1964-05-06

QUESTIONS

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

Mr. Pascoe: 1.	With reference to the plan to provide interest free loans to university students, when will a graduate student be expected to begin repayment of such loan?
2.	Will recipients of such loans be required to make interest payments after graduation and, if so, when will such payments begin?


Mr. Benson:: 1 and 2. This is a matter of government policy which will be announced when the legislation is introduced in the house in the near future.


TARIFF BOARD RULING ON EDIBLE OILS
Mr. Danforth: Has the tariff board made a ruling on the representations of the Ontario soya bean board and other interested parties in respect to the increase in Canadian tariff on edible oils entering this country and, if so, what was that ruling?


Edgar John Benson: The tariff board has heard representations on the Canadian customs tariff on edible oils; its report has not yet been received by the Minister of Finance.



* BANK OF CANADA


Mr. Cole (Chicoutimi): 1.	What is the aggregate amount of foreign currency convertible into gold upon demand, held or accepted by the Bank of Canada as a result of exports, which has actually been converted into gold during the last five years?
2.	From what countries did the currency come?


Edgar John Benson: 1. Canada's reserves of gold and foreign exchange are not held by the Bank of Canada for its own account. They are held by the Bank of Canada for the Minister of Finance in the exchange fund account. Generally speaking all official purchases and sales of gold and foreign exchange are made through this account.
Over the five years to December 31, 1963, the exchange fund account purchased U.S. $40.7 million worth of gold for which payment was made in foreign convertible currency.
2.	Apart from small working balances held in a variety of currencies, Canada's receipts
of foreign exchange from whatever source are converted into gold or U.S. dollars. For this reason, although the gold purchase mentioned in 1 was paid for in U.S. dollars, it is impossible to attribute the currency used in that payment to a particular transaction with a particular country.



C.N.R. CAR SHOPS, MONTREAL

Mr. Millar: 1.	How many shifts presently are being worked in the Montreal car shops of the C.N.R.?
2.	How many shifts were employed there (a) in 1954 (b) in 1958 (c) in 1960?
3.	What was the wage bill for overtime, if any, paid in each of these years and in 1964 to date?
4.	What was the reason for the increased work load if any, in each of these years and in 1964 to date?
5.	How many employees were engaged on each shift during each of these stated years and during 1964 to date?


Mr. Pickersgill:: The management of Canadian National Railways advises as follows:
1.	Three per day.
2.	(a) (b) and (c) three per day.
3.	For 1954,	1958 and 1960 negligible
(approximately 0.6 per cent). For 1964 thus far nil.
4.	No increase.
5.	Year	Total employees
1954	1,476
1958	1,334
1960	1,300
1964 to date	1,200
Number of employees per shift varies, but has remained at approximately 83 per cent first shift, 12 per cent second shift and 5 per cent third shift each year.



C.N.R. CAR SHOPS, LONDON, ONT.

Mr. Millar: 1.	What is the C.N.R.'s estimated investment in car shop machinery and buildings in London?
2.	What is the C.N.R.'s estimated over-all investment in plant and machinery at London?
3.	What has been the C.N.R.'s capital outlay (a) for new buildings (b) for new machinery, at Montreal car shops since 1954?
4.	What was involved in such expenditure for each of the years since 1954 to date?


John Whitney Pickersgill: The management of Canadian National Railways advises as follows:
1.	$1,390,000 depreciated to scrap value.
2.	Answered by No. 1.
3.	(a) $832,000; (b) $117,800.

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4.	The expenditures covered the construction of a grit blast plant, a dry kiln, lubricator reclamation building, welding equipment, tanks, journal bearing machines and various small units of machinery for the shops.



C.N.R. CAR SHOPS, LONDON  DATE OF CLOSING

Mr. Millar: 1.	What is the latest target date ot the C.N.R. management for closing down the car shops at London?
2.	What new employment opportunities does the C.N.R. envisage for London car shop employees facing unemployment?
3.	What additional job prospects are there for displaced London employees (a) at Montreal (b) at the new Toronto hump yard and when are such prospects likely to materialize?
4.	What assistance, if any, does C.N.R. management extend to displaced employees in effecting the transfer of families or household furnishings to such jobs elsewhere?


John Whitney Pickersgill: The management of Canadian National Railways advises as follows:
1.	By July 1966.
2.	Where applicable, employees may exercise their seniority rights and the railway will make every effort to find alternate employment for men who may be affected.
3.	Job prospects at Montreal will be available with transfer of work. The prospects at the new Toronto hump yard will be available in the spring of 1965.
4.	The company has offered the employees who will go with the transfer of work their pay while moving and out of pocket expenses covering meals, berths, and a free freight order on the movement of their household goods.



C.N.R. CAR SHOP PAYROLL, LONDON, ONT.

Mr. Irvine: 1.	What was the estimated payroll of car shop, employees of the Canadian National Railways, London, Ontario, before the decision to shift London work and personnel to Montreal?
2.	What have been the successive reductions in the London car shop payroll as work and personnel were transferred to Montreal?


John Whitney Pickersgill: The management of Canadian National Railways advises as follows:
1.	$180,000 per month.
2.	One reduction, $63,000 per month.



C.N.R. CAR SHOPS, LONDON, ONT.    REASONS FOR TRANSFER

Mr. Irvine: 1.	Was the decision of the Canadian National Railways management to transfer car shop operations from London to Montreal based upon actual dollar estimate of economies to be effected and, if not, what dictated the decision?
2.	If there were such an estimate, what was the actual figure so computed?
3.	What was the per unit cost of the work being done in London, Ontario, before the transfer decision was made?

4.	What was the per unit cost of the work being done in Montreal (a) in 1958 (b) in 1960 and (c) in 1964?
5.	What yardstick does the Canadian National Railways use in compiling per unit cost and what are the cost components?
6.	In computing present per unit costs at London, Ontario, has allowance been made for the fact that overhead costs remain virtually constant although work-force and work load have been reduced?


John Whitney Pickersgill: The management of Canadian National Railways advises as follows:
1.	Yes.
2.	$900,000 per year. Excess repair capacity exists on C.N.R. system. Savings based on elimination of administrative and overhead expenses.
3.	Not applicable.
4.	(a), (b) and (c), not applicable. Unit costs vary with class and type of work, and not directly comparable between shops.
5.	Standard cost accounting methods. Direct labour and material.
6.	See answer to 5.



C.N.R. CAR SHOPS, LONDON, ONT.    TRANSFER OF WORK AND EMPLOYEES

Mr. Irvine: 1.	When did the Canadian National Railways management first decide to remove car shop repair work from London, Ontario, to Montreal?
2.	Was this a decision to phase out and ultimately cease such work at London and, if so (a) what was the timetable (b) how many such stages have been completed, and (c) to what extent was the work at London reduced at each stage?
3.	How many C.N.R. car shop personnel were employed at London before any shift to Montreal began and how has this work force been reduced by successive work transfer to Montreal?
4.	What is the present strength of Canadian National Railways car shop personnel at London?
5.	How many employees actually have been transferred (a) to Montreal (b) to other railway centres?
6.	How many refused to leave London and of these how many have been given other employment within the Canadian National Railways?


John Whitney Pickersgill: The management of Canadian National Railways advises as follows:
1.	1958.
2.	Yes. (a) Passenger repairs in 1960; freight repairs in 1966. (b) One. (c) $63,000 per month.
3.	497.
4.	271.
5.	(a) 38, (b) 31.
6.	48 and 25.



* COMMITTEE ON SCIENTIFIC RESEARCH

Mr. Orlikow: Is the government giving consideration to the establishment of a parliamentary committee on scientific research (like the committee on defence) which could hear representations from government departments involved in research, the national research council, the universities, and organizations such as the Canadian Association of Physicists, the Chemical Institute of Canada, the Engineering
MAY e, 1984
Institute of Canada, the Canadian Medical Association, the Canadian mathematical congress, the Canadian Federation of Biological Societies, and the Royal Society of Canada, as to what program of scientific research is required in Canada in order to develop a program adequate to meet Canada's needs in this technological age?


Mr. Davis:: The government has considered the advisability of establishing a parliamentary committee on scientific research. However, it is now of the view that such a committee could more usefully be set up when the scientific secretariat, now being organized in the privy council office, has had an opportunity to assemble and analyse the necessary information regarding government and other research activities in this country.



* SALES TAX ON STEEL RULE CUTTING AND CREASING DIES

Mr. Irvine: 1.	Did the Prime Minister and the Minister of Finance receive pre-budget representations from the Canadian paper box manufacturing association asking for removal of the sales tax on steel rule cutting and creasing dies?
2.	What consideration was given to these representations in light of the fact that these dies are short-lived and quickly scrapped?
3.	What are the reasons for retaining the sales tax on these dies in such a highly competitive industry?


Mr. MacNaughl:: 1. Yes.
2.	This representation and many others were carefully considered during the preparation of the budget.
3.	The decision was reached, as announced in the budget speech, not to recommend any changes in the Excise Tax Act this year.



INTEREST ON NATIONAL DEBT

Mr. Watson (Assiniboia): What was the total amount of interest paid on Canada's national debt in the year 1963 and, of this amount, how much was paid to what banks and companies?


Edgar John Benson: Total amount of interest paid on Canada's national debt in the calendar year 1963 was $623,707,577.16. No information is available as to what corporations and individuals own coupon bonds. It is not in the public interest to reveal to whom interest is paid on fully registered bonds.



CONSUMER PRICE INDEX

[Stage Direction]
Question No. 775
Mr. Crouse:: 1.	Is the consumer price index, which at the beginning of March was 134.6, the highest in this nation's history?
2.	Does the government consider present economic conditions in Canada to be of an inflationary nature and, if so, are any measures to be adopted to control such inflation?


Edgar John Benson: 1. Yes.
2.	(a) No. (b) Answered by 2(a).
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*	ADDITIONAL ASSISTANCE FOR ESKIMOS AND



INDIANS IN LABRADOR

[Stage Direction]
Question No. 783
Mr. Granger:: 1.	Between June 21, 1957, and April 22, 1963, did the Minister of Citizenship and Immigration receive any communication requesting additional federal assistance for the Indians and/or Eskimos in Labrador and, if so, on what dates?
2.	What reply was given to any such request for assistance?


Mr. Badanai:: 1. Yes. Departmental files contain copies of letters dated March 26, 1959, April 14, 1959, October 6, 1959, October 23, 1959, December 29, 1960, March 16, 1961, June 1, 1961, October 3, 1961, March 23, 1962, and May 17, 1962.
2.	The replies indicated that this matter was under consideration.



EASTERN D.E.W. LINE SUPPLY CONTRACT

['Order, please.']
John Whitney Pickersgill: Originally, public tenders were called on a several year basis. On the completion of some of these contracts extensions were negotiated particularly for ice strengthened vessels. The balance of shipping required is done on an annual tender call basis.



Mr. Macquarrie: 1.	When is the expected completion date for the second dock at the ferry terminal at Borden, Prince Edward Island?
2.	What was the original target date for completion and, when was the project commenced?
3.	What factors caused the delay in construction?
4.	What is the estimated cost of the project?
5.	What amount has so far been expended?
6.	How many regular crossings per day will be made by the M.V. Confederation during the summer season of 1964?
7.	When is the M.V. Abegweit expected to return to service?


Mr. Deschalelels:: 1. About June 20, 1964.
2.	Specified completion date, June 5, 1964. (work commenced May 2, 1963)
3.	A considerable quantity of the steel sheet piling delivered for use in this work was damaged during shipment to site and reorder of this material was necessary. Poor construction weather also delayed the work.
4.	Estimated cost $1,221,510.
5.	Expenditure to date $547,199.01.
6.	The MV Confederation will make seven daily trips each way during the summer season of 1964.
7.	The end of May 1964.
*	APARTHEID-STATEMENT BY MR. WESTON


Mr. Knowles: 1.	Has the attention of the Prime Minister been called to remarks in defence of South Africa's

Questions
policy of apartheid reportedly made by Mr. W. Garfield Weston of George Weston Limited of Toronto?
2.	Is the government examining the question of government purchases from this company?


John (Jack) Davis: 1. Yes.
2. No.


DREDGE 116 AND TUG &quot;HERCULES&quot;
[Stage Direction]
Question No. 846
Mr. McBain:: 1.	On what date was dredge 116 and the tug Hercules as well as other equipment in this connection turned over by the Department of Public Works to Crown Assets Disposal Corporation for disposal purposes?
2.	Were tenders called by Crown Assets Disposal Corporation on (a) the tug Hercules (b) dredge 116?
3.	What were the names and addresses of the persons or firms tendering on the above, who were the successful tenderers, and on what prices were their tenders accepted?
4.	Was dredge 116 sold to be scrapped, or will it be used in dredging operations by its new owner?
5.	Will dredge 116 be replaced by new equipment owned by public works?


Mr. Drury:: 1. January 10, 1964.
2.	(a) Yes; (b) yes.
3.	Tug Hercules:
The successful firm tendering was: Ver-reault Navigation Inc., Les. Mechins, Cte. Matane, Que., $3,350.
The following also submitted tenders: Lee Marine Ltd., Leeland Gardens, Port Lambton, Ontario; Courageous Sailing Club, per E. J. Harten, 584 Cayley Drive, London, Ontario; Marine Salvage Ltd., 170 Welland Street, Port Colborne, Ont.; F. McMillan, R.R. No. 2, Port Lambton, Ont.
Dredge 116:
The successful firm tendering was: Ver-reault Navigation Inc., Les. Mechins, Cte. Matane, Que., $6,550.
The following also submitted tenders: Lee Marine Ltd., Leeland Gardens, Port Lambton, Ont.; The J. P. Porter Co. Ltd., 806 Dominion Sq. Bldg., Montreal; Marine Salvage Ltd., 170 Welland St., Port Colborne, Ont.
4.	The sale was made without condition and the use to be made by its new owner is not known.
5.	The answer of the Minister of Public Works in so far as this part of the question is concerned is no.


STRENGTH OF ARMED FORCES
Mr. MacRae: 1.	What was the total strength of the navy, army, and R.C.A.F. at March 31, 1964?
2.	What is the target date for complete integration of the armed forces?
3.	What is the estimated strength of the armed forces when integration is complete?


Mr. Hellyer:: 1. 120,781.
2. Three to four years.

3.	It is not possible at this time to anticipate the total personnel strength of the armed forces when integration is completed. For interim planning purposes a reduction of 10,000 has been set.


DEFENCE DEPARTMENT SCHOOLS OVERSEAS
Mr. Enns: 1.	How are appointments made to D.N.D. schools
overseas?
2.	What province's curriculum is followed in these schools?
3.	Are teachers from that province given preference in the D.N.D. schools overseas?
4.	How many D.N.D. schools are there (a) in Europe (b) in other countries?
5.	How many principals have been appointed in the last ten years, and in which province were they employed prior to their overseas appointment?


Mr. Cardin:: 1. Principals, teachers, inspectors and superintendents are obtained for D.N.D. schools overseas through the co-operation of many school boards across Canada.
2.	From kindergarten to grade 6 a composite curriculum derived from all provincial courses is used in order to minimize the difficulties involved in the movement of personnel from various provinces of Canada to overseas schools and on return to Canada. From grade 7 to 13 the province of Ontario curriculum is followed so that pupils can qualify for the certificates and diplomas granted by the Ontario department of education to those who successfully complete the examinations while overseas.
3.	Other factors being equal preference is given to Ontario teachers assigned to academic teaching at the grade 11, 12 and 13 level. Previous experience in preparing pupils to write the annual examinations set by the Ontario department of education for these grade levels has proved to be an important factor in maintaining a consistently high percentage of successful papers written by students in the D.N.D. schools overseas. For all other grade levels and vocational assignments at any level there is no provincial preference governing selection of the teaching staff.
4.	(a) 21 in Europe; (b) 93 in Canada.
Nova Scotia	3
Quebec	5
Ontario	28
Manitoba	5
Saskatchewan	8
Alberta	8
British Columbia	22
Yukon	1
Northwest Territories	1
Total	81


PROPOSED REDUCTION IN STRENGTH, ARMED FORCES
Mr. MacRae: 1.	What is the estimated reduction of personnel in the R.C.A.F. as a result of the proposed integration of the armed forces?
2.	What is the estimated reduction of personnel in the navy as a result of the proposed integration of the armed forces?
3.	What is the estimated reduction of personnel in the army as a result of the proposed integration of the armed forces?


Paul Theodore Hellyer: 1, 2 and 3. It is not possible at this time to anticipate the total personnel strength of the armed forces when integration is completed. An interim planning figure of a reduction of 10,000 has been set but this has not been broken down by navy, army and air force.


CHARTERED BANK PROFITS
Mr. Dionne: What were the gross and net profits of Canadian chartered banks in each of the years 1960, 1961, 1962, and 1963?

Answer: This information for the undernoted fiscal years of the banks was laid before parliament on the following dates:	1960,
February 10, 1961; 1961, February 9, 1962; 1962, January 21, 1963; 1963, February 18, 1964.
It also appears at page 83 of the February 1964 issue of the Bank of Canada statistical summary.


REDUCTION OF CIVILIAN PERSONNEL, DEFENCE DEPARTMENT
Mr. MacRae: What is the estimated reduction of civilian personnel in the Department of National Defence as a result of integration of the armed forces?


Paul Theodore Hellyer: It is not possible at this time to anticipate the total estimated strength of civilian personnel in the Department of National Defence when integration of the armed forces is completed.


COST OF LAND FOR HOUSING PROJECT, MALVERN, ONT.
Mr. Brewin: 1.	What was the cost to the government of Canada and to the province of Ontario of the acquisition in 1953 of farm lands in the township of Scarborough in the neighbourhood of Malvern under a joint housing development program?
2.	What was the total sum of money paid out to farmers who owned the lands expropriated for the purpose?
3.	What housing developments, if any, have taken place under the project?
4.	What is the present use of the land?
5.	What has been the cost in interest and otherwise of the lands and what receipts have the government of Canada or the province of Ontario secured from the expropriated lands?
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6.	Have any of the lands expropriated under the program been sold and at what prices?
7.	If no serious development has taken place or is contemplated in the near future, what do the government of Canada and the government of Ontario propose to do with the lands in question?


Mr. Nicholson:: 1. $2,396,223, including legal, survey and sundry charges.
2.	$2,001,420, excluding voluntary purchases.
3.	The lands have not yet been developed.
4.	Approximately 1,600 acres are rented for farming purposes. The remainder is not being used at the present time.
5.	Accrued interest to March 31, 1964, $765,070. Legal survey and sundry charges, $77,411. This amount is included in the answer to 1. above. Net recovery from rental of land and buildings, $93,401.
6.	The following parcels of land of the total acreage acquired have been sold: board of education, township of Scarborough, 6.028 acres, $15,070; the metro Toronto and regional conservation authority, 5.752 acres, $1.
In addition, lease-purchase agreements have been signed as follows:	Canadian
Pacific Railway, 1.443 acres, $3,607, Consumers Gas Company, .286 acres, $1,000.
7.	It is intended to make this land available for urban development as soon as the necessary municipal trunk services reach the area. Plans for a comprehensive neighbourhood will be prepared at the appropriate time. Land will be set aside for community facilities and for public housing projects to accommodate families of low income.


ST. SIMEON, QUE.  MAIL CONTRACT
Mr. Belanger: 1.	Who has the contract for carrying mail from the landing stage on the wharf at St. Simeon to the St. Simeon post office?
2.	What compensation is paid in respect of this contract?


John Robert (Jack) Nicholson: 1. Mrs. Leopold Lapointe.
2. $1 per trip (about $81 per year).


SUBSIDIES TO CLARKE STEAMSHIPS LTD.
Mr. Belanger: 1.	Does Clarke Steamships Ltd. receive government subsidies for its operations?
2.	If so. what is the total amount of the subsidies, and what is the amount of each category?

Answer: The Canadian maritime commission advises as follows:-
1.	Clarke Steamship Co. Ltd. receives subsidies for the operation of two steamship services.
2.	The amount of subsidies paid in 1963-64 was $430,000 for the operation of the service

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Quebec, Natashquan and Harrington operating between Montreal and Blanc Sablon, and $35,000 for the winter service entitled Murray Bay or Rimouski and north shore of St. Lawrence river ports operating between Quebec and Havre St. Pierre during the winter months.


DISCHARGE OF SEWAGE INTO WATERWAYS
Mr. Sienson: 1.	Has the Department of Transport legislation which provides for the control of the discharge of sewage from boats on our waterways and, if so, who in the department has authority to enforce these regulations?
2.	Has the department received a letter from the Otonabee region conservation authority on this matter and, if so, what action does the department intend to take?


John Whitney Pickersgill: 1 and 2. No.


VETERANS HOSPITALS, QUEBEC
Mr. Laiulippe: 1.	What is the number of veterans hospitals in the province of Quebec?
2.	By whom and in what manner are those hospitals administered?


Mr. Teillet:: 1. Three.
2. By Department of Veterans Affairs.


GRANTS TO MULTIPLE SCLEROSIS SOCIETY
Mr. Latulippe: 1.	Has the Department of National Health and Welfare made any grants to the multiple sclerosis society of Canada for research purposes and, if so, what were the amounts paid in each of the last three years?
2.	If no such grants were made, are there reasons to prevent the department from making such contributions?


Miss LaMarsh:: 1. Under the national health grants, no grant has been made during the last three years to the multiple sclerosis society of Canada for research purposes but grants were made available at provincial request for research into this disease at the following universities:
(1)	Queen's University, Kingston: 1981-62, $15,455; 1962-63, $12,325; 1963-64, nil.
(2)	University of Manitoba, Winnipeg: 1961-62, $6,517; 1962-63, $5,703; 1963-64, nil.
2. If research projects are submitted under the national health grants by the multiple sclerosis society of Canada, through the provincial departments of health, they will receive immediate study under the terms of the annual order in council, the latest of which is P.C. 1964-19/559.
^'DEPORTATION ORDERS, MENTALLY ILL IMMIGRANTS


Mr. Cameron (High Park): 1. When misfortune befalls a landed immigrant requiring temporarv admittance to a mental hos-

pital, does the Department of Citizenship and Immigration issue an order for deportation to the immigrant's country of origin?
2.	When the immigrant regains his health and he is at no time a charge to the state and is allowed to remain in Canada, and he applies for citizenship, does the order of deportation prevent him from qualifying?
3.	How long has he got to wait before the order of deportation is removed?
4.	Is there any discretionary power vested in the minister, deputy minister, or in any other official of the Department of Citizenship and Immigration to remove a deportation order?


Hubert Badanai: 1. Section 19 (1) (e) (iii) of the Immigration Act requires that a report be submitted to the director of immigration on any person, other than a Canadian citizen or a person with Canadian domicile, who among other things becomes an inmate of an asylum or hospital for mental diseases. The director may, if he considers such action warranted, order that an immigration special inquiry be held to determine whether the individual is subject to deportation. If an inquiry is not ordered, the individual retains his status and may acquire citizenship in due course. Should an inquiry take place and deportation be ordered, the Minister of Citizenship and Immigration may suspend deportation and allow the person concerned to stay in Canada under special authority. Rarely is anyone deported because of mental illness unless it is clearly in his interest to be returned to his own country.
2. With the issuance of a deportation order, the process of acquiring Canadian domicile automatically ceases and, without domicile, an individual is not eligible to qualify for Canadian citizenship. The passage of time does not affect the validity of a deportation order and so long as the order remains in force, the individual cannot qualify for citizenship.
3 and 4. Neither the Minister of Citizenship and Immigration, the deputy minister nor any other official of the department has any discretion to cancel or quash a deportation order properly based on provisions of the act, although the minister may direct at any time that an inquiry be reopened for the purposes of receiving any additional evidence which could affect the special inquiry officer's original decision. Unfortunately, as the Immigration Act now stands, it is not possible to reinstate the landed immigrant status of a person ordered deported on mental grounds even though he may have recovered. This is one of the problems which is to be dealt with in the revision of the Immigration Act.


ABANDONMENT OF N.Y.C. CANADIAN SUBDIVISION
Mr. Danforth: Has an application been received by the Department of Transport from the New York Central

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Railroad Company in regard to partial or complete		1963		Bushels
abandonment of the	Canadian subdivision either			
now or in the future?		it	13	374,000


John Whitney Pickersgill: 
John Whitney Pickersgill: The national harbours	a	13	285,533board advises as follows:	a	14	231,0001. July 27.	a	15	179,6672. October 20.	a	16	497,0003. (a) 48.	n	17	501,533tt	18	449,667No. of	a	19	418,267(b) Flag	vessels	a	20	460,200Yugoslav	4	tt	21	44,933British	15	(<	22	322,000Swiss	11	tt	23	380,867Norwegian American	4 1	(<	24	438,632Dutch	4	tt	25	454,114German	3	it	26	440,667Greek	1	n	27	424,733Liberian	2	a	28	385,600Lebanese	1	tt	29	461,120Italian	2	tt	30	217,0004. 1963	Bushels	Oct.	1	399,000July 29	380,800	((	2	380,800" 30	366,000	ii	3	311,667" 31	437,333	Aug. 1	360,266	4	268,000" 2	365,533	it	5	109,133" 3	160,000	it	7	396,333" 5	194,333	it	8	211,267" 7	372,000	it	10	377,500" 8	394,936	" 9	521,533	it	11	64,900" 10	454,333	ii	18	563,370" 11	355,133	it	19	61,173" 12	396,667	ii	20	43,000
2974

Questions


SERUM FOR LEUKEMIA
Mr. Lalulippe: 1.	What food and drug regulations would have to be met by biochemist Gaston Naessens before he can undertake clinical tests and the distribution of his anablast serum?
2.	What tests are required to establish the value and safety of this drug?
3.	Are any federal government employees investigating this case and, if so, what is the name, title and qualifications of each?
4.	Do food and drug officials hold consultations with Canadian specialists, or do they follow the recommendations of the medical boards throughout Canada?
5.	Who is responsible for taking the final decision in such a case?
6.	Can an appeal be made against the department's decision in such a case and, if so, what procedure should be followed?
7.	If no appeal can be made what regulations prohibit such appeal?
8.	Will the government give consideration to the referral of the matter to the special committee on food and drugs?


Julia Verlyn (Judy) LaMarsh: 1. Control of the sale or distribution of new drugs is provided by sections C.08.001 to C.08.009, inclusive, of the food and drug regulations. The general distribution of a new drug may not be undertaken until the requirements of section C.08.002 are met. Limited distribution to qualified investigators for the sole purpose of clinical testing may be undertaken only when the manufacturer has filed with the food and drug directorate of the Department of National Health and Welfare a preclinical submission in satisfactory form and content containing the information prescribed by section C.08.005.
2.	Tests to establish the value and safety of a drug are required both before and during clinical investigation. Before clinical investigation may be undertaken, a manufacturer is required by section C.08.005 of the regulations to provide, amongst other data, information concerning the results of investigations made to support the clinical use for the new drug, contraindications and precautions known in respect thereof and the suggested treatment of overdosage, concerning methods, equipment, plant and controls used in the manufacture, processing and packaging of the drug, detail of tests applied to control the potency, purity and safety of the drug, as well as the name and qualifications of investigators to whom the drug is to be distributed and the names of all institutions in which it is proposed further investigations be carried out.
3.	Since no formal preclinical submission has been filed to date with the food and drug directorate of the Department of National Health and Welfare on a preparation designated as anablast serum, no formal investigation of the case has been made by the department.
4.	The officials of the food and drug directorate frequently hold ad hoc meetings with

Canadian specialists. In addition the Canadian drug advisory committee is consulted on matters concerning drugs.
5.	The Minister of National Health and Welfare is responsible for the final decision as to whether the manufacturer of a new drug has complied with the regulations.
6 and 7. The sections of the food and drug regulations dealing with new drugs, as part of the over-all food and drug legislation, is legislation in the field of criminal law and the prohibitions contained therein are statutory prohibitions, the violation of which may lead to prosecution. Decisions of the minister in respect thereof are therefore subject to test through the normal process of law.
8.	Until more information is available on anablast serum no decision can be reached as to whether it would be an appropriate subject for referral to the special committee on food and drugs.


REPORT ON GENEVA TRADE CONFERENCE
Mr. Lalulippe: 1.	Has the Minister of Trade and Commerce received an interim report from the international conference on trade in Geneva and on the position of the Canadian representatives regarding the problems being studied at this conference?
2.	If so, what are the main features of the report?

Answer: 1. The United Nations conference on trade and development has been going on for a little more than a month and is supposed to end on June 15. During the first days, the ministers made general statements outlining the position of their respective countries on the main proposals placed before the conference. Five committees have been set up and are now considering those proposals after which they will make recommendations to the conference sitting in plenary meeting. It is expected that the conference will end with another meeting of the ministers.
2.	Consideration is now being given to the numerous and varied proposals which were made to improve the trading position and the economic growth of underdeveloped countries. Up until now, the discussions indicate that, on the whole, participating countries are in favour of those objectives. However, there is disagreement on the approach to take concerning certain proposals and it will be difficult to reconcile the various points of view during the next few weeks.
3.	Canada has been elected as one of the vice chairmen of the conference and our delegation plays an active and, I feel, a constructive role in the proceedings of the various committees. Canada's position was set out in a statement I made during the ministerial

meeting at the opening of the conference. The text of that statement is as follows: Following is the text of a statement by the Secretary of State for External Affairs, the Hon. Paul Martin, to the United Nations conference on trade and development in Geneva on Tuesday, March 24, 1964.
I wish to begin by congratulating you upon your election as president of this conference. I am confident that you will guide our deliberations over *the next few weeks toward constructive solutions on the many difficult and complex questions before us.
We are faced today with one of the great opportunities of the twentieth century. Throughout the world, governments and peoples expect this meeting to make definite progress toward a goal which each nation shares-the greater welfare of its people. We must never lose sight, in the long and complex debate, of the urgency of our responsibilities.
All of us recognize that this is an historic Conference. It is unprecedented in the breadth of participation and the nature of its objectives. The ability of our United Nations to respond to the needs of member countries is once again being tested. In recent weeks the United Nations and its member governments have been preoccupied with the organization's peace keeping role-and specifically with the critical situation in Cyprus. During this crisis, Canadians have, as our Prime Minister has said, been proud to play their full part once again. Mr. President, Canada can also be counted on to respond in those areas which are the objectives of this conference. We recognize that prosperity and stability are indivisibly linked.
Since its foundation, the United Nations has played an important and constructive role in the vital sector of economic and trade co-operation among nations. Member countries have joined together to dismantle the barriers to world trade with the aim of ensuring the best use of the world's resources and raising the living standards of the world's peoples. In the interests of expanding world trade, rules have been fashioned as safeguards against the restrictive and discriminatory practices of the past. The General Agreement on Tariffs and Trade, the international monetary fund, the international bank and other United Nations institutions were set up to buttress the new framework of world trading relationships. This new and more liberal trade system has brought benefits to all the countries of the world. No country is more indebted to these accomplishments than my own, which is so vitally dependent on foreign trade. Canada supports the preservation and development of the basic trade rules and institutions which have been fashioned over the past two decades.
A great co-operative endeavour over the past two decades has been the economic development of new countries and countries seeking to reach new economic and social goals. The United Nations and its agencies have not only aroused world support for these efforts, but have also given us many of the tools to work with. Massive resources have been transferred by way of aid directly and through international agencies to reinforce even greater efforts of the developing countries themselves. That the efforts of these countries are bound to be paramount was emphasized yesterday in your own speech, Mr. President, when you pointed out that in this "endeavour for rapid economic growth to offset the increase in population and to keep up with the development
Questions
trends in advanced countries, the developing countries bear the main responsibility for their economic and social progress''. The same point was made by the present Prime Minister of Canada some years ago when he was speaking of the role of external aid. He went on, however, to develop this point in the following way: "The fact that external aid may often be marginal does not, however, make it unimportant. Many a garment might unravel if it were not for the hem. In much the same way, the fabric of economic and social life in many of these countries is strengthened by the function which outside assistance performs and by the evidence which it brings of widespread interest, sympathy and support."
Since the war Canada has made substantial contributions to international development efforts. From the start Canada actively encouraged the formation of United Nations programs and we backed up our support with substantial contributions. We were among the founding members of the Colombo plan in 1950 and since then we have annually transferred Canadian resources to countries in South and Southeast Asia, and more recently to Africa and countries in the Caribbean area. Through Canadian and United Nations programs we have provided substantial development resources, by far the greater part of which has been on a grant basis requiring no repayment.
The Canadian aid effort is part of a broad cooperative endeavour to hasten economic and social progress throughout the world. My government recognizes both the new sense of urgency behind this endeavour and the growing determination to achieve development goals. We have therefore decided to increase Canada's economic aid by more than one half. Our expanded effort includes a new program of long term loans on liberal terms. We expect our aid expenditures during the next months to reach $180 to $190 million.
Until recently the main emphasis in international arrangements has been to promote economic development through financial and technical assistance. We must now add another dimension to the great effort to support economic development. We must examine how trade can make a fuller contribution. The developing countries are rightly seeking through trade expansion to accelerate their economic development and to raise their living standards. World trade is still too much fettered by restrictions, high tariffs, trade discrimination and other barriers. The terms of trade have deteriorated for exporters of raw materials and foodstuffs. These basic products, moreover, are subject to sudden and unforeseen price fluctuations which can result in serious setbacks for development plans and for the efforts of producing countries. The developing countries are rightly seeking to diversify their economies, to create soundly based processing and manufacturing industries and to sell the products of these industries in the markets of the world. Their efforts deserve and require the encouragement of advanced countries. All of these countries represented here today stand to gain by increases in the productive capacity and prosperity of the less-developed world. As I see it, the task before this conference should be the establishment of a framework of world trade in which developing countries can achieve a satisfactory rate of economic growth and improved standards of living.
To achieve all these objectives will not be easy and will require adjustments and fresh efforts by all of us. Our task will be eased if we work together and share in the inevitable adjustments. By acting together within the United Nations, we can create in all our countries conditions and

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the political will necessary for progress. Indeed, the only way to move forward effectively is by joint action.
Mr. President, the issues before this conference have been ably analysed in the report presented by the secretary-general, Dr. Haul Prebisch. His report presents us with many challenging proposals. I should like to take this opportunity to pay tribute to the distinguished services which he has already rendered to this conference.
My government-and I am sure each of the governments represented here-has given most serious thought to the issues facing this conference. Each of us will be making a contribution to the consideration of these problems in the days ahead. It may be helpful if I were to outline at this preliminary stage in a more specific way the Canadian approach on how these objectives can best be attained.
Canada will work with other developed countries in eliminating, wherever practicable, tariffs and other restrictions which obstruct trade in tropical foodstuffs and industrial raw materials traditionally exported by developing countries. The new round of tariff negotiations coming up in the GATT, known as the "Kennedy round", will complement this conference. These negotiations should reduce or eliminate barriers to many important exports from developing countries. To free world trade in food and raw materials would be a major accomplishment from which all countries in the world will benefit. At present Canada has no quantitative restrictions on imports of products of interest to developing countries and our tariffs on tropical products and raw materials are generally low or have been removed altogether; we have no internal taxes inhibiting the consumption of these products.
Canada has been a party to all major commodity agreements concluded since the end of the last war. We have always been prepared to explore with other countries the possibility of other agreements on a commodity by commodity basis. However, it would not be in the interest of the developing countries to encourage unduly high prices for primary commodities. High prices are likely to generate unsaleable surpluses by stimulating production and reducing consumption through the use of natural or synthetic substitutes.
Canada will work with the developing countries and others in trying to improve the conditions of world trade for temperate agricultural products. Agricultural protectionism in certain developed countries has been growing; it is tending to increase uneconomic production in these countries. It has curtailed the markets of efficient suppliers in developed and developing countries alike.
Canada had advocated that, in the forthcoming Kennedy round of tariff and trade negotiations, developed countries should ensure that products of interest to developing countries, including manufactured goods and semi-processed materials, are included in the scope of negotiations. As has been recognized in the GATT, this should be done without expecting full reciprocity from developing countries for benefits they may derive from these negotiations. We are hopeful also that successful negotiations of reduction of tariffs on semi-processed materials will go a long way to reducing differentials between tariffs on raw and processed commodities which have created problems for developing countries.
Canada strongly supports a general removal of quantitative restrictions now impeding imports into developed countries of manufactured goods from developing countries. It has been noted that exports of manufactures by developing countries are of limited variety and are exported in volume to only a few markets. Developing countries need the greatest possible freedom of access to the widest

number of markets if they are to establish a diversified and expanding industrial structure. The likelihood of market disruption would be lessened if these exports were less unevenly distributed among developed countries through the establishment of more uniformly favourable conditions of access.
While Canada is approaching the question of preferences with caution, we would be prepared to consider proposals for the exchange of regional tariff preferences among developing countries for a limited period of time and under conditions which took reasonable account of the interests of outside countries.
Canada would be prepared during the course of the Kennedy round of tariff negotiations to examine carefully any tariff preferences now enjoyed by Canada in the markets of the developing countries which may be regarded as prejudicial to the trade of other developing countries.
Canada recognizes that development plans and efforts may be prejudiced by adverse changes in the terms of trade or by other occurrences beyond the control of developing countries. Accordingly, we supported the recent decision of the international monetary fund to increase its help to countries suffering from temporary declines in export receipts. As regards longer term declines, we are prepared to join with others at this conference in studying ways of improving bilateral aid programs and relating them more closely to the changing economic and trading circumstances of the individual developing countries.
As regards the basic question of future institutional arrangements, it is our belief that we can only see clearly what will be required when we approach the end of our deliberations. We shall then have a better idea of what is likely to emerge as a result of the conference. In general, we are not in favour of setting up a new organization of a more or less independent character. Rather we would be more inclined to adapt the existing machinery to make it more responsive to the problems of the developing countries. Indeed encouraging progress is already being made in that direction.
This, Mr. President, is the position of the Canadian delegation at the outset of this conference. It will be clear from my presentation that we believe that much more can be done and must be done to free the channels of trade. We think that, if this were done, the developing countries would have a better opportunity of competing on terms which would bring into play their natural advantages as efficient producers of certain commodities and manufactures. The freeing of trade channels would also help to overcome the effects of undue protectionism in the developed countries and to lead of itself to some of that international division of labour to which reference has already been made in this conference. But I do not want to suggest that the freeing of the channels of trade is all that requires to be done. The range of problems which we have come to consider is vast and no single nor simple solution for them is likely to be possible. We are prepared, Mr. President, to join others at this conference in exploring patiently all avenues along which solutions may lie. We have come to listen to the views and preoccupations of others as much as to share with them our experiences as a young and expanding country.
The object of the conference, as we see it, will be to contribute to the solution of problems which are crucial to the well-being of a very large proportion of the human race. They are urgent problems and their solution is urgent. Many new nations have come into being over the past decade

or so. Their governments are concerned-as they must be concerned-to ensure that the political independence they have achieved should find fruition in rising standards of living, in better health and improved opportunities for education, and in the greater happiness of all their people. The urgency of this task is such that they cannot accomplish it by themselves. The more developed countries must come to their aid-as indeed they have already come to their aid-recognizing that in a world which is becoming daily more interdependent, the conditions under which mankind lives will have to be brought into a more equitable relationship. It has been said of the people of the developing countries that they were embarked on a "revolution of rising expectations". It is to take a step forward in the direction of meeting these expectations, Mr. President, that this conference has been called and I am glad to be able to pledge the active co-operation of the Canadian delegation in the work in which we are about to engage.


BREAKWATER REPAIRS, CUMBERLAND, N.S.
Mr. Coates: On what wharves or breakwaters in Cumberland will repairs be effected during the fiscal year 1964-65 and what will be the estimated cost of repairs on each facility?


Jean-Paul Deschatelets: The following repair
works to wharves and breakwaters are expected to be carried out in Cumberland during 1964-65:	Wallace, wharf repairs and
extension, $51,000; Parrsboro, repairs to retaining wall and breakwater, $26,000; Spencer's Island, wharf repairs, $11,000.


MOTOR TRAFFIC, HAINES-ALASKA ROAD
Mr. Douglas: How many cars passed over the Haines-Alaska highway cut-off in Canada between November 1, 1963 and March 1, 1964 and of these how many had (a) Canadian licence plates (b) U.S. licence plates (c) other licence plates?


Jean-Paul Deschatelets: Total vehicle traffic recorded through customs at Pleasant Camp, British Columbia was 1,262 between November 1, 1963 and March 1, 1964.
Passenger cars Trucks, etc.
(a)	Canadian licence
plates	444	65(b)	U.S. licence plates 605	148(c)	Other licence plates Nil	NilTotal:	1,049	213


MOTIONS FOR PAPERS
[Stage Direction]
Motion No. 99-Mr. Marlineau:
That an order of the house do issue for a copy of all correspondence including letters and other documents exchanged, on the one hand, between the government, the Minister of Justice or other governmental agencies and, on the other hand, any person or association with regard to the
Motions for Papers
construction of the penal institution for women planned by the government at Cornwall.
Motion agreed to.

[Stage Direction]
Motion No. 114-Mr. Herridge:
That an order of the house do issue for a copy of all petitions sponsored by the Nelson chamber of commerce signed by residents of Kootenay East and West urging immediate ratification of the Columbia river treaty, received by the government since January 1, 1964.
Motion agreed to.

[Stage Direction]
Motion No. 115-Mr. Horner (Acadia):
That an order of the house do issue for a copy of the 1958 report of the study which was conducted by P.F.R.A. on the Red Deer diversion scheme.
Motion agreed to.

[Stage Direction]
Motion No. 116-Mr. Horner (Acadia):
That an humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of the 1943 agreement between the federal government and the province of Alberta respecting P.F.R.A. projects in that province.
Motion agreed to.

[Stage Direction]
Motion No. 117-Mi. Marlineau:
That an order of the house do issue for a copy of all files, documents, memoranda, letters and other documents dealing with the investigation carried out under the Inquiries Act regarding Miss Hattie English, postmistress at Riviere au Renard, P.Q.
Motion agreed to.
LAY-OFFS AT ENAMEL & HEATING PRODUCTS, AMHERST, N.S.
Motion No. 118
Mr. Coales:: That an humble address be presented to His Excellency praying that he will cause to be laid before this house a copy of all correspondence including letters and other documents exchanged, on the one hand, between the government, the Minister of Industry or other governmental agencies, and on the other hand, any person, company, governmental or civic body, related to the lay-off of employees by Enamel and Heating Products Limited of Amherst, N.S.


Mr. Speaker:: Does the house give consent for the hon. member for Cumberland to withdraw his motion?


Some hon. Members:: Agreed.
Order discharged and motion withdrawn.

Inquiries of the Ministry CROWN ASSETS


VANCOUVER
[Stage Direction]
On the orders of the day:
Mr. Stuart A. Fleming (Okanagan-Revel-sloke):: Mr. Speaker, I would like to direct a question to the Prime Minister. Now that the city of Vancouver delegation, concerned with the future use of the Kitsilano air base property, is in Ottawa, can he give the assurance I asked for last Monday, that the government will not make any final decision on the disposition of these lands until the delegation's proposals have been carefully studied?


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, certain of my colleagues concerned with this matter and I had the privilege of meeting the delegation from Vancouver and we expect, as a result of this meeting, that arrangements will be made which will be satisfactory to all concerned.


Stuart A. Fleming: As a
supplementary question, can the Prime Minister give the house the assurance that the statement made at a press conference in Vancouver last Friday by the Minister of Northern Affairs and National Resources was both premature and incorrect?


Mr. Speaker:: Order, please.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquillam):: Mr. Speaker, may I direct a question to the Prime Minister regarding the business of the house, and ask the right hon. gentleman if he would be prepared at an early date to give the house a list of the measures which the government is convinced must be passed before there is any summer recess. I recognize that the government cannot set a date for a summer recess because part of the responsibility for this lies with all members of the house, but if the Prime Minister would outline the legislation which it is considered imperative should be dealt with prior to a recess, hon. members would have some idea of what work has to be completed before that time.


Lester Bowles Pearson: Mr. Speaker, I think it would be appropriate, and a good idea, if I could give the house at an early date a list of what might be called government priority proposals as to legislation. It is difficult, as my hon. friend has indicated, to say the government hopes these

will be passed, or that it even insists that these be passed before a recess.
For one thing, the pension legislation is priority legislation, but the question of a decision on that matter by the house will depend, as I said yesterday, on the speed with which we can get an amendment to the constitution which will make it possible to include survivor benefits. Also, ratification of the Columbia treaty is a very important priority matter, but it is still before a committee. Subject to these qualifications I shall be very glad indeed to make that kind of statement, perhaps next week.


Mr. G. W. Baldwin (Peace River):: As a
supplementary question, in that regard is the Prime Minister considering the effect of the United Kingdom general election this fall and the consequent likely early dissolution of the United Kingdom parliament in his time table to secure a constitutional amendment necessary for the Canada pension plan?


Lester Bowles Pearson: Mr. Speaker, of course I have that consideration in mind, but I hope the United Kingdom parliament will not be dissolved until it has had an opportunity to amend the Canadian constitution; and I hope before long we will not have to go to the United Kingdom parliament for such amendments.



INVITATION TO UN SECRETARY GENERAL TO ADDRESS HOUSE COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbiii (Oxford):: Mr. Speaker, I would like to direct a question to the Secretary of State for External Affairs. In view of the fact that the secretary general of the United Nations is to visit Ottawa later this month, would the minister inquire from the secretary general whether he would accept an invitation to speak to the standing committee on external affairs, if he were extended such an invitation by that committee? I make this request, Mr. Speaker, because of the very special interest of the members of this house and of the people of Canada in the peace keeping operations of the United Nations.


Hon. Paul Marlin (Secretary of Stale for External Affairs):: Mr. Speaker, I am sure we are all very grateful and honoured that the secretary general is going to visit Canada at the end of the month. I would hope there would be an opportunity for him to speak not only to the members of the external affairs committee but to all members of the house. The suggestion for exploring this opportunity was made in an aside to me a

few moments ago by the Prime Minister, and I am sure he will take steps toward that end.



CANADIAN FLAG


[Stage Direction]
On the orders of the day:
Mr. Real Caouetle (Villeneuve):: Mr. Speaker, I wish to ask the Prime Minister a question.
He stated in his riding, more precisely at Espanola, a few days ago, that the adoption of a distinctive national flag would help cement national unity.
Here is my question. Does he intend to submit to the house during this session that "cement" he talked about to his electors of Algoma East?


Lester Bowles Pearson: I did not use the words attributed to me by the hon. gentleman, but I do not object to his interpretation of what I said. The policy of the government in regard to this matter is well known. Within a year, now, this matter will be submitted to parliament for parliament's decision.


Robert Carman Coates: In view of the growing disunity in the country arising from the promise of a new flag design-


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order. I wonder whether the hon. member would rephrase his question.


Robert Carman Coates: I do not know how else I can make the statement. Disunity is evident. Every newspaper one picks up indicates great concern about this proposed change. Would the Prime Minister give consideration to withdrawing his promise to introduce a new design, and carry on with the red ensign?


Lester Bowles Pearson: No, Mr. Speaker.


Robert Carman Coates: Will the Prime Minister go along with the proposal put forward by the Royal Canadian Legion and carry out a national referendum to decide what should be our national flag?


Mr. L. J. Pigeon (Joliette-L'Assomption-Montcalm):: Mr. Speaker, may I put a question to the Prime Minister?
In view of the fact that Canada has been an adult and independent country since the statute of Westminster, could the Prime Minister assure the house that his government will give us but one distinctive national flag, without 20220-189
Inquiries of the Ministry union jack or red ensign, so that Canada may not be mistaken for some foreign country as happened at the time of the Suez crisis? [Text]


Mr. Speaker:: Order. May I suggest to the hon. member that he put this question on the order paper.


Louis-Joseph Pigeon: Mr. Speaker, I want to discuss this matter after ten o'clock.



ARTS. LETTERS AND SCIENCES ATTENDANCE AT ROYAL COMMISSION HEARINGS BY MEMBERS OF PUBLIC SERVICE AND ARMED FORCES

[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Royal: have a question for the Associate Minister of National Defence. I am wondering whether the chief of the general staff has now authorized officers and men to participate in the deliberations of the royal commission on biculturalism and bilingualism in accordance with Queen's orders and army regulations.


Louis-Joseph-Lucien Cardin: I am now in a position to answer the hon. member's question and to inform the house that there is no prohibition, first, against civil servants appearing before the royal commission on biculturalism and bilingualism and giving evidence if they wish to do so. No instructions have been issued by the Department of National Defence which would question this right.
Concerning members of the armed forces, the Queen's regulations preclude a member of the forces giving public evidence on a military subject or publishing in writing, or delivering any lecture, address or broadcast in any way dealing with a subject of a controversial nature pertaining to public policy without permission of headquarters. Army headquarters sent a message on May 4 to its commands as a reminder of these provisions.
Due to the special nature of this inquiry, however, it is recognized to be in the public interest that the widest range of views and opinions should be obtained, including those of the members of the forces. It is nevertheless important, having regard to the problems associated with military discipline, that arrangements be available which will give individual members of the forces the opportunity to present views freely if they so wish without compromising that discipline. The commission has agreed in these circumstances to receive evidence of any members of the forces who so desire, in camera. The Department of National Defence will cooperate in encouraging the attendance of members of the forces who wish to appear before the commission.

Inquiries of the Ministry


Mr. Erik Nielsen (Yukon):: Can the minister assure the house that the same consideration will be given to other Canadian citizens appearing before the commission who may also wish to give their evidence in camera?


Louis-Joseph-Lucien Cardin: I am, of course, speaking of the military personnel of the department, and I do not think I should be asked to go further.


Erik Nielsen: Then can the Prime Minister give that assurance?


Lester Bowles Pearson: I do not think the hon. member and other Canadians are subject to the same rules of discipline.


Hon. Marcel Lambert (Edmonton West):: have a supplementary question in this regard, Mr. Speaker. I wonder if the minister could tell us whether there is any difficulty about discipline, and so forth, regarding members of the armed forces appearing at sessions of the commission during the evening hours, as these have been held in the past. Is there any difficulty in this regard?


Louis-Joseph-Lucien Cardin: Mr. Speaker, there is no difficulty in members of the forces attending the sessions. What we are now speaking of is the submission of briefs to the commission.


Marcel Joseph Aimé Lambert: This is implicit in my question, Mr. Speaker, because this is what we are discussing. They can attend to give evidence during the evening hours without any difficulty, in the main, in regard to their ordinary course of duty.


Thomas Clement (Tommy) Douglas: supplementary question, Mr. Speaker. In view of the fact that the royal commission is dealing with biculturalism and bilingualism and not with military matters, will the minister tell the house why military personnel should be required to give their evidence in camera and why the people of Canada should be denied the opportunity of hearing that evidence.


Louis-Joseph-Lucien Cardin: The regulations as they are do not deal only with matters of military significance, but also with matters that are controversial and of a public nature. It is on those grounds that we have arranged with the commission to receive the presentations of members of the services in camera.


Thomas Clement (Tommy) Douglas: A further supplementary, Mr. Speaker. In view of the anomalous situation which the associate minister has described, would it not be much easier to amend Q.O.&A.R. rather than go through this flimflam procedure?


Louis-Joseph-Lucien Cardin: Mr. Speaker, I disagree that the situation is anomalous, and I think this is perhaps the best way of giving members of the forces an opportunity to speak freely to the commission so that the members of the commission can appreciate the problems that exist in the services in this regard.


Thomas Clement (Tommy) Douglas: They are being treated as second class citizens; that is what is happening.


Mr. Fairweather:: Mr. Speaker, I now put to the Associate Minister of National Defence the fact that the Queen's orders and army regulations contain exactly the formula under which this permission can be granted-


Some hon. Members:: Order.


Robert Gordon Lee Fairweather: -and I wonder whether this matter should not be reviewed. Article 19, subsection 37, says that the chief of the general staff can give this permission if it is in the public interest.


Louis-Joseph-Lucien Cardin: Mr. Speaker, I would like to assure the hon. member that the staff of the Department of National Defence have looked at that particular regulation. We have now made up our minds, and I think this is perhaps the best thing that could be done under the circumstances.


Some hon. Members:: Oh, oh.


Mr. Speaker:: The hon. member for
Kootenay West (Mr. Herridge).


Erik Nielsen: A supplementary question, Mr. Speaker-


Mr. Speaker:: Order. The hon. member for Yukon has asked one or two questions. We only have a half hour period and I must obviously distribute the favours, so to speak.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Finance. It is impossible to determine whether it is of national significance until we hear the minister's reply.


Some hon. Members:: Oh, oh.


Herbert Wilfred Herridge: My question is based on an advertisement in the Ottawa Journal of May 1 which reads as follows:
Men wanted as candidates for next federal election. Must believe in God and understand finance and banking.
Could the minister inform the house whether he has any knowledge of this

advertisement and whether it was placed in the Journal by the government or by the Liberal party?


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, I see no conflict in the requirements which my hon. friend read out, but I have no knowledge of the advertisement.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, my question is directed to the Prime Minister. Has he received from the Ontario chamber of commerce a resolution recommending to study the possibility of diverting the James bay waters into the great lakes through the Harricana river, and does he intend to recommend that study?


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



PROPOSED 50 PER CENT TARIFF REDUCTION AS BASIS FOR NEGOTIATIONS

[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to address a question to the right hon. Prime Minister arising out of the decision taken in Geneva last night by the United States, the European economic community and Great Britain to make a 50 per cent, across the board tariff reduction the basis for future negotiations. I am wondering whether Canada has agreed to this basis.


Lester Bowles Pearson: Well, Mr. Speaker, that has for some time now been the basis for negotiations in the discussion which have begun at Geneva. It has also been understood for some time that there are certain countries to which this particular principle does not apply in that form, and that the negotiations would have to be conducted on a different basis. That is all I can say about the matter pending the receipt of the particular report to which my hon. friend refers.


Horace Andrew (Bud) Olson: A supplementary question. Has Canada agreed that this is a proper basis for future tariff negotiations respecting trade between Canada and the United States?


Lester Bowles Pearson: No. We have made that quite clear. While we agree that we must give equivalent compensation for any concessions
20220-189J
Inquiries of the Ministry which are received, the application of this particular mathematical formula, in the case of Canada and the United States, would not be fair to Canada.



CANADIAN COASTGUARD


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, I have a question for the Minister of National Defence. To further clarify the statement made yesterday by the Minister of Transport in regard to the establishment of a Canadian coastguard college at the Point Edward naval base, may I now ask the Minister of National Defence whether this information was relayed to the delegation from the Sydney board of trade when he met with them on March 17.


Paul Theodore Hellyer: Mr. Speaker, we discussed this as one of the possibilities for using some of the facilities at Point Edward, and it was just one of many suggestions which were made to demonstrate the initiative which this government is taking to try to find employment for the people who would be without jobs as a result of the closing of the naval base, and in order to make maximum use of the facilities there.


Robert Muir: A supplementary question. In view of the minister's reply may I ask him why this information was not given in the house on March 19, when the hon. member for Cape Breton South and myself asked this question?


Paul Theodore Hellyer: Well, Mr. Speaker, I think the Minister of Transport will have to answer that question. As far as I am aware the decision had not yet been taken at that time.


John Whitney Pickersgill: Mr. Speaker, I may say that the decision was announced in this house at the first available moment after the final decision was made by the government.



EARTHQUAKE DAMAGE


[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a question for the Minister of Northern Affairs and National Resources. Is the minister aware that the premier of British Columbia has issued a statement confirming that he regards the telegram sent to the government yesterday with respect to

Inquiries of the Ministry the Alberni flood disaster as an official request for assistance, and further describing the reply given yesterday as stupid?


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: Mr. Speaker,
I have not at any time raised a protest against or argued with the terminology used to describe me by other people in political life, and I am not going to do so now. I have not even inquired from time to time whether that language is the result of choice or of limitation. However, I want to assure the hon. member that the statement I made yesterday with respect to the wire was factual in every respect. The wire is still with us and we intend to communicate with the premier of British Columbia, and one of the first things we will ask him is that he give us permission to make public the wire which he sent us on May 4.


Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. Inasmuch as the premier has indicated that prime ministers should communicate with prime ministers, is this the level at which these negotiations are now taking place?


Arthur Laing: I think the premier of British Columbia has been in touch with the Prime Minister on this matter. As a matter of fact, the wire to which I have referred was addressed to the Prime Minister.


Mr. Rheaume:: Have you established diplomatic relations yet?



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. C. O. Cooper (Roselown-Biggar):: Mr. Speaker, I have a question for the Minister of Agriculture. It is one which I asked last fall concerning the use of dieldrin as a crop spray. Has anything been done to abandon the use of this dangerous poison on our cereal crops and pastures?


Hon. Harry W. Hays (Minister of Agriculture):: Mr. Speaker, my estimates will be up for consideration tomorrow at which time I would be pleased to go into all the ramifications of the use of pesticides, insecticides and that sort of thing.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. Paul Marlineau (Ponliac-Temisca-mingue):: Mr. Speaker, I have a question for the Minister of Finance. I wonder whether the Minister of Finance will tell the house if

he has now decided to delay the applications made by the three groups for constitution under the Bank Act until the amendments to the Bank Act have been brought in and, if so, when will these amendments be brought in?


Walter Lockhart Gordon: In reply to the first part of the question, Mr. Speaker, the applications are now before the Senate or the Senate banking and commerce committee, who I am sure will proceed to deal with them in their usual fashion. As to when the amendments to the Bank Act will be brought in, it is my hope, as I have said on other occasions, that we will have an opportunity to make progress with this very difficult legislation within the Department of Finance this summer, with a view to being ready to present the bill to the house in the late fall.


David Réal Caouette: A supplementary question, Mr. Speaker. Could the Minister of Finance tell us, at this time, whether the Porter commission report will be referred to the parliamentary committee on banking and commerce for study and to determine the decisions to be taken or suggested to the government?


Walter Lockhart Gordon: Mr. Speaker, since my hon. friend asked this question last week I have had an opportunity to examine the precedents in this matter. In accordance with the practice which was followed on the only other similar occasion in Canada, the first thing which has been done is to table the report so that all hon. members of the house as well as the public can have access to it. The government will have a chance to consider the report and reach conclusions as to which of the various suggestions and recommendations should be incorporated in the legislation which will be presented to the house. That legislation will then be referred to the banking and commerce committee, where witnesses will be called and an opportunity given to the public to comment on the bill which is up for consideration, as well as making any other comments or proposals they wish to make with regard to the contents of the report. I think nothing could be served by referring the report to the banking and commerce committee until the government has reached conclusions on the legislation to be presented.


Horace Andrew (Bud) Olson: A supplementary question. Could the Minister of Finance tell the house for what length of time he proposes to ask parliament to extend bank charters pending this legislation?


Walter Lockhart Gordon: This proposal is contained in the bill. It is for one year, commencing June 30, 1964.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr, Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wonder whether the Prime Minister has had an opportunity to check with the Minister of Finance regarding the statement he is reported to have made out west a couple of days ago, and whether he can now confirm that it is the united view of the government that the Canada pension plan legislation will be proceeded with at this session?


Lester Bowles Pearson: Mr. Speaker, I have read the text of the minister's speech, and there is nothing in that text that justifies certain conclusions which were drawn from it and expressed in the house yesterday about delay in this matter.



FISHERIES


[Stage Direction]
On the orders of the day:
Lloyd Roseville Crouse: Mr. Speaker, I should like to direct a question to the Prime Minister. Is the Prime Minister aware that on Monday the House of Representatives at Washington passed a bill that would prohibit foreign fishing vessels in the territorial waters of the United States and provide for a fine of $10,000 or a year's imprisonment or both for violators? Could he also tell the house whether this bill was passed as a result of our stated intention to establish unilaterally a 12 mile fishing limit off Canada's coast?


Lester Bowles Pearson: Mr. Speaker, I will be glad to look into the matter at once, but pending examination I think I can give my hon. friend the assurance that any such bill of this kind dealt with at this time in Washington would, I am sure, have no relation to the bill which we are proposing to introduce.


Lloyd Roseville Crouse: A supplementary question, Mr. Speaker. In view of the importance at the present time of the fishery off the United States coast to our Canadian operators, who are now in those waters long-lining for swordfish, while the Prime Minister is investigating the pertinent points would he also find out and tell the house whether this legislation applies to Canadian fishermen?
Inquiries of the Ministry


Lester Bowles Pearson: I will be glad to do that.


Hon. J. A. MacLean (Queens):: Mr. Speaker, I should like to address a related question to the Minister of Fisheries. Can the minister give the house an indication when he expects the negotiations between Canada, the United States and other interested countries with regard to the proposal for the extension of Canadian fishing waters will be terminated?


Hon. H. J. Robichaud (Minister of Fisheries):: Mr. Speaker, the first phase of the negotiations with most if not all of the countries interested in fishing off the Canadian coast has been completed, and we are now ready to carry on with these negotiations in more detail. At this time I cannot give an exact date when they will be completed.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Reid Scott (Danforth):: Mr. Speaker, I have a question for the Minister of Justice of which I have sent him notice. In view of statements made by the attorney general of Ontario and in view of the very urgent need for clarification by the minister before the Ontario legislature recesses tomorrow, has the government received requests from the government of Ontario to cancel the charters held by the two notorious gamblers, Feeley and McDermott, for fear they will be used for illegal gambling activities? If so, what response has the government made to these representations and what action, if any, has been taken to cancel these charters?


Hon. Guy Favreau (Minister of Justice):: Mr. Speaker, I thank the hon. gentleman for sending me notice of his question. I must answer for the moment, though, that my department has received no such request. Before the house opened today I intended to speak to the Secretary of State about the matter, because his department is concerned, and I undertake to send him notice.


Reid Scott: A supplementary question, Mr. Speaker. I see the Secretary of State is here, so perhaps we could have an answer from him at this time.


Hon. Maurice Lamoniagne (Secretary of State):: I am sorry, Mr. Speaker; I would ask the hon. member to repeat his question, please.


Reid Scott: I want to know whether the government has received requests from the government of Ontario to cancel the charters held by the two notorious gamblers, Feeley

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and McDermott. Fears have been expressed by the police that these charters will be used for illegal gambling activities in Ontario. I should like to know whether representations have been received and what action has been taken.


Maurice Lamontagne: Not to my knowledge, but I shall inquire, Mr. Speaker.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, I should like to direct a question to the Minister of Justice. A few days ago I asked him whether the report of special counsel appointed by the government had recommended that Mr. McLaughlin be charged with the same offence of which Mr. Banks was found guilty by a court in the province of Quebec.


Guy Favreau: Mr. Speaker, I thought I had already answered that question, but in case I have not I must say there has been no report from special counsel recommending the laying of an information against Mr. McLaughlin of the same nature as that laid against Mr. Banks, and for which offence he has been convicted. I did answer, however, that special counsel had recommended that Mr. McLaughlin be charged with conspiracy to induce certain people to leave their ships contrary to the Canada Shipping Act. However, I have also answered that the question of the references with respect to Mr. McLaughlin made in the proceedings concerning Banks would be the object of a report which I have sought. I have not yet received the exact text of the utterances, but I will continue to look into the matter.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.

[Stage Direction]
That it is expedient to introduce a measure to amend the Estate Tax Act and to provide among other things:
1.	That in respect of property passing on the death of a person whose death occurs at any time after March, 1964, the deduction from the tax otherwise payable in respect of any such property that
(a) was situated in a province that levied a succession duty and that was not entitled under the Federal-Provincial Fiscal Arrangements Act or any other act of the parliament of Canada to receive a

payment in consequence of its refraining from increasing its succession duty in respect of such property or in respect of property described in subparagraph (b), or
(b) was personal property situated outside of Canada that was, on the death of any such person who at the time of his death was domiciled in a province described in subparagraph (a), transmitted to a person who at the time of such death was domiciled in or resident in that province, shall be 75 per cent.
2.	That the limit of $1,500 on the amount of certain kinds of property passing on the death of a deceased person that may be transferred, delivered or paid over to any person resident in Canada without the consent of the minister, in the case of any one transferor, deliverer or payer, be increased to $2,500, and that such kinds of property be extended to include an amount payable under a policy of insurance in respect of sickness or accident in which the deceased had, immediately before his death, a beneficial or other interest.
3.	That the property comprised in a settlement to be included in computing the aggregate net value of the property passing on the death of a person be deemed to include property comprised in a settlement where any income from such property is reserved to that person for life or any other period determinable by reference to death.
4.	That a disposition made by a person out of any community of property existing between that person and his spouse at the time of the making of such disposition be deemed to have been made by each of them according to the respective share of each in that community.
5.	That where, on condition of the purchase of an annuity, a policy of insurance was effected after March 16, 1964 on the life of a person there be included in computing the aggregate net value of the property passing on the death of such person the lesser of,
(a)	the amount paid for the annuity less the aggregate of annuity payments made prior to the death, or
(b)	the amount payable under the policy of insurance.
Edgar John Benson: Mr. Chairman, I thought it might be helpful if I gave a general outline of the proposals contained in the estate tax resolution before the committee begins to consider them in detail.


The Deputy Chairman:: Order. It is a little difficult for the Chair to hear what is being said by the hon. member.


Edgar John Benson: Thank you, Mr. Chairman. The resolution is divided into five paragraphs that outline the most important of the changes proposed for the Estate Tax Act. In addition the bill to amend the act will contain several other useful amendments.
Paragraph 1 implements part of the proposal made to the provinces last November to leave to them a larger share of the death duties field. It provides for a 75 per cent abatement, instead of the existing 50 per cent abatement, of the federal estate tax otherwise payable in respect of property in a province that levies a succession duty. The 75 per cent abatement will apply only to British Columbia

at present because the other two provinces that levy a succession duty, Ontario and Quebec, have chosen not to raise their rates at present but to qualify instead for an equivalent tax abstention payment of 25 per cent. The existing 50 per cent abatement will continue to apply in respect of property situated in Ontario and Quebec. The existence of two levels of abatement will require a consequential amendment to the rules determining the situs of property.
Paragraph 2 proposes that the amount of certain kinds of property, such as money on deposit, that may be transferred from the deceased's estate to a beneficiary without the consent of the Minister of National Revenue be increased to $2,500 from $1,500 for each transferor. It also proposes that an amount of $2,500 payable under an insurance policy for sickness or accident may also be transferred without the minister's consent. These proposals are intended to make a greater amount of cash readily available to beneficiaries while the estate is being settled.
The next three paragraphs are concerned with amendments to correct anomalies or deficiencies in the law. Paragraph 3 deals with a special kind of settlement and is intended to ensure that such settlements will be taxed on the same basis as other settlements. Paragraph 4 also deals with a special kind of transfer-a disposition out of community property-and is intended to provide more uniform and equitable tax treatment. The proposal in paragraph 5 is intended to prevent the use of tax avoidance devices.
These proposals, and several others, will be found in the amending bill, and are those that it seemed necessary or appropriate to recommend to parliament at this time. I should like to reiterate, however, a statement made by the Minister of Finance in his budget speech, as reported at page 980 of Hansard for March 16, 1964:
In reviewing the Estate Tax Act in the light of the representations that had been made about it, I was impressed with the case made by women's organizations saying that more recognition should be given to the special contribution that a wife makes to the accumulation of property by her husband. Any action to give effect to suggestions of this nature, however, would now affect provincial revenues more than our own budget position. Death duties are under review by provincial commissions of inquiry as well as by our royal commission on taxation. We have therefore deferred any action on this matter, and hope that there will be consultations with the provinces on it, as well as on other aspects of death duties, following the reports of the various commissions.


Marcel Joseph Aimé Lambert: I have a few points I should like to make at this time, particularly with regard to the statement made by the parliamentary secretary in respect of the words of the Minister of Finance appearing at page 980 of Hansard for March 16. I am just wondering
Estate Tax Act
what the minister meant by saying that he was much impressed with the case made by women's organizations that more recognition should be given to the special contribution a wife makes to the accumulation of property by her husband. We know many organizations have sought an increase in the basic exemption of an estate from $60,000 or $70,000 to $80,000. I will say that I agree there is a rather difficult position now that the federal government has more and more handed over the revenue from the estate tax to the provinces. It would be rather difficult for the federal government to suggest now that it would increase the exemption ceiling without the consent of the provinces. In other words, the federal government would actually be giving away provincial money. This is a very difficult position in which to find one's self.
However, I find it difficult to reconcile this statement with some other statements that have been attributed to the Minister of Finance to the effect that Canadians will undoubtedly face an increase in taxation as a result of these concessions or allocations of sources of revenue to the provinces. I do not believe the minister can have it both ways. I am a little dubious about the sincerity of his statement. While it sounds nice, I think the minister's freedom of action is very limited, and the best interpretation I can put on the budget statement is that it was a pious hope.
I should like to know what further information has been received by the government of Canada as a result of any studies that have been made by provincial bodies or by the royal commisison on taxation. I am referring now to the last sentence in the minister's statement which appears at the top of the second column of page 980 of Hansard.
Turning now to the resolution as it appears before us, I wonder if the parliamentary secretary can give us a little more detail as to the effect of the British Columbia legislation to which the minister referred at the time of the budget, and which has now had the effect of setting up two scales of valuation or abatement. I leave that point with a request for information.
In so far as paragraph 2 of the resolution is concerned, which increases the ceiling on permissible transfers by a representative of a deceased person, I should like to refer to joint bank accounts and also to land held under joint tenancy. I have always been bothered by the application of the estate tax or the succession duty on the legal position resulting from the death of a joint tenant. For purposes of taxation it has always been deemed that half the value of the property shall have been assessed to the deceased. This

Estate Tax Act
is a new legal definition given to joint tenancy for reasons of the estate tax. I know that this is contained in the number of judgments of various taxation bodies. I have always found these to go rather hard against the legal interpretation of joint tenancy.
I must find that in the provinces where there is a land registry system which recognizes joint tenancies. This is a fact in connection with the majority of new homes being bought in these provinces where the mortgage companies insist on joint title to have both husband and wife on the mortgage for additional protection. All that is required is the filing of a death certificate to vest the title in the survivor. I am wondering how, in the field of property rights, the crown of Canada through the Estate Tax Act purports to interrupt or impede such a vesting of title without the consent of the minister. I trust the parliamentary secretary may have an answer to this question. How can the minister require that a provincial act shall be affected when there is a legal consequence flowing from the decease of a joint tenant? He may have an answer, and I would be most interested in it.
It is true that the amendment in paragraph 2 of this resolution will increase the ceiling on the property that may be permitted to pass without the consent of the minister. The additional portion, I think, is quite reasonable in that it provides for a certain amount payable under an insurance policy in respect of sickness or accident, in which a deceased had a beneficial or other interest immediately prior to his death. I can see that this will facilitate the payment of hospital bills immediately, by the representative or widow of a deceased, or by whoever may take on that responsibility. This is a move in the right direction.
However, with regard to those provinces where there is registration of the minister's certificate prior to an actual transfer of property, I would like to ask, have there been consultations with the provinces in regard to the increase of the ceiling from $1,500 to $2,500? I remember that this was a matter which was discussed some four or five years ago.
With respect to paragraph 4 of the resolution I wonder whether the inclusion of the words "out of any community of property" is limited to the province of Quebec, which is the only province in which the term "community of property" really applies, or whether this is dealing with joint tenancies, which I would submit is a form of community ownership of property. Is it only with respect to the province of Quebec?


Edgar John Benson: That is right.


Marcel Joseph Aimé Lambert: Very well, that clears up that point. Now, with respect to paragraph 5 I know that this matter of these very complex schemes has exercised the Minister of Finance and the Minister of National Revenue for some time, particularly where they seem to defeat the purpose of the act. Under these circumstances perhaps the parliamentary secretary could give us some indication of the type of thing aimed at, without necessarily going into all the details.
I would ask him to give us as much information as he can at this time because this is a relatively new act and we have not had long experience of it. We are not getting, shall we say, too many progress reports, which may be expected in the long run. Since the act has only been in force for five years the committee and the country would appreciate receiving an estimation of how it is working out.


Edgar John Benson: Perhaps I should deal with some of the questions raised by the hon. member for Edmonton West before further questions are raised by other members. The first matter which he mentioned was the question raised by the minister of giving further recognition to the contribution of women towards the building up of an estate. In this regard representations have been made for a number of years by women's organizations. The matter was considered very seriously by the minister at the time of his budget preparation, but it was decided that it would be unfair, as was pointed by the hon. member for Edmonton West, for the federal government to legislate in a manner which would materially affect the amount of revenue derived from the estate tax, in that 75 per cent of this revenue goes to the provinces.
This also affects other matters under the Estate Tax Act, and I believe in the future that amendments to the act which materially affect the amount of revenue which it raises will have to be made after due consultation with the provinces because, after all, they get 75 per cent of the amount of money which is raised by it.
In the case of the differences which arose and are covered in paragraph 1, in British Columbia the provincial government decided to take up the 25 per cent room which the federal government agreed to vacate last year, and it amended its legislation and raised the rates of the succession duty levied in that province accordingly. I can assure the hon. member that it is not within the jurisdiction of the department to decide whether they have exactly taken it up, or taken it up more or less. I would not like to give an opinion

on this, but they have legislated to take up the differential and no special treatment was required.
In the case of Ontario and Quebec they have not as yet amended their legislation and have chosen instead to take a 25 per cent abatement of the tax collected by the federal government, pending the time when they will pass legislation to move into the field to the extent that the federal government has moved out of it.
With respect to the question raised by the hon. member on paragraph 2, this does not affect joint tenancy in real property in that the section which is being amended, section 47(3) of the act, does not cover real property. Therefore joint tenancy in real property does not enter into this particular matter. While the hon. member was speaking I think I mentioned that the amendment with respect to community property was designed primarily for the situation in Quebec, and I understand it is the same treatment as that which is given under the Succession Duty Act in the province of Quebec.
The hon. member asked how the act is working and I am informed by officials of the Department of National Revenue that since its enactment the Estate Tax Act has been working very well.


Mr. Marcoux:: I make apologies to the hon. member for Brome-Missisquoi (Mr. Grafftey) but it will not take me long.
Looking at the estimates concerning the Estate Tax Act, we realize once again that the civil servants' jargon is very hard to understand; thus, when poor people die, leaving their family in want, one has to resort to experts in order to understand what it is all about and be informed of the heirs' obligations towards the government.
Reading the amendments to the act introduced today-of course, I am not an expert and I am not bright either-I find it is very difficult to know exactly what is the meaning of some clauses and what is involved in those clauses we are going to vote in a moment and agree to practically unanimously.
I think this is a failure on the part of our democratic and private enterprise systems. We have reached a point where we do not know where we stand or where we are going. We are dependant on a group of people whose activity is outside their field of interests, and it is difficult to understand their directives.
I think it is a little paradoxical that where a system like ours which pretends to defend democracy and free enterprise as compared to socialist dictatorship, would take steps to
Estate Tax Act
ensure that we reached, at the same time, a point where we defend private enterprise on the one hand, and on the other, we promote the intrusion of socialistic measures which bring with them a multitude of incomprehensible rules, such as those we have before us at this time.
Naturally, if one tries to understand those amendments, it appears that the government has decided to give back to the provinces a small share of the taxation powers on estates. Neither the federal nor the provincial governments seem to be able to do completely without the estates taxes which, in many cases, have reduced to poverty families which were fairly well off beforehand. In other words, those taxes have led numerous small and average businesses to bankruptcy because the government, seeing that it could not get the funds it needed while the owners were alive, succeeds in laying its hands on that money once they have passed away.
I must repeat what I said a moment ago: To my mind, it is a failure on the part of democracy.
If our businessmen and our governments do not try to find a means to simplify the legislation-really, Mr. Chairman, if you have the time to read this, you will probably ask what is it all about when you are through reading it. I would not blame you. A large proportion of the 265 members of the house are also surely in the dark.


Mr. Choquetie:: Not so large.


Guy Marcoux: It may not be so large, but there are many members of the house who surely do not know what it is all about. And yet we are obliged to vote and pass this legislation for otherwise, we are told, the government will be prevented from taking any action.
Mr. Chairman, I am not well versed in these matters, but without going into details, I think the legislation should be simplified as soon as possible instead of trying to find formulas in a style which is hardly understandable. The French language, just like the English language, is usually understandable. But when you read the English or the French version of this legislation, you cannot understand much.
However, we would like that in practice, at least in the field of succession duties, 100 per cent of the revenue be handed over to the provinces.
I was amazed, a moment ago, to hear the parliamentary secretary say that Ontario and Quebec had refused to accept this 25 per cent of the estate tax at a time when, in the province of Quebec, the premier goes around saying that he wants 100 per cent of those

Estate Tax Act
succession duties, when in fact he has refused the 25 per cent to take it back in the form of a general tax abatement.
Of course, the hon. member for Edmonton West (Mr. Lambert) shakes his head in disagreement but as far as I am concerned, that is the way I interpreted the statement made a while ago by the parliamentary secretary.
So, I repeat that the wording of this legislation is very hard to make out and I hope that before long we will have a government that will know how to draft legislation in more simple terms.


Edgar John Benson: Perhaps I might answer one or two of the points raised by the hon. member. He has indicated that this legislation is difficult for the layman to understand, and I think that is generally the case with respect to taxation legislation. But I should like to point out that the present Estate Tax Act which was enacted a few years ago was regarded as a simplification of the act which it replaced, and is generally recognized as being a much simpler measure to deal with than was the former legislation on this subject.
With regard to the 75 per cent shared with the provinces, estate tax also enters the equalization payments; so that in effect we are giving to the provinces more than 75 per cent of the money collected from estate taxes.


Mr. Graffiey:: I am in entire accord with the previous speaker. This is a complicated subject and I believe we are being a little optimistic when we ask for too much simplification, or, should I say oversimplification, in a field which is, after all, highly technical. As the parliamentary secretary has stated, we are already dealing with a simplification of the previous act.
I think it is only fitting that in recognizing the needs of the provinces the succession duty tax per se should be the first one vacated to the provinces under present conditions. I do not wish to enter too deeply into technical matters myself or to become involved with constitutional questions, but it certainly seems to me that succession duty is a tax on property, and very often a tax on real property which in so many ways falls under provincial jurisdiction. I think most hon. members interested in this field recognize that this is so, and while we are of necessity vacating certain tax fields at a time when the provinces are facing an increased burden on their resources, it seems we must agree in great measure with paragraph one and with the government's intention primarily to vacate this particular field.

I should like at this time to call attention to a more specific question, one which was touched upon by the hon. member who has just spoken. I do not intend to speak for very long but I feel obliged to bring this matter up in the house this afternoon. I know that the department has for many years been aware of this general problem. They are certainly seized of it and I am sure they will be aware of it for years to come. I draw attention to it now because the party which I support is a party which believes in a property-owning democracy; we think government should do all it can to encourage the ownership of property. As hon. members know, many families who own small businesses are obliged to let their holdings pass into other hands because of the necessity of raising succession duty quickly. I realize it is not always desirable that a company or an enterprise should be held by a family from one generation to another. But I am thinking particularly, now, not of large companies with many shares on the public market, but of small businesses which have been built up over the years. I am thinking, for example, of a small store owner who has very little in his patrimony except his business. But he has dependants, and they wish to carry on the business, but they are obliged to get rid of it because of the necessity of raising succession duty.
This is not a new problem and I believe some progress has been made in this regard in the past, but I should like to ask the parliamentary secretary to what extent provision can be made to alleviate the situation. Very often, companies are taken over by outside interests simply because succession duties cannot be raised within the time required. I repeat, Mr. Chairman, that the question I am raising is not a new one and certainly has not any political overtones; but I am raising it because my party supports the principle of a property owning democracy. I think we in this house should do all we can to encourage people to own their own businesses, small or otherwise, and should not unnecessarily hang this cloud over their heads if anything can be done to avoid it.
While there is no one paragraph in the resolution before us today which deals specifically with this matter-it perhaps deals too generally with the subject-I would like to have a statement from the parliamentary secretary regarding this problem in general. I know the fact that we vacate these taxes to the provinces means that it is certainly not the federal government alone that can act to alleviate the situation; but surely the federal government, in so far as it is still in the succession duty field, has a role, with the provinces, to play in bringing about what

I think-I am not going to detail my remarks with any specific data at the present time- could be a solution to this problem. General information to which I have access leads me to believe that the problem is still a very real one at the present time and is deserving of further study in order that amendments or changes may be brought about to encourage family ownership and other types of ownership of small and even larger businesses; to encourage, in other words, the ownership of property.


Herbert Wilfred Herridge: Mr. Chairman, I would like to make a few remarks following upon those made by the hon. member who has just resumed his seat, because we in this group believe in legitimate, responsible, private enterprise where there is no degree of exploitation of the community or the nation. I raise this point at the request of a number of constituents who have been faced with unexpected problems in recent years. Many persons are expressing concern because they were not affected a few years ago but are affected now. I refer particularly to heirs of farmers, the owners of small family industries and small businesses, and persons of that type.
I think this situation has largely come about as the result of the general increase in land and property values, which very often have little effect on the actual operation of the farm. There has been little increase in real wealth as far as the farm is concerned, but property values established as the result of developments in the district, or because of an increase in general property assessments in the area in which the small industry or business is located, have created this problem. Because of this situation, which has developed quite rapidly in the last ten years, a number of persons, the heirs of farmers, the heirs of persons operating small industries or small businesses, have been suddenly faced with an unexpected demand for estate taxes. I am not blaming the federal or provincial governments in this respect. However, it does come as a shock, and I have known a few cases where because of this valuation of properties people have been forced to sell a farm which had been in the family for generations and which they would have liked to carry on, or they have been forced to sell a small business.
I am thinking now of one case in my district of quite a successful farmer whose farm is worth say $175,000. If he were to die suddenly, his heirs would be faced with an unexpected demand for cash for estate tax, which I am quite certain they would not be able to meet and it would mean the sale of this family estate or farm. I am not speaking of a large property, but it is a valuable one because they produce fruit and the farm 20220-1901
Estate Tax Act
is located in the Arrow lakes district, which is so valuable for this purpose. A number of people have been to lawyers in the district to get a thorough explanation of the relationship between the federal estate tax and the succession duty tax in British Columbia. I have been told that even lawyers are baffled by the complicated nature of these relationships, and are sometimes unable to give a clear definition of just how the law would apply under certain circumstances. I understand that in order to overcome this difficulty gentlemen of the legal profession are advising their clients to incorporate, but in some cases they do not wish to do this and it does not meet the situation.
Following the remarks made by the hon. member who has just resumed his seat, Mr. Chairman, we would like to hear the parliamentary secretary-who I know is most capable in matters of mathematics, economics, and that sort of thing, because these matters are within his particular field, and we recognize this-make a general statement on the policy with regard to estate tax and the policy of administration when it comes to the collection of estate tax from heirs of the type I have mentioned. Then I would like the parliamentary secretary to give, for the information of hon. members of the committee, a general resume of the provincial legislation in effect in each province in Canada and its relationship to the federal Estate Tax Act. I believe that is not asking too much on this very important question.


Edgar John Benson: Mr. Chairman, I think the entire discussion of the two hon. members who have just spoken is out of order, in view of the resolution which is before the committee at the moment. However, I would refer them to Hansard of December 9 because-


William Heward Grafftey: Why?


Edgar John Benson: I think it is out of order because it does not deal with any of the particular items which are before the committee for amendment. However I would like to refer them to my statement in Hansard-


William Heward Grafftey: On a point of order, Mr. Chairman, and just for clarification, I do not believe this discussion on the estate tax resolution is out of order. If I had found the necessary amendments in the resolution to alleviate the problem which I mentioned, perhaps I would not have had to raise the subject. Are we out of order, Mr. Chairman, when in general debate at the resolution stage we raise matters definitely relating to the Estate Tax Act, just because they are not included in the detailed clauses of the bill? I believe an hon. member is not out of order in the debate on the Estate Tax Act reso-

Estate Tax Act
lution when he raises problems which perhaps need to be dealt with under this heading.
I think we should have a clarification on this point at this time, Mr. Chairman.


The Chairman:: If the hon. member wants a clarification I will have to tell him that a debate on an amending act does not open up discussion on the whole act, so that when we have before us certain specific and particular sections of a statute which are being considered in committee, we cannot discuss other sections of the statute which are not before the committee. I think this is generally recognized practice.


Edgar John Benson: Mr. Chairman, I merely wish to bring this point to the attention of the committee. I would in this regard refer hon. members to my statement as reported in Hansard of December 9 in which I dealt with this particular problem in some detail.
I tried to deal with it fairly at that time. As a matter of fact, something of what I said was misinterpreted. I stated at that time that any decision that would allow people to pay their succession duties or estate taxes by instalments would of necessity require consultation with the provinces, which was interpreted as my being against such consultation, and of course I am not against it.
I think it is completely unfair for the hon. member for Kootenay West to want me to explain the implications of all the succession duty acts in Canada when dealing with this particular resolution.
There is a problem in connection with family businesses which exists in this field and, as hon. members know, the officials of the Department of National Revenue have been looking at this problem for some time. One of the great difficulties with which they have had to deal is the fact that nobody comes forward and gives us a specific example of a business which has had to be sold because of having to pay the estate tax. People talk of this generally but do not come forward and say that a particular business must be sold because of this.
Incidentally, with regard to the little farm in the Kootenays the hon. member was talking about-and I am sure farms are very valuable out there-which would be worth $175,000. On a quick calculation it seems to me that the person involved would have to pay approximately $22,000 in estate tax and succession duties. It would not seem to me impossible for such a person to be able to raise $22,000 with $175,000 as security. I am not in any way minimizing the arguments which have been put forward to the effect that there should be some way of paying

estate tax and succession duties on an instalment basis, and I am sure that when consultations take place with the provinces-and 1 believe consultations have to take place before major changes can be made-this matter will undoubtedly be discussed.


Herbert Wilfred Herridge: Mr. Chairman, just one last question on this point. I admit that it is rather difficult to get all this information immediately, but the minister is backed by an excellent and efficient staff. Could he provide hon. members with an outline of all the provincial legislation and its relationship to our Estate Tax Act? I think this is necessary because numbers of people are finding this matter very difficult; and this includes even the gentlemen of the legal profession who are supposed to know these matters.


Gerald William Baldwin: Mr. Chairman, on the point of order raised may I just make a reference to the fact that the preamble to this resolution reads in this way:
That it is expedient to introduce a measure to amend the Estate Tax Act and to provide among other things:
-and so on. I do not think that there is a limitation here. I think that this is the sign of a government which I hope is prepared to listen to the excellent suggestions which flow from this side of the house; and it may be that when the bill following this resolution is introduced the suggestions which have been advanced from the opposition benches might receive consideration. We might find these suggestions reflected in the bill itself. Once the bill is before the house, then I do not think there is any question that we are limited to what is there; but with respect I would suggest that there is some leeway here, bearing in mind that the resolution does not purport to restrict the proposed amendments within the four corners of the five subparagraphs of the resolution.


Lucien Lamoureux: Without trying to make a general ruling the only thing I can do is to refer hon. members again to standing order 59 (2), which says that in committee discussion must be strictly relevant to the item before us. I would think that every specific contribution to the debate should be judged in the light of that standing order.


David Réal Caouette: Mr. Chairman, if I understand correctly the proposed amendment to the Estate Tax Act, it changes very few things or a great many, depending on how you look at it.
Thus the amendment proposed in paragraph B of clause 1 would mean that the 75 per cent abatement is the result of the

federal-provincial agreements entered into at the federal-provincial conference held recently in Quebec or the conferences that followed one another in the past several years.
As pointed out so accurately by the hon. member for Quebec-Montmorency (Mr. Marcoux), we are faced with a torrent of words that make up a puzzle, that perhaps 25 hon. members can understand but that 235 do not understand at all and never will. In fact, the parliamentary secretary to the Minister of Finance (Mr. Benson) admits himself that it is difficult to read, especially to understand. It reads well but it is hard to understand, he says. And he adds that the previous act was still more confused, in short more ambiguous.
Instead of introducing amendments of all kinds, they should go straight to the point and say: the federal government withdraws from one taxation field, so that a province can take it over. They should not come up as they do with a torrent of words such as those, in an effort to confuse further the Canadian people. Even lawyers would not make anything out of the terms used in the clause or amendment submitted to us.
For instance, clause 2 reads as follows:
That the limit of $1,500 on the amount of certain kinds of property passing on the death of a deceased person-be increased to $2,500-
There is no need for seven lines or so many meaningless words. For example, it is mentioned:
That the limit of $1,500 on the amount of certain kinds of property passing on the death of a deceased person-
This means the spouse. Everybody understands that.
-that may be transferred, delivered or paid over to any person resident in Canada without the consent of the minister, in the case of any one transferor, deliverer or payer, be increased to $2,500-
Mr. Chairman, I am quite sure the parliamentary secretary must have felt like laughing when he read that subsection or, rather, that sentence.
-and that such kinds of property be extended to include an amount payable under a policy of insurance in respect of sickness or accident in which the deceased had, immediately before his death, a beneficial or other interest.
Mr. Chairman, at this stage of the discussion, I should like the parliamentary secretary of the Minister of Finance to tell us flatly that the idea is to have the provinces take over that field of taxation from the federal authorities. There is nothing else. Let us not try to fool the public by saying that the tax rate or the succession duties rates which the federal government collected previously are being reduced.
Estate Tax Act
It is agreed between the central government and certain provinces, in this case Quebec, that the central government withdraws from that field of taxation so that the province of Quebec may collect the money which was previously collected by the federal government. There is absolutely no reduction of the tax. As a matter of fact, the people of Quebec will have to pay exactly what they were paying previously, if not more.
That is why I say that this measure is the result of the federal-provincial conference which was held in Quebec recently, and that is what I would like the parliamentary secretary to admit frankly, without any back door method and without mental reservation.


Edgar John Benson: Mr. Chairman, I do not think, in the circumstances, that I have to admit anything. I would remind the hon. member for Villeneuve that my statement on introducing these particular amendments was, I believe, quite clear. I said that the first paragraph of the resolution as presented is to implement the agreement which was arrived at with the provinces here in Ottawa. I stated that quite clearly. With regard to the number of words used in the particular amendment, I am not an expert on the use of a torrent of words but I am informed that it was necessary in the case of clause 2, the clause referred to by the hon. member, to use this number of words in order to tie it in correctly as an amendment to section 47 (3) of the Estate Tax Act.


Mr. Rynard:: Mr. Chairman, I have a few remarks I should like to make. First of all, I think the hon. member for Quebec-Montmorency expressed the thoughts of many of us on this Estate Tax Act. It is far too complicated for the ordinary person to understand. I think it is the right of the ordinary person who earns the money and pays the shot to have laws written so that he can interpret them.


An hon. Member:: Oh boy.


Philip Bernard Rynard: Someone says "Oh boy!", but I say this act is difficult to understand. The
same criticism is made in our profession___
that it is sometimes difficult to understand what we are saying. A language should be a communicable language so that the ordinary person can understand it, whether it be in the legal profession, the medical profession or any other profession.


Gerald William Baldwin: Or the Secretary of State for External Affairs.


Philip Bernard Rynard: I should like to make the suggestion, although I may be wandering a little afield, that there should be a uniform estate

Estate Tax Act
tax throughout Canada. We hear talk about tax sharing agreements. I should like to know why in the world the various finance ministers across Canada cannot get together and work out something that will not be so complicated. Today we have the parliamentary secretary telling us that he cannot do anything because of provincial legislation. I say to him that it would add something to the unity of Canada if a national estate tax policy were adopted, and the government should start to work on it so that people across Canada will know where they stand, no matter in what province they live. Today people move from one province to another much more often than a few years ago.
I am wondering about the amount of $2,500 that may be transferred without the consent of the minister on the death of a person. I know this amount represents an increase and I want to compliment the government for increasing it. But surely $2,500 today is a pretty small amount when you consider that somebody who has been sick and has died will have incurred hospital bills over and above the amount provided for by hospital insurance. In addition there would be nurses' accounts to look after. The beneficiary has to live, eat and pay rent and other expenses. The result is that in a month or two all the money on hand is gone.
I know the parliamentary secretary will say that all such people have to do is to apply to the estate tax people and they will give them some money. However, this is at the whim of the officials. I do not say they are necessarily not going to rule reasonably, but they are quite far removed from the actual events and do not understand the whole problem, although they do the best they can. We know that the dollar is eroded every year by 2 or 3 per cent and therefore I suggest that to be realistic this amount should be $5,000 instead of $2,500.
I also want to say a few words on the matter of annuities. Not being a lawyer, I am not quite clear why this provision is not written so that I can understand it. However, let us say that a father buys an annuity for one of his sons and he pays for it in one lump premium. The annuity for his son or possibly his grandson comes due in 20 years. It may be an educational policy. What happens if the father or grandfather dies after 10 years? What is the difference in treatment with regard to an annuity if he is making yearly payments and has to pay 20 premiums?
I want to conclude my remarks by saying that I certainly feel badly that nothing can be done for women who have worked to build up estates. The husband passes on and the widow is not allowed any credit for what she has done in building up the husband's estate.

I think this is very bad. Some women can go out to work for 20 years and build up an estate, but the woman who stays at home on the farm or the woman who stays at home to raise her children until they get through high school is treated as if she has not done anything to build up her husband's estate.
I do not think that is right or fair and I am hoping that the government will do something about the matter. I hope something can be devised that will apply across Canada whereby women will be treated more fairly.


Edgar John Benson: I should like to deal with a couple of the matters raised by the hon. member for Simcoe East. With regard to the point about the complexity of the Estate Tax Act, I stated earlier that the present act is really a simplification of the former succession duty act, and I can assure the hon. member that it is much simpler than the succession duty act was.


Philip Bernard Rynard: Perhaps we will get there yet.


Edgar John Benson: With regard to aiding laymen in preparing succession duty returns, first of all I must remind the committee that someone leaving a widow has to have an estate amounting to $60,000 before any estate tax is payable. Usually these returns are handled by lawyers in the course of dealing with the estate as such. There is a four page guide for filing returns, which is available to anyone. It is almost a layman's guide to assist people in filing estate tax returns.
With regard to the matter of the $2,500, which is being raised from $1,500, it is $2,500 from each bank in which the deceased may have had an account, so it might amount to more than $2,500. If he had accounts in several banks, $2,500 could be paid out of each one of them. In addition, if he had a sickness or accident policy there would be another $2,500 available there. This amount is exactly the amount which was requested by the Canadian federation of business and professional women in their brief to the government on this particular matter.
I agree with the hon. member that it would be nice to have one estate tax act across the whole of Canada. Certainly I should like to see similar legislation all across Canada in regard to other statutes such as the Companies Act. I think something may be accomplished in this regard in that the recent federal-provincial conference agreed to set up a taxation committee to consider matters of taxation, and I certainly think that the question of a uniform estate tax act across the country could and perhaps should be considered by this group.

I dealt earlier with the problem of the recognition of the woman's part in contributing to the estate, and the Minister of Finance also dealt with this matter in his budget speech. I expressed the view that while the government felt something should be done to recognize, beyond the $60,000 exemption, the contributions of women to building up estates of deceased persons, it was felt that this could not be done until there had been consultation with the provinces, in that 75 per cent of the revenue arising out of the estate tax goes to the provincial governments.


Mr. Addison:: Mr. Chairman, everyone in the house seems to hold the same feeling of great concern about succession duties or estate tax goes to the provincial governments, taxation between the provinces and the federal government, the hon. member for Simcoe East referred to a national estate tax policy and the parliamentary secretary answered that he would encourage such a move and hoped that there might be such a policy.
I see a great danger as more succession duty taxing power is placed in the hands of the provinces. We have had examples of tax havens in order to encourage people to move to such areas where there are no succession duties. The Bahamas are one area and Monaco is another.
I can appreciate the difficulties of the provinces in attempting to attract capital within their own boundaries. They might, in order to do this, reduce the amount of the succession duty and get into competition with one another in attempting to attract capital for their own provincial areas.
I suggest to the parliamentary secretary that, in so far as taxation is concerned, people do not have to live within boundaries of Canada. Today it is not necessary for someone to remain in Canada. Persons who build estates have the privilege of moving to an area in which there is no succession duty. I would agree with one of the earlier speakers, that there is today in Canada a process of liquidating family owned businesses in order to provide ready cash for succession duty purposes. This money could very well be used for the expansion of that business.
The parliamentary secretary referred to the possibility of establishing an instalment plan for the payment of these duties. This might very well be considered, or we might consider freezing the estate at a certain value. This might not be the time or the place to discuss this suggestion. However, I feel the parliamentary secretary should consider the suggestions that have been put forward today, one of which was the establishment of a national estate tax so there would be no
Estate Tax Act
difference in rate as between the provinces. If this trend continues, and one province is asking for 100 per cent of succession duties, I believe there should be a move to establish uniformity of succession duties as between the provinces.


Marcel Joseph Aimé Lambert: I have a few remarks to make, plus one more question to ask. First of all, with regard to what the hon. member for York North had to say, I believe it was the motive of the previous administration in passing this Estate Tax Act to introduce some uniformity in estate tax matters across the country. I am speaking subject to correction, but I believe there are only three provinces at the present time who seem to pursue an independent succession duty policy. They are British Columbia, Ontario and Quebec. The other provinces work under this act and take a portion of the revenue derived therefrom. I think that it is a good model.
The hon. member for Simcoe East and the hon. member for Quebec-Montmorency, both of whom are practising physicians, criticized the lawyers for the drafting of this act. I find this rather paradoxical in view of the mysterious language of a medical certificate because, in my view, that is the absolute mystery of mysteries. Then, the hon. member for Quebec-Montmorency mentioned the plight of the poor person in dealing with this act. Since the death duties start when an estate is valued at $60,000 and the widow is given $10,000 for every dependant, I cannot feel that those concerned are entirely poor people. The hon. member may have been referring to some of the provincial acts about which I have no comments. When we are talking about the equality of women and the emancipation of women I may say, as an aside, that some people have suggested we should make an amendment to bring about an equality for men, because a male survivor is entitled to less consideration than is a widow, even though the income earning capacity has been on the side of the female partner to the marriage.
I am again concerned with paragraph 3. I should like the parliamentary secretary to advise me why it is, when there is included in the estate of a deceased the value of a life tenancy, that the life tenancy should be valued on the basis of the capital of the estate. Perhaps he could clear up this point. The way I interpret it, a life tenancy is valued on the basis of the estate from which it is paid, and I would have thought the life tenancy would be based on some sort of actuarial table and, in the case of a person who has died, this life tenancy should come

Estate Tax Act
to an end. I may have completely misunderstood the nature of the amendment, and I should like to have some clarification.
The last point I should like to make is one which arises from one of the complexities of the various succession duties acts, and that is the right of certain provinces to declare the situs of personal property. We may have a person who has lived all his life in Alberta and who has accumulated an estate including shares in a corporation whose head office is in the province of Ontario or Quebec. These two taxing authorities will, of course, exact their portion of the death duties in the case of the death of a person in Alberta, because the transfer agent of the company will require a clearance from the succession duty authority of the province of either, say Ontario or Quebec. I must confess this causes some problems in cases where there are multiple transfer agents. For the life of me, I cannot see how the provinces of Ontario or Quebec can say they have the right to levy succession duties on the estate of a person who has lived solely in the province of Alberta. The only connection with the province of Quebec, say, would be that the estate owns some shares in a company that happens to have its head office in Quebec and therefore succession duties have to be paid on that basis.
It is true that we may not be able to do much about this, but I think it is completely wrong. The valuation of the shares may be based on the operations of the company outside the province of Quebec, especially if it happens to be an interprovincial company. I am only using Quebec as an example, and I do not say that this province alone acts in this fashion.


Edgar John Benson: First of all, I should like to deal with the two questions raised by the hon. member. Paragraph 3 deals with the taxation of the capital of a trust fund where the deceased has kept the income or reserved a benefit in the fund.
The problem of situs raised by the hon. member is a difficult problem. The position of the provinces in this regard is that the law which governs them arises out of the common law and they are not able to vary the common law. It arises out of decisions over the years, whereas the rules used by the federal government in the Estate Tax Act are statutory, although generally based on the common law.


Marcel Joseph Aimé Lambert: I think it is the reverse. With the greatest respect I think so, in that the situs principle adopted by the provinces is that which applied to land, whereas the common law concerning personal property is

that personal property follows the domicile of the owner. But in these cases they have taken the real property principle, that is, that ownership of shares and taxability of shares should be governed by the situs of the head office.


Edgar John Benson: I am informed by the officials that what I stated a few minutes ago was correct, and that provincial situs of shares, which was the particular question raised, arises out of the common law, so that the situs is the point at which they are transferred rather than the point at which they are resting.


Mr. Flemming (Victoria-Carlelon):: My question concerns paragraph 3. To my knowledge there are a good many estates that are left to a beneficiary for the lifetime of the beneficiary, and in most cases on the death of a beneficiary they go to children. Is it contemplated under this paragraph that the interest which, say, a widow has had in an estate for the period of her lifetime shall be included in property declared by her at her death?


Edgar John Benson: The answer is no.


Hugh John Flemming: Because she would be taxed twice if that were the case.


Edgar John Benson: The answer is no.


[Stage Direction]
Resolution agreed to.
Resolution reported and concurred in.

Hon. W. M. Benidickson (for the Minister of Finance) moved: for leave to introduce Bill No. C-94, to amend the Estate Tax Act.
Motion agreed to and bill read the first time.


CUSTOMS TARIFF
William Moore Benidickson: the second reading of Bill No. C-92, to amend the Customs Tariff.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon-[DOT] Mr. Batten in the chair.
On clause 1-Schedule A amended.
Edgar John Benson: Mr. Chairman, this bill provides for the implementation, without change, of the proposals which were set out in detail in the budget resolutions, and which the committee of ways and means already has examined on an item by item basis.
There is not much I can say about the substance of this bill without repeating what has been said already when the resolutions

were considered in committee. For this reason my remarks will be brief and confined to the structure of the measure.
Hon. members will note that clause 1 of the bill provides that certain existing tariff items be struck out and that there be substituted therefor the revised items which are set out in detail in Schedule A. This schedule is divided into two parts which implement resolutions 1 and 3 respectively.
No doubt many hon. members will recall that resolution 1 dealt with a negotiated package of tariff items arising from two tariff board reports, and that resolution 3 proposed a mixed bag of miscellaneous amendments. All of these were relieving or clarifying provisions. We1 have already been through the list once. Accordingly I shall say no more about it, except to repeat that this miscellaneous group of proposals does not include a single tariff increase. This is not, of course, the case with the negotiated package set out in Part I of Schedule A. It is a selfbalancing package including both increases and reductions.
Clause 2 of the bill provides for the new drawback item that was proposed in resolution 2. It is as recommended by the tariff board in its report on reference 129, tableware and glassware for decorating.
Clause 3 of the bill is the coming into force provision and flows from resolution 4.
As I said earlier, this bill implements what was proposed in the tariff resolutions without any change of substance whatsoever. Indeed, even the changes of form are the minimum necessary in order to convert the resolutions into statutory form.


Marcel Joseph Aimé Lambert: Mr. Chairman, there are a few points I would like to raise in regard to the detail under clause 1, and since I shall be dealing with the schedule, I might be permitted certain leniency in this respect so that we can clear up our discussion that much sooner. I am particularly concerned as to the implementation of the recommendations of the tariff board with regard to oil country goods, that is goods that may be manufactured in Canada under licence and which go into oil production.
These resolutions, as included by the Minister of Finance in his budget proposals, arose out of a reference to the tariff board of some years standing, and which covered not only goods entering into the production of oil and gas but also goods in connection with the mining industry. I was very pleased to see the present administration followed what I felt had been the philosophy of the previous administration in this regard. I say this because I think these provisions should, in the long run, provide our industry, not only in central Canada but in Alberta
Customs Tariff
with a strong shot in the arm. Canadian industry involved in the production of goods and machinery for the oil industry has been subject to a disproportionate tariff balance as compared with United States industry.
As we know, when the oil industry started in this country back about 1947 Canadian facilities for the manufacture of any of this equipment were practically non-existent. But with the passage of time various business concerns have branched out into this field of activity and other firms have been founded to engage in the manufacture of these goods, a number of them by specialists in this industry who had come from the United States or from the United Kingdom. We know that in several cities of western Canada, particularly in Calgary and Edmonton we now have an extensive secondary industry in this regard.
One of the first steps to be taken was the provision of tariff protection for the manufacture of sucker rods, and an extensive business was established in Edmonton as a result. As a matter of fact, one concern which had gone bankrupt was able to get back on its feet and is now a very successful enterprise. I should like to know whether the parliamentary secretary can advise as to what extent the government considers it possible to forecast an increase in the manufacture of oil country goods in Canada as a result of these steps. I am looking for some technical information which was, I believe, at the disposal of the previous minister of finance, in order to encourage the government to enter upon this type of change. If it is only done as a matter of course in answer to representations, one wonders why it is being done at all. I think it is obvious the government has felt that these steps will lead to an increase in the manufacture of oil country goods in this country, and maybe some yardstick could be given us.
With reference to the term "oil country goods" and item 491 as it appears in the first schedule, I should like to know whether this will include specialized equipment having to do with the development of tar sands. As we understand it, the production from tar sand will not come from wells-


Edgar John Benson: If the hon. member will permit me to interrupt, this is dealt with specifically in item 492c of schedule A.


Marcel Joseph Aimé Lambert: Oh yes. Then perhaps the hon. gentleman could tell us what margin of protection is now being given. There has, naturally, been an exchange of some concessions in bargaining to lead to these tariff changes, particularly in the most favoured nation category. Previously, if the goods were

Customs Tariff
of a class or kind not made in Canada, in the most favoured nations tariff category the rates could go from 22J per cent to free. Now there is a standard 10 per cent.
To turn to another matter, under item 492(d) we know that there will be permitted free entry into Canada of materials for use in the manufacture of goods set out in tariff items 491 and 492. I should like the parliamentary secretary to tell us why. If it is intended that there should be a moderate degree of protection to Canadian industry manufacturing the finished goods, then the person or firm providing the materials which enter into the manufacture of those goods should enjoy a similar degree of protection. Let us take bolted steel tanks. I do not know what level of tariff would be imposed on the sheet steel which goes into the manufacture of the tanks. But if my interpretation of 492(d) is right, a foreign manufacturer of sheet steel used for the manufacture of steel tanks would enjoy free entry into this country if he could bring in the material under the terms of this item 492(d). The Canadian manufacturer has a choice; he can obtain his steel either from a Canadian manufacturer or from abroad. Would the parliamentary secretary advise me whether my thinking on this has been correct-that the manufacturer or furnisher of materials entering into the manufacture of oil country goods does not derive the protection which is given to the manufacturer of goods as envisaged in these particular tariff changes?
I have one last question and it has to do with the purpose of item 848. The amendment reads:
Drilling bits, n.o.p., and parts thereof, for use In exploratory or discovery work in connection with, and development, depletion and production of, petroleum or natural gas wells.
These items are to be admitted free. I am wondering why drilling bits, which can be manufactured in Canada and which, I would feel are brought in under some other item which is covered by some form of duty, should now be admitted without liability for duty. These are the questions I have to raise in reference to the oil country items and if the parliamentary secretary would reply to them I think I am just about clear as to the others.


Edgar John Benson: First, as I mentioned in my introductory statement, the purpose of the first two resolutions is to implement the recommendations of the tariff board with regard to oil country goods. I might tell the committee again that there were increases in some items and decreases in other items but, generally, there was an overbalance toward an increase as compared with a decrease. We had to make concessions with regard to

bread, wax and barytes in order to negotiate the package with our trading partners.
Of course, with a slightly increased tariff one would hope there would be an increase in manufacturing or, at least, a maintenance of the scale upon which these particular goods are manufactured in Canada. However, I think it is impossible to forecast exactly what will happen because so much depends on what will happen in the oil industry itself. If it goes well, then, of course, we believe that manufactures associated with it will continue to expand. Indeed, that probably would be the case without the tariff changes. I should like once again to stress that the oil industry and the manufacturing industry seem to be satisfied with the changes and there have been no complaints to us about them.
First of all, Mr. Chairman, under item 492c machinery and apparatus used in extracting oil from shales and sand will be dutiable at the same rates as similar machinery and apparatus used in connection with oil wells; that is, at rates of 5 per cent British preference and 10 per cent most favoured nation, when of a class or kind made in Canada, and free when not made in Canada. This will provide an incentive for Canadian manufacturers to produce some of this equipment as the demand for it expands, while at the same time affording duty free access to imported equipment of a kind which cannot be obtained in Canada.


Marcel Joseph Aimé Lambert: Mr. Chairman, would the parliamentary secretary please advise me how the sales tax applies here. Is this one of those items which, if it is imported free of duty, will not attract sales tax, or is it free of sales tax in any event?


Edgar John Benson: I cannot answer that question off the cuff, Mr. Chairman. I shall be pleased to look into the matter for the hon. member. It requires looking into the Excise Tax Act, which is not being considered at the moment. I will look into the matter and advise the hon. member of the position.
Machinery and apparatus of a class or kind not made in Canada for producing unrefined oil from shales was duty free under item 410c (i). If made in Canada, it was dutiable under item 427(1) or 446a at 10 per cent B.P. and 22J per cent M.F.N. Machinery and apparatus for extracting oil from oil sands was duty free under item 410c(ii).
With regard to item 492d, the reason materials entering into these items were made duty free was that in some instances there would have been serious anomalies where items were themselves subject to only a 10 per cent duty when coming into Canada-there was a 10 per cent protection for them in Canada-but

-the goods used to manufacture them would have been coming into this country at varying rates up to 221 per cent. This was really put in to tidy up the tariffs with respect to the items used in the manufacture of these goods.


Marcel Joseph Aimé Lambert: This was a negotiated item, was it?


Edgar John Benson: Yes, it was a negotiated item within the whole package. The other item mentioned was No. 848, and I should point out in respect of this item that in volume 2 the board recommends free entry for bits not manufactured in Canada, and previously, there were rates of 5 per cent B.P. and 15 per cent M.F.N. on those made.
Clauses 1, 2 and 3 agreed to.
Schedule A agreed to.
On schedule B.


Marcel Joseph Aimé Lambert: Mr. Chairman, with regard to item 237a, would the parliamentary secretary give me an explanation as to the date July 1, 1966 with regard to deuterium oxide and heavy water. Has this any relationship to the possible production of deuterium oxide in Canada after that date?


Edgar John Benson: This extension for a two year period allows one to look at the position at that time and reconsider it in view of developments within the country.


[Stage Direction]
Schedule agreed to.
Title agreed to.
Bill reported.
William Moore Benidickson: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


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 notices of motions.



AGRICULTURE


Mr. Jack Roxburgh (Norfolk) moved:: That, in order to ensure the continuance of the vital part being played by the tobacco industry in the economy of this nation, this house is of the opinion that the government should consider the advisability of providing a much larger grant of money to be used toward research and experimental work in the production and processing of tobacco.
He said: Mr. Speaker, I would like to point out as briefly as possible the value of tobacco farming to the people of Canada and to those
Tobacco Production Research of Ontario in particular. However, before doing so may I say I have neither direct involvement nor financial interest in the farming, the manufacturing or the distributing of tobacco. However there is one thing that I do have, and that is a direct concern for all the people involved in all these activities. Whether we call it health or whether we call it economic life, just let us remember that we are dealing with people, and people are my immediate responsibility and the responsibility of all members in this house. Until about 40 years ago the sandy wasteland along the northern shores of lake Erie was of little value from an agricultural viewpoint. The provincial governments of that time spent millions of dollars in reforestation programs and reclamation projects. Then in the 1920's tobacco culture started to transform this unproductive land into one of Canada's most prosperous farm areas. Within the last 36 years flue cured tobacco produced in Ontario, and on this land in particular, has increased from some 5 million pounds to close to 200 million pounds. In dollars and cents, it has increased from a $2 million industry to a $100 million industry today.
Just how well this former wasteland is utilized becomes apparent when one considers that flue cured tobacco produces by far the highest farm value per acre. In 1962 it was $788 per acre, which was only exceeded by an all time high of $881 per acre in 1960, compared with $46.50 which is the average for all remaining field crops in Ontario. This works out, by the way, to a ratio of 17 to 1. In all, tobacco accounts for about one fifth of Ontario's gross value of field crops and 10 per cent of the province's total farm cash income from the sale of all farm products.
Canadian tobacco farmers now supply over nine tenths of the basic raw material used by the tobacco products industry, which employs about 10,000 people. I should like to draw attention to the fact that the annual selling value of factory shipments totals approximately $600 million, including excise duties and taxes, the bigger percentage of which, incidentally, flows into the federal tax coffers.
Yes, Mr. Speaker, the tobacco industry is the most highly taxed of all industries in the Dominion of Canada. I will not go into detail on this aspect of the industry, but I should like to point out that the federal tobacco taxes provide 7 per cent of the federal budgetary tax. This certainly contrasts very sharply with the picture in the United States, where tobacco taxes provide 2 per cent of the federal budgetary tax revenue. Yet the government of the United States believes that the tobacco industry is so important to the economy of that nation that a multi-million dollar crash
2998	HOUSE OF
Tobacco Production Research program on research to remove health hazards from smoking has won full approval. In comparison, our Department of National Health and Welfare set aside some $200,000 over a five year period, which means about $40,000 a year, which I should think is hardly enough to buy postage stamps to carry on an effective campaign in research.


Mr. Hales:: Mr. Speaker, I think the hon. member meant to say $600,000, not $200,000.


John Maxwell Roxburgh: No, it is $200,000. The other $400,000 has nothing to do with research but is connected with educating the children in schools. I am talking of the research program itself, which is exploring the reasons why people are smoking. The other $400,000 has nothing to do with research in the way I am sure most of us would think of research. However, I will come back to this question a little later on.
In the meantime I should like to bring to the attention of the house some important facts relating to the tobacco industry and to present Your Honour with a few illustrations. I am sure that everyone in this house as well as the people of Canada will agree that the building of the St. Lawrence seaway was a tremendous and courageous task, not only with regard to its construction but also in the raising of the money. Hon. members may ask, what has this to do with the tobacco industry? I would say simply this, that one year's federal excise tax on tobacco would provide 80 per cent of the original cost of the seaway. Or, in dollars and cents, that means something like $400 million a year, or better than $1 million a day.
In these days of demand, both by the government and by the people of Canada, for industry in Canada to be Canadian controlled, it is gratifying to know that here is one industry that is as close to being 100 per cent Canadian operated as can be hoped for. In 1926 Canadian tobacco represented only about one quarter of the cigarette tobacco consumed in this country. Today it is 99 per cent.
Do you realize, Mr. Speaker, that tobacco farmers hire some 50,000 seasonal workers and pay them some $35 million a year as wages; and that the use of insecticides and fertilizers by these tobacco farmers runs into millions of dollars annually? Do you realize that there are something like 90,000 retailers selling tobacco throughout the country and doing $130 million worth of business? Do you also realize that 500,000 pounds of string similar to that used by stores to tie up parcels is used by tobacco farmers to tie up their tobacco in the fields? Do you realize, for example, that the provision of cigarette paper alone is a $2 million a year business;


that cellophane is a $3 million a year business; that filters are $6 million a year business; that foil is a $5 million a year business; and that cartons for shipping purposes are a $10 million a year business? I just offer those few thoughts to show the part the tobacco industry is playing in the economy of this country.
Coming back to the farmer himself who grows tobacco, what he and his land means to the community and to the surrounding areas in terms of dollars and cents is astounding. For example, let me take property taxes. I could give a number of examples, but in order to save time I will give only one, that of a general farm situated on light soil. This farm has been owned by the same family for over 100 years. The property tax on that farm is $416. A nearby tobacco farm on similar soil, with only 102 acres-48 acres less-has a property tax of $1,223. In other words, in the case of two farms on similar soil, one a tobacco farm and the other a general farm, the tobacco farm is returning to the community three to four times the amount of tax of the other farm. May I add -and this is ironic-that the man who owns the tobacco farm, which used to be practically waste land, has to go out and work extra hours in order to make a living. His job is that of a carpenter and he has to build tobacco kilns in order to help balance things out a little.
In the tobacco counties of Norfolk and Elgin as well as Essex, Oxford, Brant and Durham, the municipal services which have been provided have been based on the revenue from flue cured tobacco. Without this revenue the counties' whole economic structure would collapse. For example, the debenture issue outstanding would be an impossible burden on the taxpayer. In Norfolk county alone the additional tax on tobacco land, assessments on kilns and greenhouses, and so forth, amount to something like $17.5 million annually. So I am sure you can readily understand, Mr. Speaker, that the impact of tobacco is tremendous both on this and on other communities where tobacco is grown. Tobacco affects every business from the barber to the banker. Said a banker in the town of Tillsonburg: "Around 68 per cent of the business of this town is contingent on tobacco".
May I now deal directly with the motion, which asks that more money be set aside not only for experiment and research in relation to smoking and cancer, but also, and this is very important, at the ground roots level in the production and processing of tobacco under the supervision of the federal experimental farms at Delhi and Harrow, Ontario.

Talking of research, I feel sure that there is a field of research in the tobacco industry that has been given little or no thought, and that is for tobacco to be put to other uses. I should like to see very extensive research done along this line to be sure that this plant cannot be used for other purposes. To a degree it is now. We all know that there are a great many products emanating from industries which have no connection whatever with the original products of these industries. The best example I can think of is the dairy industry; and the best example of that industry is milk. No one would have thought a few years ago that milk, which is babies' food, would be used in the production of plastics. There is a future in everything and we have to give this full consideration.
There is little doubt that in the past few years the tobacco industry's experimental work in Canada has come almost to a standstill. I am talking about the experimental farms at Delhi and Harrow. Other countries were helped to get going in the production of tobacco by the tobacco industry in Canada and by the experimental stations at Delhi and Harrow in particular. Now these countries are moving far ahead of Canada.
One of the best examples I can cite is Rhodesia. The Rhodesian government and growers realize that if the industry is to go ahead they must have the latest information in research along all lines from plant pathology to selling. Because of this belief the experimental station in Rhodesia employs somewhere around 60 people, from top scientists to ordinary help, which is about four times as many as in Canada. These men are working in many different departments such as agronomy, entomology, plant pathology, engineering, which has to do with producing tobacco machinery, soil chemistry and so forth. They are also putting great effort into research at the Rhodesian station in order to sell tobacco. The result is that 90 per cent of the tobacco grown in Rhodesia is sold outside of that country. Even Japan, India and Australia are going ahead by leaps and bounds in the tobacco industry. Australia, with only a quarter of the tobacco acreage that we have in Canada, has as many, if not more, scientists working on tobacco research as are employed at our own experimental farms in Canada.
As the member of parliament for a tobacco county, may I point out that the county of Norfolk produces almost half the tobacco grown in the Dominion of Canada. I feel it is my duty to bring these facts to the attention of the house. However, I should like to add that the Department of Agriculture, under the very able leadership of Hon. Harry Hays, is
Tobacco Production Research giving this situation a thorough check and I have no doubt will be doing something to solve the problem of research in the not too distant future.
All that is required, of course, is money. Where is it going to come from? I do not know, but over the last 10 years the federal governments of Canada received over $3 billion in excise duties and taxes from tobacco. Back in 1952 the amount was $250 million while at the present time it is well over $400 million annually.
These moneys have been used for many purposes by the governments of Canada in the form of subsidies and so forth for many industries ranging from gold mining to agriculture, but they have never been used to any account at all to help the industry from which the moneys were derived. The former government did give backing to the banks so that the growers' organization could have money to process their tobacco, and the present government sent a mission overseas to see what they could do to sell tobacco. It was fairly, but not fully successful. To my knowledge this is all that has been done for the tobacco industry by the various governments over the years.
To those who say that Canada can import tobacco and still receive such taxes I will only say at this time that this is not as practical as it may seem and it will not return the same over-all amount of money. I should like to impress on all members of the house and the government in particular that the fact still remains that the Canadian tobacco industry is the highest taxed industry in Canada. Let us not forget that it is an industry which, if it remains as it is or increases in size, will continue to return to the government of Canada millions of dollars annually not only in the form of taxes but through the over-all economy of the nation itself.
It is certainly to the advantage of the government of Canada to keep such an industry well and flourishing. Therefore, is it not just common sense to take earnings from the business itself and put them to use to better that business? I know that moneys for government projects are taken from the general fund and I realize that this is the only practical way. However, why not base a grant for tobacco research programs on say 5 per cent of the income received by the government from the tobacco industry, which would amount to roughly $200,000 a year, not $200,000 in five years?
In summing up I should like to say that this government or any government cannot afford to let a business such as the tobacco industry go backward without making a real effort to sustain it. There is one way to help it and that is through an effective research

Tobacco Production Research program. Money will be required. The business itself is giving that money to the government. Why not make use of a percentage of it to assist the business? Now, as never before, research is needed in the tobacco industry. Therefore I appeal to the government to see that moneys will be advanced for research and experimental purposes relating to the tobacco industry.


James Alexander McBain: Mr. Speaker, this motion of the hon. member for Norfolk (Mr. Roxburgh) suggests that the government give more consideration to providing a larger grant of money for research into the production and processing of tobacco. I would suggest that the hon. member should have added a few additional words and included after the word "processing" the words "marketing at home and abroad".
Let us review briefly the Canadian tobacco industry from the production standpoint. The production of tobacco first started in the province of Ontario in the counties of Essex, Kent, Elgin and Norfolk and later was introduced in the counties of Oxford, Brant and Middlesex and many others in the province. The first crops grown were cured by air. The air method of curing is by cutting the whole plant, splitting the stock and hanging it over a lath in a barn with partially open sides to allow the air to circulate around the plant and eventually to cure it. This method is still used in the production of burley tobacco.
By scientific research it was found that tobacco of the flue cured variety could be successfully grown on the more sandy soils in the counties I have mentioned. By this method of production and curing with the use of heat it has been possible to produce in Ontario cigarette tobacco of the finest quality of any country in the world.
Let us look at these areas that now produce this crop, tobacco, as they were previous to 1920 and to the first growing of tobacco crops. I happen to be old enough to remember my visits to the county represented by the hon. member for Norfolk, when a trip by car from my home in St. Thomas to the famous sandhills, a distance of less than 50 miles, was an experience to remember. In those days, on a trip through what is now some of the best tobacco land in the world the roads were only ruts in the sand, and once the wheels of the vehicle entered the ruts it was like being on the rails of a railroad. When you met an oncoming vehicle you had to look for a side track and endeavour to get your vehicle into that siding in order to let the other one pass. Many farms were abandoned, and those who were endeavouring to eke out a living were only able to do so by sacrificing repairs to buildings, fences, bams and so forth.

This county was very familiar to me as a young lad because it was the birthplace of my mother and from her I had learned of the hardships and privations of pioneering in this land that was later to be known as the producer of green gold. The hon. member has referred to land values. In those days land values in the tobacco areas ranged from $10 to $30 per acre, depending on the buildings and the amount of cleared land.
With the coming into production of flue cured tobacco, we find that in the space of less than 40 years a tremendous change has taken place in the complexion of this tobacco growing area. It is quite common today for a tobacco farm fully equipped with kilns, greenhouses, packbarn and other equipment, to sell for $1,000 per acre. As a result of this increase in land values and assessment, municipal councils have been able to show tremendous improvements by providing better roads, new schools, more drainage and so on. We have today some of the finest farms in Canada in the tobacco growing areas of Ontario, and they are a distinct asset to any community.
Tobacco growing has spread to many other areas in eastern Canada. In the province of Quebec the area represented by my colleague, the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon), is the chief producer of flue cured tobacco. We now learn that several Ontario growers have purchased some
1.000	acres of land near Shawville, about 50 miles northwest of Ottawa, and will be opening up a new area for production next year. Tobacco growing in the maritime provinces is a relatively new industry and is meeting with considerable success, as well as a few failures. Last year Nova Scotia produced
228.000	pounds from 218 acres grown by some eight growers. In New Brunswick seven growers produced tobacco on 120 acres with some increase in production over the previous year. Prince Edward Island has been the largest producer in the maritime provinces and had in production about 450 acres in 1963. It can be seen, therefore, that this is not a regional product but it is grown now and has been grown in six out of the ten provinces. In years past British Columbia has produced small amounts of tobacco. To date, there are over 4,600 farms with rights to produce tobacco in the province of Ontario, or less than 4 per cent of the province's commercial farms. Gross revenues from these farms will exceed $90 million. In other words,
9.5	per cent of Ontario farm cash income was derived from tobacco.
Flue cured acreage has been only about
1.5	per cent of all field crop acreage in Ontario, and the farm value of the tobacco

produced was 20 per cent of the value of all field crops. Farm values per acre produced were more than double that of any other major field crop. Tobacco has been produced in Ontario under strict acreage control methods in order to keep production within the needs of domestic and export requirements. Despite the reduced acreage for each of the last three years, growers have produced over 100 million pounds of tobacco each year. This has occurred as a result of favourable growing conditions, better production methods and better varieties less subject to blight, as well as irrigation and many other factors.
Despite the rosy picture of the past history of tobacco, growers today, on the eve of a new crop year, find themselves faced with a very uncertain future. At the present time some 15 million to 20 million pounds of the 1963 crop has yet to be sold through the auction exchanges. The growers themselves have agreed to cut their acreage by 55 per cent for 1964. The average daily price of around 50 cents per pound has dropped to an average of less than 32 cents. The government has refused to help the tobacco farmers as a result of their request for assisting in processing the unsold tobacco. A support price was put on tobacco, but it is only a moral support since it does not assist the producer by giving him more money for his tobacco. It appears that the support price was placed low enough that the government would not have to spend a penny in supporting this crop. The average price on the crop sold to date is less than 49 cents and unless the average drops to below the 47 cents support price, no money will be paid to the growers.
Now, let us look at the other side of the coin and see the revenue that is derived from the tobacco industry by the government. No other agricultural product is taxed like tobacco at the present time. From each cigarette smoked, the government receives nearly one cent in tax revenue. It is estimated that all forms of tax revenue derived from tobacco net the government around $400 million yearly. I have no hesitation, therefore, in supporting this resolution and further recommending that at least one per cent of the $400 million be set aside as a fund for research and to further export sales of tobacco. This money might also be used, when necessary, to subsidize the export of tobacco.
In 1962 when the Ontario flue cured tobacco growers were having difficulty marketing their crop, the Conservative government helped them to remove unsold tobacco from the market, to have it processed and stored. This surplus tobacco was paid for by government guaranteed bank loans of up to 80
Tobacco Production Research per cent of the grade prices, and assistance was also given with the processing and storing. The growers themselves agreed to deduct one cent per pound from their 1961 crop income to assist in taking this surplus tobacco off the market. Recently the Ontario flue cured tobacco growers' marketing board have allocated $60,000 to promote the export of Ontario tobacco. About $25,000 of this money will be used to hire a tobacco export promoter and to pay his expenses while travelling abroad. I wish to commend the board at this time for initiating sales of tobacco to European and Asian countries, and opening up new markets for Canada not previously enjoyed.
However, the whole tobacco industry is now experiencing difficult times. It was only a few weeks ago that the Imperial Tobacco Company of Canada, the largest and oldest of the tobacco companies in Canada requested the consent of their shareholders to embark upon a non-tobacco business. An official of the company reported to the annual meeting that they have recently laid off 100 employees as a result of the drop in cigarette sales following the publication of the lung cancer report by the surgeon general of the United States. At the same time Imperial reported a 10 per cent drop in profits for 1963, Rothman's Limited, one of the newer cigarette companies, broke its selling record last year in Canada, sold cigarettes to the value of over $61 million and made a net profit of 70 cents a share which was a record for that company.
I know there are other speakers who wish to present their views on this important phase of our agricultural economy. In closing, may I say I hope the government will take this resolution into consideration and immediately introduce legislation to provide the necessary funds to assist this industry to maintain the place it once held, and should still hold, in the economy of Canada.


Mr. J. E. Brown (Brantford):: I do not
hesitate for a moment in rising to support the motion of the hon. member for Norfolk (Mr. Roxburgh) which is now before the house. The hon. member referred to the vital part being played by the tobacco industry in the economy of this nation, and it is indeed a vital part.
In speaking of this industry I want to refer particularly to the tobacco growers. In my constituency of Brantford a decidedly important part is played in its economy by the tobacco growers. In the township of Burford the total assessment is $6,982,043 for the year 1964, and of this amount a large percentage represents the assessment levied on the tobacco farms in the township. In the township of Oakland the revenue from

Tobacco Production Research the assessment on tobacco farms is similarly high, and in the township of Brantford, surrounding the historic city of Brantford, the tobacco growers contribute a very high percentage to the municipal treasury.
I am told that the highest grade of tobacco grown in Canada is grown in my constituency. I hesitate to estimate what would happen to the economy of my constituency were these growers suddenly deprived of their source of revenue, either by questionable propaganda against tobacco or unfair trade practices. The loss of purchasing power and the loss in investment that might be expected by these growers could be so great as to dislocate the entire economic structure of my constituency.
I have heard it said that we do not need to waste any sympathy on the people engaged in this agricultural enterprise, that they have entered into the agricultural picture only in recent years, that they have made lots of money, and that they grow a product which only injures health. Of these last two allegations, one is false and the other is not yet proven. Tobacco growers have not made lots of money. I will not deny that money may have been made by speculators in the purchase and sale of farms, but not by the growers as such.
The growers have made a livelihood, but when one considers the enormous investments made by individuals, first in the purchase of farm lands, buildings and equipment, and then when one considers the high mortgage indebtedness, the interest on loans from banks and individuals, the hard work, long hours, of whole families, men, women and children, the profit made is surprisingly low. I have said these growers have worked hard, but I must add that their stake in my community is high.
I heartily approve of the government considering any proposal to grant more money to be used for research into the growing of tobacco, toward rendering it as harmless as possible to health, and generally toward assisting in any way this agricultural vocation, the vocation of tobacco growing, as a worthwhile enterprise and pursuit. I strongly support the hon. member's motion. I urge the house to vote for it and to assist this agricultural enterprise from unfair attack and false accusations due to a misunderstanding of recent press releases and statements made by responsible persons in the scientific and medical world.
There is no more highly respected group of individuals in my province than the tobacco growers. They do not want to come crawling to Ottawa asking for financial help. All they want is fair play, and it might be

wise for the government at this time not to engage in a campaign against smoking so much as to assist in more careful research than has hitherto been available.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I wish to join the speakers who have preceded me in offering congratulations to the hon. member for Norfolk (Mr. Roxburgh) for moving the motion now before us.
I believe that all the previous speakers come from Ontario, the province which has been recognized and is still recognized as a great producer of tobacco.
I commend, therefore, the hon. member for Norfolk for introducing this motion whose purpose is to request the federal government to make available a larger amount of money for the tobacco industry, in order to allow for research that will help tobacco growers across Canada.
Mr. Speaker, when one speaks of tobacco in this country, one refers especially to the province of Ontario, which is recognized as the largest producer. But I should like to remind the house that we have also, in the province of Quebec, a few regions which are quite well-known for their tobacco crops and where fine quality tobacco is grown. I refer in particular to my own region and that of Joliette-L'Assomption-Montcalm.
In my riding, we find a tobacco co-operative which, being 80 years old, is the oldest in the province of Quebec. Those last few years, unfortunately, we have discovered that tobacco growing is paying less and less and that a good number of farmers seem to be abandoning it more and more.
For instance, Imperial Tobacco, located in Shefford right in the middle of my riding, gives work to approximately 800 people and manufactures all kinds of tobacco products. And, as stated by the hon. member for Norfolk a few minutes ago, the tobacco industry is the most heavily taxed in Canada.
As a matter of fact, 7 per cent of the federal budget is derived from taxes on tobacco, whereas in the United States the federal budget gets only 2 per cent of its revenue from that source. Here, every day, the federal government takes in between $20,000 and $25,000 in excise tax on the various tobacco products manufactured.
All this to say that the hon. member for Norfolk was certainly justified when he stated, supported by figures, that the tobacco industry was the most heavily taxed in Canada.
Mr. Speaker, out of the $400 million paid in the treasury by way of taxes of all sorts on tobacco, only 1 per cent is applied to research, and I entirely support the view of the hon. member for Norfolk who suggested

that the federal government should give higher grants for research in order to help the tobacco industry.
Mr. Speaker, it is recognized that tobacco growers of certain areas of Ontario and Quebec have to solve different problems.
It is a fact that tobacco is grown in Ontario as in Quebec but, on the other hand, neither the soil nor the climate is always the same. Yet, it is possible to grow about the same kind of tobacco. That is why I think that if some areas received more money, it would certainly help solve the problem of the various tobacco growers. It would also help the marketing of all kinds of tobacco products.
Mr. Speaker, I think that it is possible to help the tobacco growers, and what has affected the industry the most recently-though it has not yet been proved, I am told-is the statement that smoking tobacco and cigarettes may be a cause of cancer. That is precisely why I believe that the research council which has been mentioned in this discussion should receive larger grants, in order to put a safe tobacco on the market. Nowadays, cigarette smokers and tobacco consumers are not yet convinced that cigarettes are innocuous in this respect. They still have some doubts on the matter and that affects the tobacco industry.
Now, Mr. Speaker, I feel it is urgent, in view of the well-known publicity and the suspicion prevailing among the public that smoking is the cause of a certain disease, that the government take action in this regard to prevent any more wrong from being done to our tobacco growers who are concerned because they are not sure whether they shall be able to grow tobacco in a few years from now and whether they should improve their methods of tobacco growing. Farmers who specialize in tobacco growing do not know in the least what to do at the present time.
As for me, I agree with the hon. member for Norfolk (Mr. Roxburgh) who was shrewd and wise enough to introduce such a motion. I hope that the federal government will carry out his suggestions in order to relieve the farmers and to dispel the present confusion in the field of tobacco growing.


Wallace Bickford (Wally) Nesbitt: May I say at
the outset that I agree with everything said by the previous speakers, including the hon. member for Norfolk (Mr. Roxburgh) who presented this motion. I do not wish to repeat what other hon. members have said, but I should like to add one or two additional thoughts. I believe that, despite the present criticism of tobacco products, cigarettes in particular, this industry can be expanded in Canada. Since the amount of land available
Tobacco Production Research in the appropriate climatic area of the country is limited, I think the suggestion made by the hon. member for Norfolk is an excellent one.
I believe his suggestion would be greatly assisted if the resolution could be referred to a committee of this house, perhaps the standing committee on agriculture, where scientists and agricultural experts could be called as witnesses and outline methods by which the production and processing of tobacco could be improved in this country. I hope consideration will be given to this suggestion.
In addition, I think sales of tobacco products throughout the world could be increased. The Ontario flue cured tobacco marketing board has done a great deal in this regard recently, with assistance from the province of Ontario. Countries behind the iron curtain and in the Middle East have been visited, and I understand there is a possibility of sales of tobacco to those countries. A year or so ago arrangements were made with the government of Japan-and I may say I had something to do with them-for the purchase of Canadian tobacco. Tobacco, in Japan, is a government monopoly. Japan sent representatives to this country and a token purchase of half a million pounds was made. We hope efforts will be continued by the Department of Trade and Commerce to encourage sales to Japan.
There is a good deal more I could say on this subject, but maybe others wish to speak and I shall confine my remarks to the following aspect. There has been great talk about the danger of smoking cigarettes-I have in mind the report of the surgeon general of the United States, and other medical reports, from which it would appear that allegations concerning the dangers of the heavy smoking of cigarettes seem to be correct. As far as lung cancer is concerned, it does seem to produce a hazard to health. As has been pointed out by the previous speaker, the tobacco industry is far too valuable to be allowed to be wiped out by this threat to its existence. In view of the fact that billions of dollars have gone into the federal treasury over the years as a result of taxes on tobacco sales it would seem to me that money should be provided by the government in large sums annually so as to find the alleged cancer-producing substance in tobacco, and discover ways of removing it so that people who like to smoke may continue to do so without this health hazard which does appear to exist.
It is all very well for the government to allocate $400,000 so that the Minister of National Health and Welfare can put out propaganda against cigarette smoking. It would appear much more sensible to me if

Tobacco Production Research that money had been given to research institutions to try to find out ways of removing this cancer-producing substance from cigarettes, in view of the enormous value of this industry to Canada. It is imperative the government should do this. It is difficult for us to know how much should be spent each year on research into this matter and I think the best thing to do would be not only to have this resolution referred to the standing committee on agriculture, but also to the special committee of this house on food and drugs, where witnesses could tell us how research money could best be spent so as to achieve the object I have just mentioned. This work might best be done at the universities or by scientific groups. Perhaps it could best be carried out by commercial groups. In any case, I think it should be done. For this reason I believe the resolution should be referred to both the committees I have named, so that we can find out the best means of undertaking this very necessary research. I fully support the resolution.


John Watson MacNaught: I think this notice of motion is a very important one and one which should receive further study by a committee where witnesses could be called, and so on. If I might have the unanimous consent of the house I will propose an amendment which I believe would have the effect of sending the subject matter of this notice of motion to a standing committee. Perhaps, by unanimous consent, I can move, seconded by my colleague the Minister of Mines and Technical Surveys (Mr. Benidickson):
That the motion be amended by deleting therefrom all the words after the word "nation", and substituting therefor the following:
"The standing committee on agriculture and colonization be empowered to review the research and experimental facilities now provided to the production and processing of tobacco in this country and to recommend such measures as may be expedient to promote and assist in the production of Canadian tobacco."


Wallace Bickford (Wally) Nesbitt: I am wondering whether the acting leader of the house would not consider making a slight amendment to his amendment so as to refer the subject matter also to the special committee on food and drugs. I agree it should go to the committee on agriculture.


John Watson MacNaught: I believe that at a later date we might have another motion which would bring about that effect, if such course were thought at that time to be desirable.


The Acting Speaker (Mr. Batten):: Order. A motion to refer a question to a committee is not normally considered as an amendment.

I would therefore have to consider the hon. member's motion as a substantive motion, and under standing order 44, page 29, unanimous consent would be required. I inquire of the house now whether they give unanimous consent to the hon. member introducing his motion. Is unanimous consent given?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Batten):: Mr. Mac-Naught, seconded by Mr. Benidickson, moves: That the motion be amended by deleting therefrom all the words after the word "nation", and substituting therefor the following:
"the standing committee on agriculture and colonization be empowered to review the research and experimental facilities now provided to the production and processing of tobacco in this country and to recommend such measures as may be expedient to promote and assist in the production of Canadian tobacco".


Alfred Dryden Hales: Mr. Speaker, I will be just a few minutes in making these remarks. I would like to congratulate the hon. member for Norfolk (Mr. Roxburgh) for introducing this notice of motion and give him credit for having the great amount of courage that it must have taken to introduce into this house a resolution such as this asking his government to give grants to foster and promote the tobacco industry, when the Minister of National Health and Welfare (Miss LaMarsh) of that government has taken $600,000 of the taxpayers' money in order to try and stop people from smoking. So we have quite a paradox here this afternoon, and I would not want this occasion to pass without bringing to the attention of the hon. member that this paradox exists within his party. I therefore commend him for having the courage to bring this motion before the house.
I speak as one coming from an area that has one of the finest tobacco processing plants on the whole North American continent. I refer to the Imperial Tobacco plant situated in Guelph. The hon. member for Shefford has another plant of Imperial Tobacco in his area. If it were not for the producers of tobacco, this great industry in my riding would not be able to flourish and exist. Therefore, Mr. Speaker, I commend the hon. member for Norfolk for having the courage to overcome this paradox that has existed in his party, and I hope that when this matter comes before the committee we will be able to have further discussion on it.


Mr. E. F. Whelan (Essex South):: Mr. Speaker, I enter the debate at this late stage only because of the importance of this industry to my part of Ontario. In my area there are four factories that process tobacco. Our county is one of the oldest tobacco growing areas in Canada and this industry is still an

important part of our economy. The hon. member for Wellington South (Mr. Hales) has referred to one paradox. I should like to refer to another. I well remember that in 1958 when the Leader of the Opposition (Mr. Diefenbaker) was in Brantford, I think, he said they would do something about these unrealistic taxes on tobacco-and they certainly did; the minister of finance raised the taxes on tobacco shortly after that in order to provide more revenue for the govern-
6, 1964	3005
Tobacco Production Research ment. I have the utmost faith in the Minister of Agriculture (Mr. Hays) and his proposal that we do more with regard to research. I feel sure, knowing him as well as I do, that we can count on this being done.


[Stage Direction]
Amendment agreed to.
Motion as amended agreed to.
Some hon. Members:: Six o'clock.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday. May 7, 1964