is a useful approach.
I for one have no quarrel whatsoever with legislation which attempts to prohibit discrimination on the grounds of race, national origin, colour or religion. It seems to me that a democratic society has learned that legislation is needed to help in the over-all attack on this kind of discrimination. But along with these other measures there must be positive inducements which range from education to the incentives which the government introduced in the last budget, and which we applied for the first time in terms of encouragement to create employment for men and women over 45 years of age.
This positive approach does not follow any single line of attack. I was pleased to hear the hon. member refer to the educational material distributed by the employment service of the Department of Labour which draws attention, very nicely and very convincingly, to the desirable attributes of older workers and the circumstances in which they should be sought out. Very few of us, when we choose a dentist, or a solicitor to give us advice, or a doctor, are worried about whether that man or woman is over 45 years of age. If we do have a preference at all it is probably for the older, more mature, more experienced person. If there is a problem in discrimination here, it is a question of discrimination against the younger person, especially in professional practice. Society has been conditioned to accept the performance of the older citizens in this area as being, on the whole, a superior performance.
The government, very wisely I think announced in the last budget certain incentives designed to create additional employment opportunities for older workers. In the case of men and women who had been unemployed for at least six of the previous nine months and who are over 45 years of age, the government took the approach that if an employer could establish that there was a vacancy on his labour force in which he could employ

Fair Employment Practices Act such a man or woman the government would provide a subsidy amounting to $75 a month or one half the earnings, whatever was the lesser. As a result of this encouragement there has been a healthy start in the process of making additional employment opportunities available to older people. But this has to go together with a program of community education and "selling", in the best sense of that term, the advantages of this type of legislation. By the end of February, according to the best information we have, there were 1,986 applications under the older workers program.


Malcolm MacInnis: Would the hon. member permit a question? He has referred to the program undertaken by the federal government, a program which imposes the older worker on private industry by making assistance available. Is the hon. member not aware that while promoting this program the government itself is running counter to this program by advertising job positions with an age limit attached thereto?


Cyril Lloyd Francis: It is not easy for me to answer a general observation of that kind. The hon. member alleges that the federal government have announced competitions containing age barriers and puts notices of such positions in the press. Is that the comment?


Malcolm MacInnis: Yes, they have done exactly that in the job opportunities they have advertised. They continue to advertise these positions with age limits attached to many of them.


Cyril Lloyd Francis: I am not aware of any competitions advertised recently with a condition of that nature included, but if the hon. member has examples that he can bring forward I am sure this government will give careful consideration to them, because one of the things we have tried to do is to set a good example as an employer-that is, the government of Canada in its own capacity. It may be that some crown agencies and corporations are slow in reflecting the most up to date thinking on this question, but it is certainly the intention of the government to remove such practices and substitute better personnel practices wherever the need for it is drawn to the attention of the administration. If the hon. member has a specific civil service competition poster, or any other evidence of the type of activities he described, perhaps he would bring them to the attention of the government, or to my attention, and we will be pleased to make recommendations to see that this kind of thing is stopped; because I think we all agree it does not represent the type of policy we are trying to implement today.


Malcolm MacInnis: I should like to point out to the hon. member that this matter has already been drawn to the attention of the Minister of Labour, who did not object to the practice when the question was put to him.


Cyril Lloyd Francis: In a sense, we are dealing with a hypothetical situation, because I do not have details of the situation about which the hon. member is complaining. But I am confident that if these things are brought to the attention of the minister they will be dealt with properly and effectively.
The number of placements approved was approximately 1,333. The number of actual placements was somewhat lower, at 936, and it is estimated by the end of March of this year 2,350 applications will have been approved and about 1,300 people placed under this program. No doubt we would have been happier had the numbers been even greater, but we are pleased with what has been accomplished. We are confident that in the future we can base an improved program upon the experience of the recent period.
Among the problems which a government faces in developing a program of this nature is the basic employer preference for younger workers. This is insidious in its nature and is part of the tradition of a frontier society. In 1900 the average expectation of life was 46; a man aged 50 was written off in the minds of many people. We know that the situation has changed today, but the cultural attitudes of a previous generation do not die easily in our society. One of the main reasons for discrimination against older workers is, as the hon. member who moved this bill pointed out, in the area of pension schemes. He mentioned that the group he represents in this house has for some time supported the principle of a nation-wide portable pension scheme which would help meet this difficulty. So does this government, Mr. Speaker. I point out that one of the things which the Canada pension plan will do is just this: It will make it much easier to provide pensions for workers who move from one area to another.
An interdepartmental committee of the Department of National Health and Welfare, the Department of Labour, the department of insurance and other groups examined the factors which influenced employers' attitudes in discriminating against older workers, on the grounds that pension plans do not give them adequate benefits. Under certain types of pension plans, Mr. Speaker, it is clear that an employer has to contribute larger sums of money for workers who have fewer years of contributions prior to retirement. These contributions draw interest for a shorter period. The employer is frequently concerned about the public relations aspect of retiring a man at 65, who may have worked seven,

eight or ten years for him, with a very modest pension. No employer likes to be in the circumstance of having anyone go on formal retirement, having served even for a short period with his organization, on a pension which is grossly inadequate to sustain that person in a minimum standard of living.
The problem involves a combination of re-examining the different approaches to pensions, in particular having regard to the money purchase type of plan instead of the unit benefit type of plan, removing arbitrary retirement age barriers, and in addition recognizing that a certain proportion of older employees in the labour force of the country does not create any significant addition to payroll costs measured in the aggregate. It also involves examining the particular occupations within the employment force of a firm in which older workers can be more conscientious and more effective.
The Department of Labour has cited a number of interesting examples in which specific employers came to the employment service with age discrimination in mind. One particular case of a records clerk was cited where the turnover had been very serious among younger workers who had taken the job. They took the job for a short period, worked at it, were proficient in their duties but were ambitious and became dissatisfied with the future prospects in that job, and left it in a short time. The older worker who was more anxious to maintain a good attendance and performance record, who did not have an unreasonable or accelerated expectation of promotion and was prepared to take the job and perform it to the best of his or her ability was a much more satisfactory job placement. A re-examination of placement, a re-examination of job requirements and a re-examination of our thinking in terms of how and where older people can be employed is something which has to come, and must in many cases be the really effective means of enforcement. The legislation is prohibitory in the form in which it is suggested. Legislation alone cannot achieve the purpose which the mover of the bill has in mind.


The Acting Speaker (Mr. Batten):: Order. I must interrupt the hon. member to advise him that the time allotted to him has expired.


Gordon Minto Churchill: Mr. Speaker, I want to say a few words on the bill. I was not aware it was coming up today and consequently I do not have with me certain correspondence which would be applicable. It is a rather interesting coincidence that I received in the mail today a letter from a constituent dealing with this very subject. I have to check the facts, of course, and make sure that the submission
Fair Employment Practices Act made to me is accurate, but the correspondence that came to my hand today has to do with a former civilian employee of the Department of National Defence. He has been released from employment and the letter dismissing him contains the phrase "because of your age".
The age of the person dismissed was given to me as being 61. I have no idea whether the Department of National Defence sets an age limit for its employees. I would have assumed that they might consider letting people out at age 65, although I have no knowledge of the actual situation and there is no one here now from the Department of National Defence who could answer the question immediately.
Obviously a bill of this nature is required in order to direct the attention of members of parliament to a problem which exists in our society. If a person may be dismissed on the ground of age without any further reason, and if that age is only 60 or 61 it seems a bit odd at the present time when the government is busy attempting to provide employment for people over the age of 45. If this bill should go to a committee, and I have no desire to delay the proceedings so that it will not be dealt with in that way, I hope to be able to present this specific case to that committee for investigation. It might be of some assistance to the committee in determining whether a bill of this nature is adequate under the circumstances.
It seems to me that it might direct the attention of the government to the activities of the Department of National Defence with regard to their civilian employees and it would be helpful for us to know just what the terms of employment are for those employed in the Department of National Defence. Had I known this bill was coming up today I would have had the correspondence with me and I could have been more specific in my representations. I am pleased that the hon. member for New Westminster (Mr. Mather) has drawn our attention to this problem and I hope that it is given further study.


Mr. Marvin Gelber (York South):: Mr. Speaker, George Bernard Shaw is reputed-


George James McIlraith: Mr. Speaker, if I may interrupt the proceedings at this stage-*


Marvin Gelber: George Bernard Shaw will have to wait.


George James McIlraith: -in accordance with the intimation I gave when we were in committee of supply I would ask the house to be good enough to give unanimous consent to consider a further appropriation bill covering those items of the estimates up to but not including the Department of Justice, which we have passed today. It would include all the items

Ways and Means
that have been passed in committee of supply today. If we could interrupt the proceedings now we would put through that appropriation bill and send it to the other place.


George Clyde Nowlan: We are perfectly satisfied with that, Mr. Speaker, so far as the official opposition is concerned.


Gordon Minto Churchill: May I make one suggestion? In fairness to the hon. member whose bill is before us we should agree that it will hold its place on the order paper, rather than being dropped to the bottom of the list.


George James McIlraith: Yes, I would think that is fair.


Stanley Howard Knowles: Mr. Speaker, I would urge that we either accept the suggestion made by the hon. member for Winnipeg South Centre, or an alternative suggestion which I was just writing out and which I would be prepared to move, seconded by the hon. member for Skeena, namely that Bill No. C-28 be not now read a second time but that the subject matter thereof be referred to the standing committee on industrial relations.
My colleague from New Westminster would be quite happy if that were done and the hon. member for Winnipeg South Centre could then make his representations. I wonder whether that would be acceptable. If so, I would move that amendment, seconded by the hon. member for Skeena, and it need not be debated at all.


John Watson MacNaught: I think the suggestion made by the hon. member for Winnipeg South Centre is the one we will follow.


Stanley Howard Knowles: You will?


Frank Howard: No co-operation at all on that side. It is a two way street, you know.


The Acting Speaker (Mr. Batten):: Order; is it agreed that Bill No. C-28 will retain its position on the order paper?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Batten):: Does the house agree to give unanimous consent now to terminating private members' hour?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Batten):: Will the house also give unanimous consent to reverting to government business?


Some hon. Members:: Agreed.



[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.
[Mr. Mcllraith.l
['Mr. Speaker, in connection with business of the house for Monday, hon. members might be interested in knowing that on Monday\'s order paper under the heading "Introduction of Bills", there will be a bill in my name entitled, "An act to amend the British North America Act 1867 (abolition of the Senate)."']
George James McIlraith: Resolved, that towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1964, the sum of $23,368,648, be granted out of the consolidated revenue fund of Canada.
Motion agree to.
Resolution reported and concurred in.
Mr. Mcllraith thereupon moved for leave to introduce Bill No. C-87, for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1964.


[Stage Direction]
Motion agreed to, bill read the first and second times and the house went into committee thereon, Mr. Batten in the chair.
On clause 1.
['Resolved, that towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1964, the sum of $23,368,648, be granted out of the consolidated revenue fund of Canada.\nMotion agree to.\nResolution reported and concurred in.\nMr. Mcllraith thereupon moved for leave to introduce Bill No. C-87, for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1964.']
Stanley Howard Knowles: I trust the bill is in sufficient form that it can legally be put through?


George James McIlraith: Yes, that is what took a bit of time and is what we have been engaged in checking during the last hour I have been with the law clerks. We were making sure it was.


Frank Howard: Have we got a copy of the bill here?


George James McIlraith: Yes, there is one.


[Stage Direction]
Clause agreed to.
Clauses 2 to 6 inclusive agreed to.
On the schedule.
['Yes, there is one.']
Stanley Howard Knowles: May I ask, does the schedule include all the items of supplementary estimates (E) that we have passed in committee of supply up to the present time?


George James McIlraith: Just those passed today, and the other bill included the others.


Stanley Howard Knowles: That is what I mean; the two bills between them include everything passed up until this time?


George James McIlraith: Yes-that is, unless the committee passed an item in my absence.


[Stage Direction]
Schedule agreed to.
Title agreed to.
Bill reported.
['Yes-that is, unless the committee passed an item in my absence.']
The Acting Speaker (Mr. Batten):: When shall the bill be read a third time; now?


Stanley Howard Knowles: By leave.


George James McIlraith: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



Mr. Speaker:: 
SITTING RESUMED
[Stage Direction]
The house resumed at 6.40 p.m.
Stanley Howard Knowles: Mr. Speaker, may I ask the acting government leader if he can tell us what has happened to the very important bill we passed earlier today, Bill No. C-86?


John Watson MacNaught: I regret, Mr. Speaker, that I am unable to inform the house on that point.


Gordon Minto Churchill: I wonder if the acting house leader could tell us the business for next week while we are waiting?


John Watson MacNaught: On Monday, we will proceed with the consideration of the balance of the supplementary estimates; then, we will take up the second reading of the pension plan bill and after that the budget debate.


Stanley Howard Knowles: Mr. Speaker, in connection with business of the house for Monday, hon. members might be interested in knowing that on Monday's order paper under the heading "Introduction of Bills", there will be a bill in my name entitled, "An act to amend the British North America Act 1867 (abolition of the Senate)."


THE ROYAL ASSENT
[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Supply-Items Passed
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bill:
An act for granting to Her Majesty certain sums of money for the public service for the financial year ending the 31st March, 1964.
It being eight minutes after seven o'clock the house adjourned, without question put, pursuant to standing order.
[The following items were passed in committee of supply this day]:

[Stage Direction]
A-Department-
15e. Grants to municipalities in lieu of taxes on crown-owned defence plants operated by private contractors, $23,100.

[Stage Direction]
Civil service commissionle. Salaries and contingencies of the commission, $131,000.

[Stage Direction]
Payments to municipalities-
45e. Grants to municipalities in accordance with the Municipal Grants Act and regulations made thereunder. $2,800,000.

[Stage Direction]
A-Department-
25e. To sustain technological capability in Canadian industry by supporting selected defence development programs, on terms and conditions approved by treasury board, $5,500,000.
B-Crown companies-
Canadian Arsenals Limited-
35e. Administration and operation, $501,100.

[Stage Direction]
General administration- le. Departmental administration, $61,900.
Administration of various acts and costs of special functions-
Royal Canadian Mint-
30e. Administration, operation and maintenance. $128,600.
Municipal development and loan board-
38e. Administration, $68,000.
Subsidies and other payments to provinces-
40e. Payments, computed in accordance with terms and conditions approved by the governor in council, to the government of each province, in respect of income tax paid by corporations whose main business is the distribution to or generation for distribution to the public of electrical energy, gas or steam; the said payments to be made in respect of such part of the income of the corporations for the taxation year ending in the calendar year 1961 (as determined under and for the purposes of the Income Tax Act) as is derived from the said distribution or generation in the province to which payment is made, $1,600,000.
[Stage Direction]
Supply-Items Passed

[Stage Direction]
le. Departmental administration, $50,000.
War veterans allowances and other benefits-
50e. Assistance in accordance with the provisions of the assistance fund (war veterans allowances) regulations, $100,000.
55e. Treatment and related allowances, $25,000.

[Stage Direction]
General items of payroll costs including superannuation payments-
70e. To supplement other votes, subject to the approval of the treasury board, for the payment of salaries, wages and other pay list charges, $11,000,000.
77e. To provide that, for the purposes of the Public Service Superannuation Act, a person who died during a period ending before February, 1962 in which he was absent from duty without leave, and in respect of whom a death benefit would have been payable had he died under similar circumstances on February 1, 1962, shall be deemed to have been a public service participant throughout the said period, $1.
80e. Government's contribution to the hospitalization (outside Canada) plan, $100,000.
Contingencies and miscellaneous-
56e. To authorize the treasury board to delete from the accounts certain debts due, and claims by, Her Majesty, each of which is in excess of $1,000, amounting in the aggregate to $268,434.88 of which $15,943.01 represents three items that have been carried as assets in the statement of assets and liabilities, $15,945.
67e. To provide that where a person would, except for the fact that he has a period of elective pensionable service to his credit under the Public Service Superannuation Act, be eligible to count the period of elective pensionable service under a pension plan of a public service employer as defined in that act, the person may elect, in a manner prescribed by the treasury board, to receive a return of contributions in respect of the service in lieu of any other benefit payable to or on his behalf in respect of the service, $1.
68e. To authorize the deletion of $531,182,000 from the accounts of Canada, of which:
(a)	$524,849,000 is shown in the accounts as the unamortized portion of the actuarial deficiency in the Canadian forces superannuation account, and
(b)	$6,333,000 is shown in the accounts as the unamortized portion of the actuarial deficiency in the Royal Canadian Mounted Police superannuation account,
and the charge of that amount to net debt as an adjustment in respect of prior year's transactions, $1.

[Stage Direction]
12e. Contribution to Nova Scotia, in accordance with such terms and conditions as the governor in council may approve, in respect of a program of forest stand improvement which will provide employment in Cape Breton, $91,000.

[Stage Direction]
Special-
77e. Estimated amount required to recoup the fishing vessel indemnity account and the lobster trap indemnity account established under vote 540 of the Appropriation Act No. 5, 1955 and vote 527 of the Appropriation Act No. 6, 1956, to cover the net operating losses in the said accounts as at March 31, 1964, $197,000.
70e. Assistance, in accordance with terms and conditions approved by the governor in council, for the construction of fishing vessels in respect of which capital subsidies authorized by vote 222 (Canadian maritime commission) of these estimates may not be paid, $200,000.

[Stage Direction]
B-Unemployment insurance commission-
55e. Transfer of labour to places where employment is available and expenses incidental thereto, in accordance with regulations of the governor in council, $18,000.
50e. Administration of the Unemployment Insurance Act-To extend the purposes of vote 50 of the main estimates for 1963-64 to include a grant of $1,500 to the Canadian association for adult education to assist in defraying the expenses of the national seminar on guidance and counselling held in Canada in November, 1963 and to provide a further amount of, $720,000.

[Stage Direction]
Conservation and development service-
30e. Construction or acquisition of buildings, works, land and equipment, $32,000.

[Stage Direction]
Governor general and lieutenant governors-
5e. To authorize reimbursement to the lieutenant governors of the provinces of Canada of the costs of travelling and hospitality incurred in the exercise of their duties up to a maximum per annum for each as detailed in the estimates-To increase the maximum per annum for each of the lieutenant governors of the provinces detailed in these estimates, $6,000.

[Stage Direction]
Communique of the Federal-Provincial
Conference, Quebec City, 2 April, 1964
The governments of Canada and of the ten provinces of Canada met in Quebec city from March 31 to April 2, 1964. In the spirit of co-operation which had marked their last meeting in November 1963 they continued the discussion of problems of common interest.
The subjects examined included shared cost programs and conditional grants, and the relation of these to fiscal arrangements. There was also an exchange of views on other aspects of fiscal relations.
The federal government outlined its proposals for loans to university students, which were examined at some length. There was also discussion of the effects of the extension of the federal program of family allowances to cover children aged 16 and 17 who are students. Before taking action on the federal proposals, the views expressed by provincial governments will be considered.
The federal proposals for the Canada pension plan were further discussed. The government of Quebec indicated that its proposed plan would be one which could provide portability of benefits with the Canada pension plan, and there was general agreement to ensure the widest possible pension coverage for Canadians.
Future liaison arrangements were discussed, together with a calendar for federal-provincial meetings of various kinds during 1964. Other subjects were: the possibility of extending the hospital insurance program to cover mental health and tuberculosis; the Canadian 1967 world exhibition, in which all provinces indicated their intention to participate; reciprocal arrangements regarding the taxation of government departments and agencies; submarine mineral rights; the proposals of some provinces for further federal assistance to highway construction; and the problem of the distribution of hate literature.
It was agreed that the federal government should immediately enter into detailed discussions with provincial governments concerning contracting-out arrangements for shared cost programs. Such negotiations would apply to programs which are of a permanent nature and which involve fairly regular annual expenditures.
The federal government suggested, and provincial governments agreed, that there should be a joint review of the nature and extent of federal and provincial taxes in relation to the financial responsibilities which nowadays have to be carried by federal and provincial governments. This should be a review in depth, but it ought to be undertaken promptly. In furtherance of this agreement, the conference gave consideration to a proposal to establish at once a tax structure committee, which would work under the auspices of the federal-provincial conference.
This committee would consist of one minister from each provincial government and three ministers from the government of Canada. It would have expert assistance, and would be charged to deliver an interim report before the end of the current year. This interim report would be reviewed at a further federal-provincial conference. The committee would be expected to produce a definitive report by a fairly early date in 1965.
It was agreed that an important purpose of this review would be to increase the range of tax resources available to the provinces, in order to meet their increasing responsibilities for education and other services.
A joint review of the tax structure is not to prejudice the early solution of the urgent financial problems confronting the provincial and federal governments. This will require mutual accommodation to reconcile their expenditure and revenue requirements.
All participants in the conference agreed that their efforts must be directed to finding mutually satisfactory fiscal arrangements to ensure the continued strength of both federal and provincial governments, working together in the interests of a prosperous and united Canada.

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In my opening statement at our meeting last November, I suggested that we should approach that conference as the beginning of a new chapter in federal-provincial relations. At this conference, certainly, we are continuing with the same chapter, but whereas
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the main cross-heading in November was fiscal arrangements for the financial year which is now upon us, today it is shared cost programs; the results of our discussions will be reflected not in 1964 but in 1965 and subsequent years.
I will begin by very briefly summarizing the federal approach to this problem, which I set out on November 26. We believe that in the past shared cost programs have been essential to remove the obstacles created by the uneven fiscal capacity of the provinces and the competing demands on provincial treasuries. These programs have made an essential contribution, I believe, to the economic and social progress of Canada, and to the reduction of regional unevenness in that progress. However, changing conditions-including, above all, the development of our system of equalization of revenues in the shared tax fields-now offer us more alternatives than we had in the past. It is appropriate, therefore, to consider whether some of the shared programs should now be changed, with federal withdrawal and a full assumption of provincial responsibility.
In the first place, what are the programs we are talking about? The general phrase "conditional grants and shared cost programs" covers, as we all know, a great number of varied arrangements between Canada and the provinces. Fundamentally, however, the programs divide into two kinds; one, those which provide current services; two, those which finance capital projects. The prime examples of the first are hospital insurance and the four welfare assistance programs. The capital programs include the trans-Canada highway, ARDA, and the construction of technical and vocational schools.
With capital programs, the expenditures on any one project are for a limited time. In effect, the federal and provincial governments are sharing in building a highway or a dam or the like. When it is built the expenditures stop. Thus, while some of the programs are fairly long term, they are not permanent. Their number and extent depends on a continuing series of decisions. The capital programs therefore are, by their nature, a flexible instrument of federal-provincial co-operation. How many new projects are started, as existing ones are completed, will depend on changing conditions which none of us, I am sure, would claim to foresee.
It may well be that if, as we certainly should hope, economic development over the years results in provincial governments becoming more equal in the relation between their responsibilities and their resources, the need for the federal government to share in the costs of capital projects will diminish.
But that, if it happened, would not be withdrawal from existing programs. It would be a natural run-down, as some programs end without others taking their place. There would be no alteration of commitments and therefore no fiscal compensation involved. Indeed, the concept of tax changes equal in value to the expenditures forgone obviously is not applicable to programs which by their nature involve very different expenditures from year to year.
This run-down of capital projects, as all provinces become more able to finance them for themselves, is a possible and desirable development. But it is not inevitable. We can all imagine economic conditions taking shapes that would make more shared programs necessary. That is to say, the federal government's general responsibility for employment and economic activity in the country as a whole might, in circumstances of slow economic growth, require us to initiate more, rather than less, capital programs jointly with the provinces.
That is not a decision that we in Ottawa should or could ever take alone. Federal power in this field is restricted to taking initiatives, to putting proposals to the provinces. New programs cannot be started unless at least two parties agree to do the sharing. There is, therefore, no question of undertaking such programs without consultation. But, in the general interest of Canada, the federal government should be willing to take the initiative and propose new joint programs if and when economic circumstances require them, even though the general trend is away from such programs.
These, however, are issues for the future; bridges which may have to be crossed at a later date. The present question is, what changes, if any, should be made in the existing shared programs for current purposes?
Provincial governments have been aware for some time of the federal government's general approach. If provinces so wish, we are prepared to consider transferring to them full responsibility for shared programs that involve regular expenditures and are well established. In return we would alter our fiscal arrangements in such a way that the size of the expenditures transferred would be closely matched by the extra room made available for provincial taxes.
Such a change cannot be made by our decision alone. The existing programs are covered by agreements which in the major cases run for several years ahead. For the period of the agreement, we can completely withdraw from the program concerned only if all provinces so wish.
Therefore the only early change that we can make by federal policy, without the

unanimous consent of the provinces, is to allow contracting out. That is to say, the federal government would withdraw in the case of provinces that so wished but maintain the program for provinces wishing it to continue.
Even on this basis, the federal government's freedom of action is limited. Let us take as an example by far the largest of the programs, hospital insurance, which in the fiscal year now beginning is estimated to cost the federal treasury over $400 million. The agreements with each province provide that it will receive 25 per cent of the per capita cost of the program in the province plus 25 per cent of the average per capita cost in all provinces. Thus if one province were to exercise a right of contracting out and then departed from the existing scale of the program, as it operates under the agreement with all provinces, the present basis for calculating cost shares would disappear. Contracting out by one province would alter the amounts due to other provinces under the agreements as they stand.
Accordingly, for this particular program, there is only one kind of contracting out which it is directly in our power to implement, pending renegotiation of the agreements with all provinces. It would be a revision not in the program but in the related fiscal provisions. That is to say, a province that wished to contract out would undertake to continue, for an interim period pending revision of the existing agreements, a program identical with the program provided in all provinces under the agreements. In that event there would be no effect on the federal payments to other provinces. The difference for the contracting out province would be that it would not receive payments from the federal government but instead there would be a financial equivalent in the form of an increased abatement of federal taxes for residents of that province.
This would be, I recognize, a rather rigid kind of contracting out. It must be understood, however, that it is the only kind we can provide without renegotiation of the agreements with all provinces. If such renegotiation is agreed to by all, then of course we can consider a more flexible system now. Alternatively, greater flexibility could be achieved in time by our giving notice at an early date of the federal government's intention to make thoroughgoing changes in the agreements. While the notice period required is lengthy, it would be advisable to consider at this conference whether such action is desirable.
We would propose that the compensation to a province contracting out in this way would take the form of equalized tax room in the
field of personal income tax. The amount would be substantial-for provinces as a whole, of the order of 12 or 13 per cent of personal income tax.
So long as a contracting out province was maintaining the program on the same basis as other provinces, there would be no difficulty in calculating the compensation due. Any difference between the actual amount and the value of the tax room could be adjusted by adding to or subtracting from the province's equalization payments.
We would have to enter into somewhat more complicated arrangements if, following a renegotiation of the existing agreements, the contracting out province made its program different from that provided in other provinces. Actual costs would no longer provide the proper standard for compensation. On the other hand, we recognize that no province would be happy to contract out if it thereby received compensation related only to the cost of the program in the past. Some allowance for escalation of costs would be necessary. On the other hand, there would be unfairness to other provinces if this provision for escalation lasted for more than a few years; furthermore, there would be disadvantage to other provinces if the allowance for escalation exceeded the actual rate of increase in costs in whichever of the participating provinces that rate is lowest.
There are two other aspects of contracting out of hospital insurance which I should mention. First, the federal government would be anxious to assure that any contracting out arrangement would provide continued coverage, on a reciprocal basis, for people who move from one province to another. Second, some very valuable technical co-operation and standard setting has been encouraged by the hospital insurance scheme. Contracting out would remove the direct financial incentive for such co-operation. We would hope that suitable administrative arrangements could nevertheless ensure continuation of the same consultation and co-operation.
I have discussed hospital insurance at some length because it is by far the biggest of the current shared cost programs. Financially, indeed, it alone accounts for more than half oi the programs which could be withdrawn in exchange for the abatement of federal taxes.
The next step, I think, is to hear your views. I have made it plain that the federal government is in principle willing to substitute equalized tax room, in the field of the personal income tax, for its share of hospital insurance. Without unanimous agreement this could not be put into full effect, as a nationwide change, until 1970, after the expiry of existing agreements. If, in the meantime,
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only some provinces want to take over lull responsibility for the program, we are willing to provide for contracting out. I have attempted to analyse what exactly, in this situation, the federal government can itself arrange with a contracting out province, and what would depend on the consent of the provinces as a whole. I am sure we can all see that the problem is complex. Clearly the time for the federal government to make a definite proposal is after hearing your views in more detail.
Before we do that, however, I should refer briefly to some of the other programs. The next most important, taken as a whole, are the assistance programs. Three of these are the so-called categorical programs which provide allowances for disabled people and blind people and old age assistance to those under 70. The fourth program, and of course the most expensive, is unemployment assistance, which operates in practice as something close to a general assistance program.
In my opening statement in November I indicated that, in the federal government's view, any changes in these welfare programs should be based on a review of the four programs as a whole. We cannot see any equitable basis for tax abatement as a substitute for some of the programs, without taking the others into account.
It was agreed at the November conference that there should be a general review of the joint welfare programs, and meetings of officials have since prepared the way for a conference of ministers of welfare which has been proposed for May. I suggest that it would be premature, meantime, to discuss contracting out arrangements for those programs.
There are, however, a great many smaller programs which we are ready to discuss now. The forestry programs, for example, were recently continued for one year. We would propose to extend them for a further two years-that is, for three more years in all. At the end of that time our present fiscal arrangements will be revised in any event. If, for the further two years, some provinces wish to contract out of the forestry programs, that can be arranged, with compensation to be paid in cash as a supplement to equalization payments.
The health grants are, in our view, a program of continuing value which we wish to sustain. We propose to go on offering them to provinces which so wish. We are, however, prepared to consider alternative arrangements with provinces which would prefer to contract out.
Before leaving the subject of health I should mention the hospital construction grants, although they are of a capital rather than a
current nature. They have been a very valuable program in the past, but we believe that they will pretty well have achieved their purpose by the time existing commitments come to an end. That will be in 1968. Any province which wishes to contract out meantime should be able to do so.
There are some smaller programs which we are disposed to terminate, with due notice of course, and others for which contracting out with compensation can be arranged. However, I think that the next step in our discussion today should be a general exchange of the views of all the premiers. We are all aware, I am sure, that this is a complex subject. The approach that I have suggested, looking at the principal programs one by one, appears to provide the best way of making practical progress. The programs are too varied to lend themselves readily to discussion in principle.
This program by program approach should not, however, obscure the broader objective. There may be various criticisms of particular programs, but those criticisms in themselves are not so substantial as to require discussion at the level of this conference. The underlying reason for our discussion is the growing belief that, provided there is adequate equalization, services provided by the provinces should be paid for by taxes which the provinces raise. I do not think anyone quarrels with that principle. Certainly the federal government does not. The problem is how to apply it equitably. There are great practical difficulties in assessing compensation for existing programs on a basis that is fair to all provinces. I have outlined one approach. I do not say that it is certainly the best. When we have heard your views we may want to make other suggestions.
For example, it would be possible to consider, instead of the program by program method, what might be called a linear approach. By that I mean the rewriting of existing agreements so that the percentage of the federal contribution to the whole range of shared cost programs would be gradually reduced over a period of years. That might provide a more satisfactory basis for calculating the degree of abatement of federal taxes that would be fair compensation for all provinces; the abatement would, of course, be phased to go along with the reduction in federal costs.
I mention this alternative to suggest that we should none of us enter this discussion with closed minds. We are examining the future of programs which have, on the whole, served well in the past. Our aim now is to find out whether, with changing conditions, there may
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not be even better ways of doing things. There are few devices so good that they do not in time require re-examination. But it should not be a re-examination in which we deal only with pressing immediate problems.
It should be a re-examination based on a look at the future and a full regard for the considerations which will truly maintain and strengthen the unity of our country in the years ahead.
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Monday, April 6, 1964