1964-06-10

PRESENCE IN GALLERY OF CHANCELLOR AND FOREIGN MINISTER OF GERMANY

Mr. Speaker:: The house is especially honoured today by the presence in the gallery of two very distinguished visitors. On behalf of all hon. members it gives me great pleasure to welcome the distinguished chancellor of the Federal Republic of Germany, Dr. Ludwig Erhard, and his foreign minister Dr. Gerhard Schroeder.
In times past Dr. Erhard has visited Ottawa more than once as his country's minister of economics, the position from which he directed with such energy and skill the remarkable economic recovery of post-war Germany. This, however, is our first opportunity to receive him as chancellor of Germany.
In recalling the spectacular economic recovery of post-war Germany with which the chancellor is so closely associated we should not overlook another important development which is too little known and acknowledged; the establishment of a modern and stable parliamentary democracy in the federal republic. Our visitors have played a central role in the emergence of a new Germany and the establishment of a democratic society based on the dignity of the individual and the rule of law.
In this process the new German parliamentary institutions have played a most important role. Indeed, within the past few weeks we have had the pleasure of welcoming a group of German parliamentarians with whom we were able to have a most profitable exchange of views, and during the course of the next few days our own former Speaker, the hon. member for Edmonton West (Mr. Lambert), will be paying a personal visit to the Bundestag in Bonn.
Conscious of our common heritage and purpose, we are deeply honoured today to receive the German chancellor and foreign minister and to extend to them a warm "herzlich willkommen."


Hon. Members:: Hear, hear.



PRIVILEGE


Mr. Speaker:: If hon. members will bear with me I would like to make a statement on a question of privilege raised last Friday by the hon. member for Yukon (Mr. Nielsen). On Friday last the hon. member for Yukon rose on a question of privilege having to do with certain rulings of the Chair the previous day. The hon. member referred me to Beau-chesne's fourth edition, page 57, where is found the following citation:
The Speaker's jurisdiction does not extend to words outside the house.
The hon. member then added:
There is a reference there to May's Parliamentary Practice, thirteenth edition.
I might perhaps now allude to this reference, which will explain the quotation from Beauchesne:
In case of disorder the jurisdiction of the house is also extended to the lobbies. On the 11th April, 1877, on the numbers being declared after a division, complaint was made to the house by Mr. Sullivan of an offensive expression addressed to him by Dr. Kenealy in the side lobby during the division just taken. Mr. Speaker observed that, had the expression complained of been used in the house it would have been his duty to deal with the matter on his own authority: but, as the complaint referred to words used in the lobby, he left it to the consideration of the house and called upon Dr. Kenealy to explain his conduct.
In May's sixteenth edition at page 133, which I read to the house on Thursday, I find the following:
Alleged breaches of privileges or contempts committed out of the house or in the precincts of the house but not in its actual view may be brought to the notice of the house.
We may from the beginning draw two conclusions from these statements. The first is that contempts committed outside the house may be dealt with in the house itself, and I will refer to the existing precedents in a moment; the second conclusion to be drawn is found in a quotation from Beauchesne in paragraph 2 of citation 104, which is as follows:
(2) It has often been laid down that the Speaker's function in ruling on a claim of breach of privilege

Question of Privilege
does not extend to deciding the question oi substance whether a breach of privilege has in fact been committed-a question which can only be decided by the house itself.
On Thursday, June 4, without restating here the question of privilege, I said:
I am going to make a personal appeal to the right hon. Leader of the Opposition to withdraw those words or take other steps which will amount to a withdrawal . . .
I must confess that this might not have been the exact procedure which is usually followed. At that time I was thinking of another quotation of Beauchesne which is found in paragraph 5 of the same citation, 104:
(5) As a motion taken at the time for matters of privilege is thereby given precedence over the prearranged program of public business, the Speaker requires to be satisfied, both that there is a prima facie case that a breach of privilege has been committed, and also that the matter is being raised at the earliest opportunity.
When the leader of the New Democratic party rose on a question of privilege it was normal for the Speaker to assume, as the matter had taken place outside the house, that a motion would be made where the Speaker might have decided if there was a prima facie case of privilege. The usual proceedings would then have followed. This is in accordance with what is stated in the parliamentary dictionary by Abraham and Hawtrey at page 41:
If the Speaker decides that the member has made out a prima facie case, the member must make some motion in reference to the matter. He usually moves that the matter of the complaint be referred to the committee on privileges but he may content himself with moving a resolution to the effect that the act of which he complains constitutes a breach of privilege.
In other words, what the Speaker has then to decide is whether, assuming that the facts are as stated, the conduct complained of could be reasonably held to be a breach of privilege; and here I might in passing refer to what Abraham and Hawtrey say on page 40:
To constitute a breach of privilege a statement reflecting on the conduct of a member in his capacity as a member need not be x untrue but it must tend to lower the house in the eyes of the public.
In other words, as stated by Bourinot in his third edition, at page 152:
To constitute a breach of privilege such libels must concern the character or conduct of members in that capacity.
Parliament being the highest court in the land, Bourinot also writes in his fourth edition, at page 38, in relation to privileges:
Their extent and nature have frequently been subjects of controversy, but in the main they are

decided by the legislature itself and its decisions, speaking generally, cannot be called into question by any other court or authority.
Among the Canadian precedents in relation to alleged breaches of privileges or contempts committed outside of the house and dealt with by the house itself are the following cases, which I need not examine in detail: the Elie Tasse case in 1873; the Cinq-Mars case in 1906; the Miller case in 1913; a case in February, 1914, where Mr. Law rose on a question of privilege regarding newspaper statements; two other cases on the 8th and 15th of April, 1915; also on February 3, 1916, where a member complained of an article in the Toronto Star being incorrect in reporting him; then the Spear's case in 1920; and finally, the Sperry and Hutchinson Company case in 1960. There would be no great advantage in reviewing these cases at the moment.
Now to come back to our second point, that is that these matters are to be decided by the house itself; I must say that on Thursday last, the hon. member for Burnaby-Coquit-lam having raised the question of privilege and not having concluded by making a motion, I was put in the position where it was normal that I should allow the right hon. Leader of the Opposition to make an answer. Other members then rose on the question of privilege, among them the member for Winnipeg North Centre, the member for Ville-neuve, the member for Quebec-Montmorency, the member for Nanaimo-Cowichan-The Islands, the member for Parry Sound-Mus-koka; and it was at that stage that I did make a personal appeal to the Leader of the Opposition that he might, and I quote, "help us out of a very difficult situation at the moment".
I will now deal with the procedure on a breach or alleged breach of privilege and refer to Bourinot, fourth edition at page 63, where he states:
When the offence is contained in a newspaper, the latter must be brought up and read at the table unless the extracts are of an inordinate length and then the member must conclude with a motion founded on the allegation that he has brought forward. It is irregular to make such a complaint unless the member intends to conclude with a motion.
In consequence, the only obligation of the Speaker is and should be that, before putting the motion, he would decide if there is a prima facie case of a breach of privilege. If he does find a prima facie case then the house, as stated by Bourinot, at page 62:
Will consider whether the member has excused himself or whether he is guilty of the offence. If

the house come to the latter conclusion, he will be declared guilty of a breach of the privileges of the house.
Bourinot also states at page 64 that:
When a member has reason to complain of a speech made by another member outside the house, he must bring up the paper, but it is customary, as a matter of courtesy, to give notice of his intention to the member complained of and ask him formally whether the report is correct before proceeding further in the matter.
To give a last quotation from Bourinot, at page 305 the author writes:
When a member proposes to make a motion touching another member, it is frequently found convenient that he state his intentions in his place, and then give notice that he will move it when motions are called in due order on a subsequent day.
As to precedents in the United Kingdom, referring to the fact that the authority of the house supersedes that of the Speaker in the case of occurrences which have taken place outside the house, here are two such precedents which appear to be applicable.
On April 11, 1877, on a question of privilege raised by Mr. Sullivan complaining that an hon. member had called him a liar in the lobby, Mr. Speaker said:
If such an expression as that stated by the honourable member for Louth had been made within my hearing in the House, of course it would have been my duty at once to interpose on my own authority. The expression, however, was used in the lobby and it will be for the House to determine what course to take under the circumstances ... it becomes my duty to call upon the member for Stoke that he may be heard by the House in explanation of the statement made by the member for Louth.
Later on the Speaker repeated:
It is for the House to determine whether that observation should be withdrawn by the honourable member.
Then on July 21, 1887, respecting a question of privilege, Mr. Speaker made the following statement:
There have been repeated complaints made to name the members of this House in the course of the session, of language used in the lobbies which I have thought to be derogatory to the dignity and character of the house. The honourable gentleman was deeply pained and I told him that I thought that he was justified in bringing the matter before the house: that I thought it was not for me, in a case of that sort, to intervene; and that the House should decide for itself if he thought proper to bring the matter before the House.
However, in that case the Speaker did discuss at length what had happened in the house, and he concluded as follows:
I hardly know whether I have transgressed the bounds of my duty to the house in what I have
Question of Privilege
said; but I would respectfully urge the house, after the formal, distinct, and unreserved apology, as I regard it, that the apology should be accepted by the house, and that the house should no longer pursue this question.
In the same manner I might say myself that I hardly know whether I transgressed the bounds of my duty to the house last Thursday, but I was satisfied on that day that the withdrawal of the right hon. Leader of the Opposition should be accepted and that the house should no longer pursue the question.
Having regard to what I have said and to the numerous precedents I have quoted, I believe that it is quite clear, in respect to incidents which take place outside the house, that it is the house itself which has the authority and responsibility of resolving any questions of privilege. I suggest that hon. members in future when raising questions of privilege, such as those raised last Thursday, should at the very beginning of their speech advise the Speaker that at the end of their statement they will conclude with a motion so that, if such a matter is found to be a prima facie case of breach of privilege and also if it has been raised at the earliest opportunity, the house may deal with it according to the rules and the recognized practice.



COMMITTEES OF THE HOUSE

[Stage Direction]
Second report of special committee on defence-Mr. Hahn.
Second report of standing committee on standing orders-Mr. Asselin (Notre Dame de Grace).

[Stage Direction]
Mr. J. T. Richard (Ottawa East) presented the first report of the standing committee on railways, canals and telegraph lines, and moved that the report be concurred in.
Motion agreed to.


Hon. Guy Favreau (Minister of Justice) moved:: That the report of the joint committee of both houses on the library of parliament, presented to this house by Mr. Speaker on Monday, May 25, 1964, be now concurred in.


[Stage Direction]
Motion agreed to.
[Stage Direction]
Government Notice of Motion

[Stage Direction]
On the order:
Government notices of motion-The Minister of Transport-that the annual reports for 1963 of the Canadian National Railways and of the Canadian National Railways securities trust, the auditor's report to parliament for 1963 in respect of the Canadian National Railways, tabled on April 7, 1964, the budget for 1964 of the Canadian National Railways, tabled on March 30, 1964, the annual report of Trans-Canada Air Lines for 1963, the auditors' report to parliament for 1963 in respect of Trans-Canada Air Lines, tabled on March 6, 1964, and the budget for 1964 of Trans-Canada Air Lines, tabled on February 28, 1964, be referred to the standing committee on railways, canals and telegraph lines.
Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I wonder whether you would permit me to say that I understand there will be unanimous consent to adopt this motion immediately. If that is the case it would seem redundant to have it transferred from one order to the other, and I would make the necessary motion.


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


Some hon. Members:: Agreed.


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, we are prepared to give our consent, but one thing is surprising in the resolution. Usually budgets of the C.N.R. and Air Canada were referred to a sessional committee of the house -besides that is what the acting leader told us yesterday. The record shows that budgets of the C.N.R. and Air Canada are to be referred to a sessional committee of the house; it has always been so in the past. Now, today, request is made that they be referred to the standing committee on railways, canals and telegraph lines, when there is no mention of airlines among the subjects to be considered by that committee.
That is why I think this calls for an explanation by the Minister of Transport. Why this change of policy this year, compared to previous years?


John Whitney Pickersgill: Mr. Speaker, if I may be
permitted to say a word, there are two reasons. The first is that it is contemplated that there is going to be legislation which normally goes to the standing committee, and it was thought it would perhaps be better to try to

concentrate in one committee all those members really interested in transport questions so they would be continuously informed throughout the course of the session. The second reason is that we do seem to have a great deal of committee work going on during the present session, and a multiplicity of committees would create difficulty. I can assure all hon. members, if assurance is necessary, which I know it is not, that any substitutions of membership desired by any party will be promptly made by the whip.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

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

Mr. Macquarrie: 1.	Have the services of the surveyor general of Canada, or any other agency of the Department of Mines and Technical Surveys, been requested by either the government of Quebec or the government of Newfoundland regarding their announced intention to discuss the exchange of 22,000 square miles of territory in Labrador and northern Quebec.
2.	Have any departments of the government of Canada been advised of the projected boundary changes?


Mr. Lamonlagne:: 1. No.
2.	No.


TWELVE MILE FISHING LIMIT
Mr. Lambert: 1.	What is the effective date of the proclamation of the Canadian government of a 12 mile limit off Canada's coast line?
2.	Have any protests been received from foreign governments concerning the proclamation by Canada of the 12 mile limit?
3.	How does the government of Canada propose to enforce this 12 mile limit?
4.	What is the nature of the enforcement fleet referred to recently by the Minister of Fisheries on which Canada will rely?


Mr. Robichaud:: 1. Legislation to establish a 12 mile fishing limit was introduced in the Senate on April 30.
2.	I informed the house on April 27 that discussions have been taking place with countries which may be affected by Canadian action. We are hopeful that satisfactory arrangements will be worked out with countries concerned.
3.	As above indicated, legislation for this purpose has now been introduced.

4.	Approximately 26 patrol vessels are available and they will be supplemented by air patrols.


IMMIGRANT STATUS OF HAL BANKS
Mr. Coates: Does the government intend to cancel the landed Immigrant status of Hal C. Banks?


Mr. Badanai:: Since Mr. Banks' conviction is under appeal, it would not be appropriate to answer the question at this time.


SHARE IN COST OF UNDERGROUND
Mr. Prittie: 1.	Has the federal government received a request from the city of Ottawa asking that the government share in the cost of placing overhead wiring underground in the downtown area and, if so, when was this request received?
2.	Has any decision yet been made by the federal government?


Mr. Davis:: Yes. The previous administration received a letter from the mayor of Ottawa dated December 9, 1961.
2.	In a letter dated February 5, 1962, the Minister of Public Works replied to the mayor outlining an arrangement differing from that proposed by the city. The minister's letter stated that the federal government is prepared to concur in the placing of wiring underground where this is the policy of the municipality and where the contribution of the federal government is the same as any other property owner. However, in special cases, placing of wiring underground would be supported for aesthetic or other reasons where there is a clearly identified federal interest-for example, in those areas of Ottawa forming part of the national capital development.


INVITATIONS TO JUSTICE MINISTER, SKEENA CONSTITUENCY
Mr. Howard: Has the Minister of Justice been Invited to attend any function or visit any place in the electoral district of Skeena for 1964, and, if so, with respect to each such invitation, by whom was the invitation given, for what function or purpose, at what time or times, and has it been (a) accepted or (b) declined?


Guy Favreau: No.


R.C.M.P. BARRACKS CONSTRUCTION, PELLY, SASK.
Mr. Korchinski: Has the government purchased any land at Pelly, Saskatchewan, with the intention of constructing new R.C.M.P. barracks and, if so, what date was the purchase made, and when does the government intend to proceed with the construction?
Questions


Guy Favreau: Land was purchased at Pelly, Saskatchewan as a site for construction of R.C.M. Police detachment quarters; the date of purchase being September 15, 1961. No date has yet been set for construction of the detachment quarters and no funds are available in the estimates for 1964-65.


REQUESTS FOR RAILWAY LINE ABANDONMENT, COMPTON-FRONTENAC CONSTITUENCY
Mr. Laiulippe: 1.	During the past two years, how many requests has the board of transport commissioners received from railway companies operating in Compton-Frontenac (a) for the abandonment of certain lines (b) for the abandonment of certain stations, and how many such requests have been approved and in what areas?
2.	Following each decision, how many people were laid off because of the changes made in the railway schedule?

Answer: The Board of Transport Commissioners for Canada advises as follows:
1.	(a) None, (b) Three applications were received for authority to retire station buildings. Two of these were approved, one at Birchton, P.Q. and one at Gould, P.Q. Two applications were received for authority to remove station agents and appoint caretakers. These were approved, one at Bury, P.Q. and one at John-ville, P.Q.
2.	This information is not on record with the board.


SALE OF T. MCAVITY LTD., SAINT JOHN, N.B.
Mr. Fairweather: Was the sale of T. McAvity Limited of Saint John, New Brunswick, to Crane .Canada) Limited the subject of any investigation under the provisions of the Combines Investigation Act and, if so, what was the result of such an investigation?


Mr. Macdonald:: The director of investigation and research under the Combines Investigation Act scrutinizes all significant mergers to determine whether the situation warrants formal inquiry under the act. The general practice, however, is that no information is given out as to whether a particular inquiry is being pursued with respect to particular companies or individuals unless and until a report is published.


NATIONAL HOCKEY TEAM
Mr. Winkler: Has the physical fitness and amateur sports council been requested by the Canadian hockey association to assist in the establishment of a Canadian hockey team and, if so, (a) will this hockey team be for the purpose of international competition (b) will it be located in Ottawa?

Questions


Mr. Munro:: The Canadian amateur hockey association has requested assistance under the fitness and amateur sport program for the establishment of a national amateur hockey team in Canada.
(a)	Yes.
(b)	Ottawa has been suggested as a possible location but this is a matter under study by a committee of the Canadian amateur hockey association.


TON MILES FLOWN BY CANADIAN AIR CARRIERS
Mr. Laiulippe: 1.	What was the number of ton miles flown by Canadian air transport firms last year?
2.	What percentage does such number represent of the total ton miles flown by members of the international civil aviation organization?
3.	How does Canada rank in terms of ton miles flown per year?
4.	What is the increase in ton miles flown by Canadian carriers over the previous three years?

Answer: 1. 419,262,000.
2.	3.6 per cent.
3.	In 1962, Canada ranked fourth.
4.	From 1959 to 1960 an increase of 12.0 per cent; from 1960 to 1961 an increase of 16.5 per cent; from 1961 to 1962 an increase of 10.1 per cent; from 1962 to 1963 an increase of 6.9 per cent.


*SUBSIDIES TO POLARIS SHIPPING COMPANY
Mr. Marcoux: 1.	Are subsidies paid to Polaris Shipping Company by the departments of transport and fisheries toward the construction of the ship Cacouna by Geo. T. Davie & Sons Ltd. and, if so, what are the names and addresses of the directors of the Polaris Shipping Company?
2.	What are the amounts of the subsidies paid to the company by the departments of transport and fisheries toward the construction of the ship Sillery by Geo. T. Davie & Sons Ltd.?


Mr. Siewari:: I am informed by the departments of transport and fisheries as follows:
1.	Yes. Company representatives dealing with the Canadian maritime commission are: president Captain Vallier Bouchard, Rimou-ski, Quebec; secretary, Mr. Laurent-P. Bolduc, Ste. Foy, Quebec.
2.	The amount of subsidy paid to the shipyard on behalf of the owner is $400,000. There is a balance outstanding of $100,000.
No subsidies on these vessels have been paid by the Department of Fisheries.


WINTER WORKS EXPENDITURES, BRUCE COUNTY, ONT.
Mr. Loney: What were the expenditures approved under the municipal winter works incentive program during 1963-64 in the county of Bruce, project nos.; Ont. 798, Ont. 277, Ont. 1264, Ont. 1265, Ont. 901, Ont. 954, Ont. 955, Ont. 1037, Ont. 928, Ont. 1134?


Mr. MacEachen:: Municipal winter works
incentive	program 1963-64,	county of Bruce: Estimated federal government share
Project number		of payroll costs
Ont.	798 Chippawa	$18,000Ont.	277 Kincardine	20,000Ont.	1264 Port Elgin	1,500Ont.	1265 Port Elgin	1,750Ont.	901 Ripley	750Ont.	954 Teeswater	4,180Ont.	955 Teeswater	200Ont.	1037 Whitchurch	5,000Ont.	928 Wiarton	750Ont.	1134 Wiarton	3,500Total	$55,630


CIVIL SERVICE COMPETITION 63H-664
Mr. Muir (Cape Breton: North and Victoria):
1.	What were the results of the recent civil service commission competition No. 63 H-664, fish culture officer?
2.	What was the closing date of this competition?
3.	Who was the successful candidate?
4.	What were the names and addresses of all others who entered the competition?


Maurice Lamontagne: I am informed by the civil service commission as follows:
1.	As a result of competition 63H-664, fish culture officer 1, Department of Fisheries, various centres in the province of Nova Scotia, an eligible list, containing the names and addresses of the 27 successful candidates was established. This eligible list was published on page 1245 of the Canada Gazette of April 25, 1964.
2.	January 15, 1964.
3.	This competition was held to provide eligibles to fill vacancies that may arise in the fish culture stations throughout the province of Nova Scotia during the next 12 months. No appointment has as yet been made as none has been requested by the department.
4.	The names and addresses of the successful candidates appear in the list referred to in question No. 1. Having regard for the right to privacy of the candidates and the possibility that publication of information could prove

not only embarrassing but prejudicial to them, the commission holds in confidence the names and addresses of candidates who were not included on the eligible list.


POST OFFICE CARETAKER, CADILLAC, QUE.
Mr. Caouetle: 1.	Has the Post Office Department called for tenders for the position of caretaker for the Cadillac post office and, if so, what are the names of the tenderers and what was the amount of each tender?
2.	Has the position been awarded to one of the tenderers and, if so, what is the name of successful tenderer?
3.	If the position has not yet been awarded when will the department arrive at a decision?

Answer: 1. Tenders have been called by the Department of Public Works for the provision of cleaning service on a contract basis.
Tenders were received as follows: Mrs. Marcel Melanson, Cadillac, $720 p.a.; Mr. Rudolph Veilleux, Cadillac, $1,080 p.a.; Mr. Armand Lacoste, Cadillac, $3,300 p.a.
2.	No.
3.	The low tenderer has been requested to confirm her tender and if confirmation is received an award will be made shortly after. [Text]


VETERANS AFFAIRS EMPLOYEES, COMPTON-FRONTENAC CONSTITUENCY, QUE.
Mr. Lalulippe: 1.	What doctors, professional persons, or others are employed by the Department of Veterans Affairs in Compton-Frontenac?
2.	How long has each of these employees held his job, and what salary is paid to each?


Mr. Teillel:: 1. No doctors, professional persons, or others are employed by the Department of Veterans Affairs in Compton-Frontenac.
2. Not applicable.


ISSUE OF CREDIT BY COMMERCIAL BANKS
Mr. Cote (Chicoutimi): Did the Prime Minister state in Montreal on May 26 that decentralization requires financial means which must be found under the terms of the constitution and, if so, could this result in the federal government re-assuming the regalian rights of commercial banks to issue credit?


John (Jack) Davis: The Prime Minister made the following remarks during his address to the Canadian Manufacturers' Association in Montreal on May 26:
I know that the provinces in our confederation have new problems, new responsibilities and must have financial resources as well as the constitutional authority to deal with them. Canada is
Questions
a vast continental domain-too big, too spread out, too cut up to be governed exclusively, or even dominantly, from one centre. I believe that the provinces and their governments will play an increasingly important part in our national development, and 1 for one welcome that as a healthy decentralization-but not as a destructive separatism.
And this development must not be, and need not be, at the expense of the right, the duty and the power of the federal government to direct and control national factors in our development; including financial, economic and trade policy.
The Prime Minister had in mind the revised fiscal arrangements between the federal and provincial governments announced in the House of Commons on April 20, 1964. He was not referring to bank credit.


MOTEL AND HOTEL CONSTRUCTION, BANFF, ALTA.
Mr. Woolliams: 1.	How many motels, hotels or other such accommodation are being constructed at the present time in Banff?
2.	Who is building these motels, and who are the owners of the motels in question and what tenders, if any, were called for by the government?


Mr. Laing:: 1. Two, assuming the question refers to Banff national park rather than only to the townsite of Banff.
2. Voyager Inn: Under construction by Poole Construction for Banff Voyager Inn Limited; tenders were called for the site.
Deer Lodge: Under construction by Burns and Dutton for Crosby Company Limited; no tenders called for the site since the new construction is replacing part of an existing concession.


POST OFFICE, MESSINES, QUE.
Mr. Mariineau: 1.	With reference to the answer to question No. 219 concerning the construction of a post office at Messines, Quebec, does the Minister of Public Works now propose to build a post office there?
2.	If a post office is to be constructed at Messines (a) has a site been purchased and, if not, has a definite site been chosen (b) to whom did the site belong (c) what was the purchase price (d) is the site located in the centre of the village (e) are there other sites available in the centre of the village (f) have these other sites been considered (g) who recommended the purchase of such site by the government? [Translation]
Answer: 1. Yes, the construction of a post office is proposed for later this year.
2. (a) Expropriation of the site is under way.
(b)	Mr. O. Saint-Jacques.
(c)	The agreed price is $500.

Questions
(d)	The site is located approximately one quarter of a mile from the geographical centre of the village.
(e)	Yes. Other properties nearer to the geographical centre of the village were considered. However, in view of the cost involved in preparing those sites and other factors, it was decided that the location chosen was more suitable.
(f)	Yes.
(g)	Officials of the Department of Public Works investigated the acquisition of the site and their choice was approved by the representatives of the Post Office Department, the majority of the residents and the municipal council. A few citizens and one member of the council were opposed to the site chosen.


*FLAG FLOWN AT PRIME MINISTER'S RESIDENCE
[Stage Direction]
To provide assistance in solving major problems of soil and water conservation as they exist in each area.
Project No. 4004: The purpose of this project is to adjust the land use in the settlement of Lincour from combined farming and forestry to forestry exclusively and to relocate the residents in the area.
Project No. 4005: To promote assistance in the protection of land against erosion by water, the improvement of poorly drained areas by the installation of drainage systems both tile and open ditch systems. The construction of farm ponds for stock watering, fire protection and irrigation.
The areas involved in this project are the same as outlined in project No. 4002.
2. The estimated cost of each of the above mentioned projects is as follows:
Mr. Coates: 1.	Who produced the "three maple leaf flag" which was flown from the flagstaff at the Prime Minister's official residence at Harrington lake on Saturday, May 30, and Sunday, May 31?
2.	For how many hours was the said flag flown on said flagstaff on each of the said days?


John (Jack) Davis: Bruck Mills, Limited, Cowans-ville, Quebec.
2. Several.
Project No.
Total
shareable costs Federal share
4002
4005


$ 36,000.00 61,500.00 24,597.60 135,800.00 $18,000.00 30.500.00 12,298.80 67.900.00 TRANS-CANADA HIGHWAY CONSTRUCTION, NOVA SCOTIA ARDA PROJECTS, NEW BRUNSWICK
Mr. Flemming (Victoria-: Car leion):
1.	What are the details concerning the following ARDA projects in New Brunswick: 4001-Advisory services to farmers in farm woodlot management; 4002-Soil and water conservation, under the New Brunswick land improvement program to promote the development of agriculture in those areas where a good potential for development exists within delineated pilot areas during 1962-63 ; 4004-Alternate land use, acquisition of marginal land for forestry purposes at Lincour and the re-establishment of 15 families; 4005-Soil and water conservation, under the New Brunswick land improvement program, as outlined in project 4002, within delineated pilot areas during 1963-64?
2.	What is the estimated cost of each project?


Mr. Sauve:: 1. Project No. 4001: To provide an advisory service to farmers to assist them in the management planning, planting and thinning woodlots, the construction of access trails and other woodlot extension services.
Project No. 4002: To promote the development of agriculture where a good potential for development exists in the areas of Mada-waska, Victoria, Carleton, York, Queens, Kings, Westmorland, Albert and Kent counties.


Mr. Armstrong: What contracts have been approved by the federal government for trans-Canada highway construction between Antigonish and Sutherland's river, and in the case of each contract what sections of highway are to be built and what is the anticipated federal contribution?


Mr. Deschaielets:: Anticipated
Contracts	federal
approved	contribution
French river bridge	$ 166,500
Lamont road overpass,
(near Telford, Pictou county)	85,500
Grading and gravelling,
5.1 miles west end of Antigonish bypass to James river	488,700
Grading and gravelling,
3.4	miles from east French river at Broadway to French
river	395,100
Grading and gravelling,
3.5	miles from French river
towards Sutherland river	520,200


HIGHWAY OVERPASSES ANTIGONISH-WEST-VILLE, N.S.
Mr. Armstrong: Are any highway overpasses planned between Antigonish and Westville?


Jean-Paul Deschatelets: No, no correspondence has been received from the province of Nova Scotia relative to further proposed overpasses between Antigonish and Westville.


HIGHWAY OVERPASS, ROUTE 7 AND ANTIGONISH BYPASS, N.S.
Mr. Armstrong: Was an overpass proposed at the juncture of route 7 and the Antigonish bypass?


Jean-Paul Deschatelets: No, no correspondence has been received from the province of Nova Scotia relative to an overpass at the juncture of route 7 and the Antigonish bypass.


TRANS-CANADA HIGHWAY SAFETY STANDARDS
Mr. Armstrong: Has the federal government any jurisdiction over safety standards on the trans-Canada highway?


Jean-Paul Deschatelets: Yes. The trans-Canada highway agreements jointly signed by the provinces and the federal government, contain ruling dimensions for curvature, gradient, sight distances and bridges for the highway. With the exception of the portion of the trans-Canada highway through the national parks, regulations pertaining to safety standards, such as signs, speed limit, lighting requirements, vehicle dimensions, etc., are the responsibility of the province concerned and are generally contained in the relevant provincial highway traffic act. In the case of the sections of the highway through the national parks, safety regulations are the responsibility of the Department of Northern Affairs and National Resources.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Pascoe: 1.	How many contracts for printing have been let by the (a) printing bureau (b) Department of Industry, from April 22, 1963 to date?
2.	How many of said contracts were over $500?
3.	What are the names of all companies or individuals who did such printing, and the amount of each contract?
Return tabled.


MOTIONS FOR PAPERS
John B. Stewart: Mr. Speaker, mo-
Motions for Papers
tions Nos. 124 and 126 are acceptable to the government. Motion No. 121 is acceptable subject to the reservation that it be limited to correspondence which the department can identify in their files and which was not submitted in confidence.
Notwithstanding the offensive way in which motion No. 125 is formulated, it will be accepted. I ask that motion No. 123 be allowed to stand.


Mr. Diefenbaker:: What is offensive about it?


Mr. MacNaught:: The wording.


Mr. Speaker:: Subject to the reservation expressed by the hon. member, is motion No. 121 agreed to?


Some hon. Members:: Agreed.


Hon. Theogene Ricard (St. Hyacinlhe-Bagot):: Mr. Speaker, I rise on a question of privilege. Last Monday I asked the Minister of Labour when he expected to be giving me an answer to a question I had handed in in my name, and he answered that he was going to give it to me today. I find today that I have no answer, so I want to point out this is an urgent matter and I would like to have an answer as soon as possible.


Mr. Speaker:: One moment, please. I am a little in doubt about motion No. 123. Motion No. 123 is to stand?


John Whitney Pickersgill: On a point of order, Mr. Speaker, was it not understood that if the hon. member for Antigonish-Guysborough (Mr. Stewart) indicated that the motions were acceptable, then they were passed and they did not have to be called separately?


Mr. Speaker:: Yes, that is my understanding. [Translation]


Mr. L. J. Pigeon (Jolieife-L'Assomplion-Montcalm):: I rise on a question of privilege, Mr. Speaker.
Notice of motion for production of papers No. 125 reads as follows:
That an order of the house do issue for a copy of all telegrams received by the Prime Minister since the introduction of the proposed resolutions concerning the two flags and the two anthems appearing on the order paper as items 44 and 45.
The hon. member answers:	"That was
an offensive question". I do not think the question is such as to offend the Prime Minister and I am convinced it would be in the public interest to have those photostat copies produced in the house. Only the protests received by the Prime Minister constitute an offence, since the Canadian people are against the adoption of two flags.

Motions for Papers


Mr. Speaker:: Order, please. I am sure we have had enough discussion on both sides, and the case has been presented.


John George Diefenbaker: Well, Mr. Speaker, no; because the expression should not have been used by the hon. gentleman. Notices of motions are not regarded as offensive except by those who have those sensibilities that apparently are possessed by the hon. gentleman. That statement should not have been made.


Some hon. Members:: Withdraw.


Mr. Speaker:: Orders of the day.


John George Diefenbaker: No, Mr. Speaker. The use of the expression "offensive" by the hon. gentleman is not proper; and I ask if you rule otherwise-and the ruling has been made-that gratuitous statements like that should not be allowed.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I may say, Mr. Speaker, whatever your ruling, it is accepted as always by me, but that is not a proper expression.


Mr. Speaker:: Order, please. I do think the point is well taken. I am sure the hon. member will withdraw any implication that was in his answer.


John B. Stewart: Mr. Speaker, the objection I took to the notice of motion is that in itself, by the terms it uses, it is clumsy and consequently, as I suggested, offensive. It places upon a resolution on the order paper of this house an interpretation which is inaccurate. Now, my intent is to provide the hon. member with the material for which he is asking, without accepting the clumsy or offensive terminology employed by him.


Some hon. Members:: Withdraw.


Mr. Monteith:: You can't get away with that junk.


Mr. Grafftey:: Divine rule.


Mr. Speaker:: Order, please. This does seem to give me an opportunity of calling to the attention of hon. members some instructions which the house has given the Chair. Answers to questions should be as brief as possible, should deal with the matter raised, and should not provoke debate. Would the hon. member withdraw so that we can get on with the business before us?


John B. Stewart: Mr. Speaker, I am quite prepared to withdraw that part, but I should like to observe that-


Some hon. Members:: No.


John B. Stewart: I should like Your Honour to assure that when notices of motions appear on the order paper, they appear in good order.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, on the-


Mr. Speaker:: Order, please. There is no reason to go into a long debate on this subject. We have had a withdrawal.


Some hon. Members:: No.


Mr. Speaker:: In the opinion of the Chair there was an adequate withdrawal. The point was raised that perhaps the drafting of questions or motions should be more carefully looked into, and we will do that.


Gordon Harvey Aiken: Mr. Speaker, I rise because I feel there has been injustice done and I want to speak on the question of privilege. The other day-


Mr. Speaker:: The question of privilege, I understand, has been resolved. The withdrawal has been made and there is no purpose in continuing discussion along this line. The question is over; it is regulated; it is settled.


Gordon Harvey Aiken: I heard no withdrawal, Mr. Speaker. There was a withdrawal coupled with an "if".


Mr. Speaker:: Once more I tell the hon. member there is no purpose in continuing this discussion. A withdrawal has been made. The question is over and settled.


Gordon Harvey Aiken: Mr. Speaker, I wish to rise-


Some hon. Members:: Order.


Gordon Harvey Aiken: I have the right to speak in this house. I intend to say what I have to say, regardless of the other side of the house.


Some hon. Members:: Oh, oh.


Gordon Harvey Aiken: All right, all right; as soon as I have some semblance of order from the members across the way I want to make my point. Mr. Speaker, I am rising on a new question of privilege, and it arises out of a statement Your Honour made this afternoon at the opening of the house, followed by the discussion we have just had. The other day the right hon. Leader of the Opposition was required and requested to withdraw a statement that he was not required to withdraw and which did not come within the purview of this house. The statement today did come

within the purview of this house and was made in this house, and my point is that the hon. member should have risen in his place and withdrawn immediately when he was requested to do so, because there has been a change in the rules governing this house. The other day the Leader of the Opposition was requested to withdraw-


Mr. Speaker:: Order, please. The last statement is not correct. If the hon. member would read my statement today carefully he would see that his interpretation does not coincide with the position taken by the Chair.
I really do not see any purpose in continuing this discussion. It was my understanding that the hon. member did withdraw; perhaps not in the precise language which would suit the hon. member for Parry Sound-Muskoka, but it was a withdrawal. I think we are wasting far too much time on a minor point.


Gordon Harvey Aiken: I bow to your ruling Mr. Speaker.


Mr. Speaker:: Thank you.


CHINESE IMMIGRATION
[Stage Direction]
Motion No. 121-Mr. Howard:
That an order of the house do issue for a copy of all correspondence, telegrams and other documents exchanged between the government or any agency or branch thereof and any other person or organization in the province of British Columbia since April 8, 1963, dealing with the question of immigraton to Canada of people of Chinese origin except such correspondence from persons who are either prospective immigrants or sponsors thereof as that correspondence relates to such pospective immigrants.
Motion agreed to.

[Stage Direction]
Motion No. 124-Mr. Winkler:
That an humble address be presented to His Excellency praying that he will cause to be laid before this house true copies of the original grants of arms for Canada and the provinces of Ontario and Quebec.
Motion agreed to.

[Stage Direction]
Motion No. 125-Mr. Pigeon:
That an order of the house do issue for a copy of all telegrams received by the Prime Minister since the introduction of the proposed resolutions concerning the two flags and the two anthems appearing on the order paper as items 44 and 45.
Motion agreed to.
Inquiries of the Ministry

[Stage Direction]
Motion No. 126-Mr. Vincent:
That an order of the house do issue for a copy of the report submitted by Mr. H. W. Lea, hydraulic engineer, to the Minister of Transport to review plans for the Trois. Rivieres bridge to study certain apprehensions of federal engineers, and to report to the minister whether, in fact, the proposed bridge constitutes a danger with regard to ice formation, or for navigation, and, if so, to propose the best way to guard against such a possibility.
Motion agreed to.

[Stage Direction]
On the orders of the day:
John George Diefenbaker: I have in my hand a Canadian Press dispatch and with the leave of the house I should like to read it so I might base my question to the Prime Minister. It reads as follows:
Chancellor Ludwig Erhard of West Germany has indicated to Prime Minister Pearson that there would be alarm in his country about any withdrawal of Canadian forces from Germany.
Informants said this was one of the points made by the chancellor in his 47 minutes talk with Mr. Pearson Tuesday.
After dealing with various matters the report goes on to say that other subjects discussed included Canadian-German relations, and so on.
In view of the headline "Erhard Afraid of Canadians Pulling Out of Germany?" and the prominence given to this, would the Prime Minister make it clear-and I am sure he would be speaking for all Canadians-that the suggestion of such a course being followed would be detrimental to western unity and to the maintenance of the strength of NATO?


Right Hon. L. B. Pearson (Prime Minister):: The suggestion was not made by the chancellor, nor was it made by myself. Indeed, the chancellor never brought this matter up at all in the discussions we have been having.


John George Diefenbaker: There is no foundation, then, for the suggestion that such a thing was in the mind of the Canadian government?


Lester Bowles Pearson: None whatever; and the matter has not been discussed with the chancellor or his party.

Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, on May 25 I addressed a question to the Secretary of State for External Affairs and brought to his attention a newspaper report that women and children were being shot down in Angola by the Portuguese army with arms supplied by Canada to NATO and thence to Portugal. I asked him to investigate this matter and he said he would. Has the minister anything to report to the house?


Hon. Paul  Marlin@Secrelary of Stale for External Affairs: I have nothing to report as yet, Mr. Speaker.


[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs?
Does the Canadian government intend to provide within its external aid program to African countries, a contribution to the tremendous work undertaken by His Eminence Cardinal Leger in favour of lepers?


Hon. Paul  Marlin@Secrelary of Stale for External Affairs: Mr. Speaker, this matter is now under study.



REQUEST FOR STATEMENT ON PRESENT


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquillam):: wanted to ask the Secretary of State for External Affairs a question about an Associated Press dispatch from Nicosia which indicates that the government of Cyprus has asked for a meeting of the United Nations security council in order to denounce the Turkish government's threat of military intervention in Cyprus. The report states that the secretary general of NATO, Mr. Stikker, has arrived in Athens and described the situation as being serious but not critical.
In view of the great concern the Canadian people have for what is happening in Cyprus, has the minister any statement to make regarding the situation?


Hon. Paul  Marlin@Secrelary of Slate for External Affairs: With regard to the request for a meeting of the United Nations security

council, Mr. Speaker, there has been no decision as to whether or not one will be called as requested by President Makarios. The security council will be meeting in any event, some day next week in accordance with arrangements previously made to receive a report from the secretary general of the United Nations. The secretary general of NATO is in Athens as the hon. gentleman has reminded the house, and he is there pursuant to an arrangement made at the last meeting of the NATO ministerial council. The foreign minister of Cyprus is on his way now to New York, and from his public statement through Reuters it is clear the situation is less critical now than it was a few days ago.


Thomas Clement (Tommy) Douglas: May I ask the minister if the Canadian government has been in touch with the Turkish government to express concern at the grave consequences of an invasion of Cyprus by the Turkish forces?


Mr.   Marlin@Essex Easl: Our mission has been in touch not only with the Turkish government but also with a spokesman for the government of Greece.



EDUCATION


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: In view of the statement made yesterday by the Minister of Transport and recorded at page 4094 of Hansard, indicating that not all the provinces have so far agreed to the terms of the legislation to provide student loans, I want to ask the Prime Minister if he can give the house some assurance that this legislation will be brought down in time to help finance needy students in the academic year 1964-65.


Lester Bowles Pearson: That is our hope and it is our intention.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Pori Arthur):: I want to ask the Secretary of State a question with regard to the Pearson film. In view of the allegation of the producer that a straw ballot was taken to determine whether the Liberal party and the Prime Minister approved of

this film, I wonder whether the hon. gentleman could provide the house with a more thorough explanation of the relationship between the Prime Minister and any of his staff and C.B.C. officials with regard to this whole debatable question.


Mr. Speaker:: It does seem to me that this question goes away beyond the limits of the rules. The hon. member made a series of statements at the beginning and gave interpretations. Perhaps he would rephrase his question, if he is looking for information, and put it on the order paper.


Douglas Mason Fisher: I will be glad to rephrase the question. In view of the controversial circumstances which now exist with regard to this film I wonder whether the minister could provide us with a more thorough and plausible explanation of the incidents involved.


Maurice Lamontagne: The C.B.C. some days ago-I think it was a couple of weeks ago-issued a statement, and I certainly have nothing to add to that statement.


Mr. Gene Rheaume (Northwest Territories):: Now that the National Press club has seen the film can the Secretary of State tell us whether the Canadian people are to be allowed to view this extravaganza for which they paid $35,000 in taxes?


Maurice Lamontagne: This is a matter of programming-


Some hon. Members:: Oh, oh.


Maurice Lamontagne: -and as the minister formerly responsible for the C.B.C., the hon. member for Digby-Annapolis-Kings once said in this house, it would be a tragedy if there were interference with the programming of the C.B.C.


Thomas Clement (Tommy) Douglas: In view of the minister's statement that programming lies entirely within the jurisdiction of the C.B.C., can the minister assure the house that there was no interference to prevent this film being shown?


Lester Bowles Pearson: The C.B.C. said so.


Maurice Lamontagne: Not to my knowledge, Mr. Speaker.


John George Diefenbaker: Now that the Secretary of State is in such a friendly mood and is furnishing information so complete and frank, will he tell us what was the position of those five ministers who sat in and examined this 20220-263i
Inquiries of the Ministry particular film before it was declared unfit for human consumption?


Maurice Lamontagne: All I can say about this film is that I have not seen it. The C.B.C. has been completely free in arriving at the decision it has reached.


Douglas Mason Fisher: Perhaps I could put a question
to the Secretary of State for External Affairs and ask him whether he presented any opinions which got to C.B.C. executives indicating that this film should not be shown.


Hon. Paul  Marlin@Secretary of State for External Affairs: What I do in my private capacity is not, of course, the concern of the hon. gentleman, but I suggest that if he is interested in films he come with me tomorrow night and see the film entitled "1 Would Like to be that Guy".


Some hon. Members:: Hear, hear.


Mr. Eric A. Winkler (Grey-Bruce):: I should like to ask the Secretary of State for External Affairs why he is going to see it.


Mr. Martin (Essex East):: I am always frank with this house. It is because I would like to be that guy.


Some hon. Members:: Hear, hear.


Thomas Clement (Tommy) Douglas: The Secretary of State has
said that the decision not to show the film was made entirely by the C.B.C. I should like to ask the minister why it was shown to persons outside the corporation, and particularly why it was shown to advisers in the Prime Minister's office.


Mr. Speaker:: I do not think this question is in order. The hon. member has made a series of statements and allegations. He may have the facts; certainly 1 do not. But it seems to me there is a better way of asking questions than by making a statement that we have to assume is true, and then expecting an answer. If the hon. member would rephrase that question to make it legal-


Thomas Clement (Tommy) Douglas: I will gladly rephrase the question, making it a simple, direct question. Was this film shown to persons outside the C.B.C., and, in particular, was it shown to the Prime Minister's advisers? If so, why?


Maurice Lamontagne: I understand it was shown, as a result of a decision by the C.B.C.


Some hon. Members:: Oh.


Gilles Grégoire: Mr. Speaker, I have a supplementary question

Inquiries of the Ministry for the Secretary of State. Does he intend to ask the C.B.C. to launch an investigation so as to find out who is responsible for that unnecessary expense of $35,000 and again ask the corporation to make a decision in that respect?


Maurice Lamontagne: Mr. Speaker, I will be pleased to communicate the views of the hon. member to the C.B.C.

Mr. R. Gordon L. Fair weather (Royal): I
have a supplementary question. I wonder why the Secretary of State cannot answer my starred question No. 1,207 about the C.B.C., considering that he knows so much about the matter today.


Maurice Lamontagne: I will look into this matter, Mr. Speaker, and make sure that an answer will be provided next week.



COMPARABLE EXPENDITURES ON ENGLISH AND FRENCH TALENT

[Stage Direction]
On the orders of the day:
Maurice Lamontagne: Mr. Speaker, in answer to the question directed to me yesterday by the hon. member for Port Arthur (Mr. Fisher), here is the gist of the statement made by the C.B.C. in that connection.
During 1963 the C.B.C. paid fees amounting to $14,770,920 to artists of all categories.
According to press reports the president of ACTRA, an organization representing English speaking artists and writers blamed the C.B.C. for allocating to its French language radio and television services two thirds of the expenditures occasioned by fees.
Here are the facts as shown by C.B.C. records:
Of the total amount paid to all artists by the C.B.C. last year, about 60 per cent went to the English service and almost 40 per cent to the French service.
Fees paid to artists, excluding musicians, were as follows: 56 per cent for the English service and 44 per cent for the French service.
The proportion of fees paid to all artists, except authors and musicians, were as follows: English service, 55 per cent, and French service, 45 per cent.
With regard to authors only, excluding musicians and other artists, the proportions were 57 per cent for the English service and 43 per cent for the French service.
According to the newspapers the ACTRA president said that the fees paid to musicians

were divided as follows: two thirds for the French language service and one third for the English language service. But it is precisely the opposite.
I should mention that C.B.C. records indicate only the amounts paid to individuals and do not distinguish between members and non-members of unions.


Gilles Grégoire: Mr. Speaker, a supplementary question. Could the Secretary of State give us the same report regarding the fees paid by the C.B.C. to Canadian artists, as well as those paid to foreign artists.


Maurice Lamontagne: Mr. Speaker, I shall try to obtain the information requested from the C.B.C. and then report to the hon. member.



DOMINION-PROVINCIAL RELATIONS PROVINCIAL PARTICIPATION IN FISCAL AND MONETARY POLICIES

[Stage Direction]
On the orders of the day:
Mr. Real Caoueiie (Villeneuve):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister.
Has the federal government received from the Quebec government a request to allow the provinces to participate in the shaping of fiscal and monetary policies of the country?


Lester Bowles Pearson: Mr. Speaker, it is quite impossible to deal with a question of that importance on the orders of the day.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. H. E. Gray (Essex West):: Mr. Speaker, I have a question for the Postmaster General. Now that the amendments to the National Housing Act have been passed by the house, will the minister cause further consideration to be given to extending federal government assistance to a proposed municipal project-


Some hon. Members:: Order paper.


Herbert Eser (Herb) Gray: -to acquire land for the redevelopment of an area in downtown Windsor for commercial purposes, and to similar projects throughout Canada?


Mr. Speaker:: I was not able to hear the second part or the lengthy ending of that question, but would the hon. member put it on the order paper.


Herbert Eser (Herb) Gray: The second part of my question was this, Mr. Speaker. I asked whether the minister-


Some hon. Members:: Sit down.


Mr. Speaker:: Order, please. Is the hon. member asking another question?


Mr. Fairwealher:: No; it is another plant.


Herbert Eser (Herb) Gray: I am sorry, Mr. Speaker, but I did not hear you too well down here. I thought you asked me to repeat the last part of my question.


Mr. Speaker:: Is the hon. member for Essex West rising to ask a second question?


Herbert Eser (Herb) Gray: No, Mr. Speaker, I am not.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Gerald A. Regan (Halifax):: Mr. Speaker,
I would like to address a question to the Associate Minister of National Defence. Is the minister aware that a civilian cook named Lome Edward Pace, with 12 years of good service in the R.C.N. and two years as a civilian cook with the R.C.A.F. in Halifax, has been discharged for taking home a 50 cent cake? Would the minister investigate the matter-


Mr. Speaker:: Order. This question, although quite important, should be put on the order paper.


Gerald Augustine Regan: I would like to discuss it at ten o'clock tomorrow night, Mr. Speaker.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Hon. J. R. Nicholson (Postmaster General):: Mr. Speaker, I do not know whether this calls for a correction in Hansard, but in fairness to the hon. member for Winnipeg North Centre and the house, I think I should supplement a statement that I made yesterday. I was answering a question that the hon. member for Winnipeg North Centre had asked about the alleged use of the mails by a business organization in Winnipeg which
Inquiries of the Ministry allegedly resulted in severe financial losses to a victim. After I had given the answer-


Mr. Churchill:: What page?


John Robert (Jack) Nicholson: This is to be found at page 4090 of Hansard. After I had answered the question a supplementary question was asked by the hon. member, as follows:
Was it not established that the victim In this case received his first invitation to approach this firm through the mails?
I replied:
That is not my information, Mr. Speaker.
On reading that answer I have decided that what I should have said-and I want to remove any doubt about this, in fairness to the hon. member-was that I do not know whether he received it through the mails or not; the post office does not censor these letters. He may have received it through the mails or he may not. I cannot say.


Mr. Stanley Knowles (Winnipeg North Centre):: A supplementary question, Mr. Speaker. Can the Postmaster General say whether the authorities in Winnipeg are checking the assertion which was made by the man in question?


John Robert (Jack) Nicholson: As I stated yesterday, Mr. Speaker, this matter has been referred, I understand, to the attorney general of the province of Manitoba, and that aspect of the matter is being looked into.



FORESTRY


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: Mr. Speaker, I wish to direct a question to the Minister of Forestry. Is he in a position to advise whether an agreement has been reached as yet between the federal government and the government of Nova Scotia for a continuation of the forest stand improvement program which will provide employment in Cape Breton?


Maurice Sauvé: Mr. Speaker, I wish to thank the hon. member for giving me notice of this question. The matter is now under consideration, and I hope to be able to give an answer some time next week.
4154	HOUSE OF
Inquiries of the Ministry CANADIAN FLAG



INQUIRIES RESPECTING CONSIDERATION OF NEW DESIGN

[Stage Direction]
On the orders of the day:
Mr. Reid  Scoll@Danforlh: Mr. Speaker, I have a question for the Prime Minister concerning the flag. I know the Prime Minister has told the country that the issue of a distinctive national flag is a matter of confidence, but in view of the importance of the matter I wanted to ask the Prime Minister this question. Can he say whether a vote of parliament changing the design of the distinctive national flag for example to a single maple leaf instead of three, would be considered by the government as a motion of non confidence?


Lester Bowles Pearson: Mr. Speaker, I would like to take notice of that question and answer it subsequently.


John George Diefenbaker: A supplementary question, Mr. Speaker. While the Prime Minister is on this subject would he tell us what are the plans of the government regarding the debating of these two resolutions?


Lester Bowles Pearson: Mr. Speaker, the farm credit bill is before the house, as my right hon. friend knows, and it must be completed before we go on to the flag resolution. It has also been made clear to the house that there are two other matters which must be decided, and the time taken on them will influence to some extent when we will get on to the flag resolution. I am referring to interim supply, which must be discussed before many days have passed, and the other matter is the resolution regarding the constitutional amendment for survivors' benefits. The formula has been agreed to by all the provinces, but with regard to the province of Quebec the agreement is subject to approval by the legislature. It is now on the order paper of the legislature, and as soon as it is dealt with there a resolution will be brought in here. Those are the three matters.


John George Diefenbaker: Will that precede the debate on the flag issue?


Lester Bowles Pearson: It depends. If that were passed through the legislature of Quebec this afternoon, it would be important to get that question disposed of at once so it could go to Westminster for the necessary action. We have been informed that it should go to


Westminster as quickly as possible because of the parliamentary situation there. Those are the three matters before the house. I would like to proceed with the flag resolution immediately, subject to those considerations with regard to the other two matters.


John George Diefenbaker: Mr. Speaker, in order to have a degree of definiteness-and I thank the Prime Minister for his explanation-would it not, under all the circumstances and having regard to those matters which require to be discussed, interim supply and the like, be desirable that he fix the date for next week, so that members will be in the position to know when it is coming up and can arrange to be sure they are here; because we have to make plans?


Lester Bowles Pearson: Mr. Speaker, the right hon. gentleman is perfectly reasonable in that request, but I am sure he understands our difficulty.


Mr. Howard:: It sounds like collaboration to me.


Lester Bowles Pearson: We are not in a position to say when we can proceed with the constitutional resolution until it is dealt with in the Quebec legislature. If we were to proceed with the flag resolution at once, and then Quebec passed the constitutional resolution, we could interrupt the flag resolution and we could go right ahead with the constitutional amendment. The only possible interruption then would be interim supply. If we left interim supply until the very last moment we might very understandably be criticized for trying to get interim supply through by shotgun methods. So it is not an easy situation. But I hope before the end of the day we may be in a better position to indicate what will be done. If we could agree that the flag resolution would start on a certain date, say next Monday instead of tomorrow, because of the uncertainty of the situation, that would be perfectly agreeable to this side.


Frank Howard: A supplementary question, Mr. Speaker. In view of the urgent desire to deal with the question of the constitutional amendment and interim supply as well as the flag, would the Prime Minister consider introducing a motion for the house to sit on Saturdays, during which time we could discuss the flag and then spend the rest of the time on these other important matters?



REQUEST THAT NEW DESIGN BE FLOWN ON PARLIAMENT HILL

[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I should like to revert for a moment to the flag issue to ask the Prime Minister the following question. Last Thursday, in answer to a question I put to him, he said he would be glad to arrange to have the flag proposed in the resolution which is to be introduced fly unofficially from the flag poles in front of the parliament buildings. Could he inform the house when this will be done?


Lester Bowles Pearson: Mr. Speaker, I would think perhaps tomorrow or Friday, say from five to eight o'clock, would be a suitable time. The flag pole is occupied today.


Francis Andrew Brewin: A supplementary question. In answer to another question at the same time last Thursday the Prime Minister said that he would be glad to look into the suggestion of flying a single maple leaf design; and in view of the fact that I believe he has received a flag with that design, as I have, can he now say whether this suggestion will be acted upon so the house can see both designs before hon. members make up their minds?


Lester Bowles Pearson: Mr. Speaker, I think it would be a little confusing-and I have been thinking about the matter-if two flags were flown, one representing the design that the government is submitting to parliament for its decision and one representing the design favoured by my hon. friend as a private member.


Mr. Mandziuk:: A supplementary question.


Gordon Minto Churchill: A supplementary question.


Mr. Speaker:: Order. I must remind hon. members that many of these questions on the flag issue have been admitted because of the general emotional interest; but to carry this question on too far is clearly breaking a rule which the house itself has given me, namely that it is improper to anticipate an order on the order paper.


Gordon Minto Churchill: Mr. Speaker, my question does not anticipate an order of the house. I think in fairness to the people who have submitted designs of flags the Prime Minister should, in deference to their wishes, also fly them outside the parliament buildings, particularly the ones chosen by the committee in 1946 as well as the other superior designs, compared with his flag, which he is now concealing.
Inquiries of the Ministry HOUSE OF COMMONS



POSSIBILITY OF CHANGE IN HOUSE LEADERSHIP

[Stage Direction]
On the orders of the day:
Mr. G. L. Chatterton (Esquimali-Saanich):: Mr. Speaker, I have a question for the Prime Minister. Has the Prime Minister yet received a request from the Minister of Justice to be relieved of his duties as government house leader?


Lester Bowles Pearson: No, Mr. Speaker. The hon. gentleman and I -and it is quite improper for me to be discussing this matter in the house-have been in consultation with regard to this matter. I know how heavy are his duties but I also know how well he is performing all of them, and I hope he will continue.


George Louis Chatterton: A supplementary question, Mr. Speaker, of the Minister of Justice. In view of the statement made by the minister on television on Monday night that he needed more time for his duties as a member of the house, as Liberal leader in Quebec and as Minister of Justice, when will he formally put the question to the Prime Minister about being relieved of his duties?



CONSUMER CREDIT


[Stage Direction]
On the orders of the day:
Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, yesterday the hon. member for Wellington South asked me about the authorization for payments to certain assistants to the joint House of Commons and Senate committee on consumer credit, and I promised to try to have an answer for him today.
The authorization for these payments to the committee assistants was made not by the Minister of Finance but under an order of the House of Commons and the Senate which was passed in this house on April 30. The decision to engage the two assistants in question was made on May 26 by the joint committee steering group. Payments will be made out of the normal vote in the legislation estimates. It appears likely that supplementary estimates may be required for this purpose.

Inquiries of the Ministry INDIAN AFFAIRS



STATEMENT ON READINESS OF PROVINCES TO ATTEND CONFERENCE

[Stage Direction]
On the orders of the day:
Hon. Rene Tremblay (Minister of Citizenship and Immigration):: Mr. Speaker, on
Thursday June 4 the hon. member for Churchill raised the question of the federal-provincial conference on Indian affairs and asked me to inform the house which provinces were prepared to meet now and which provinces had indicated they would need more time.
To clarify matters, I should inform the hon. member and the house that the federal-provincial conference in question was not postponed as the result of a formal request from any of the provinces. It will be recalled that this conference is intended to deal with measures required to implement or further the aims and objectives generally agreed upon at the federal-provincial conference held in Ottawa last November. Since that time the federal government has been developing certain suggestions which would offer a promising possibility for consensus on the federal-provincial action that might be required.
These proposals are of such importance and complexity that, after full consideration, I came to the conclusion that a conference date in May would not provide sufficient time for their completion and presentation to the provinces in detail and still give the provinces time for adequate study. Accordingly it was suggested to the provinces that the conference be held later in the year so they might have more time to study the actual proposals that will be submitted to the conference.


Eugène (Gene) Rhéaume: A supplementary question, Mr. Speaker. Can the minister advise the house whether invitations to participate in this conference were extended to the governments of the Yukon and Northwest Territories?


René Tremblay: I am not aware of that, but I will take this question as notice.


Mr. Robert Simpson (Churchill):: A supplementary question. Can the minister advise the house in relation to the answer he gave us whether some of the provinces did not indicate that they were preparing to go ahead with programs needing ratification by this conference? If the conference were held in October these programs would be delayed


some six months. Some very important projects in relation to Indian affairs would be delayed six months.


René Tremblay: Mr. Speaker, I am not aware that such a delay could have these consequences.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. Speaker:: I must advise hon. members that there is time for one more question before orders of the day.


Mr. Guy Marcoux (Quebec-Montmorency):: Mr. Speaker, I rise on a question of privilege. I should not like to extend the question period-


Gordon Minto Churchill: I rise on a point of order, Mr. Speaker. Will you permit other supplementary questions, then, or has the time elapsed?


Mr. Speaker:: According to the rules given to me there is a 30 minute period for questions on Wednesdays, but this was a sort of special day. There was a long statement by the Chair and other questions, but if this is a question of privilege I think we should hear it, provided it is a serious one.


Guy Marcoux: Mr. Speaker, it will not be long. I should not want to extend the question period even one second.
I only want to point out that no member of our party has been recognized this afternoon to put a question.


Gordon Harvey Aiken: I rise on a point of order, Mr. Speaker. Today there has been only a half hour period for questions. While there is no great objection raised, since my hon. friend from Winnipeg South Centre is anxious to proceed with the business of the house, I think it should be noted that today, when we had only a half hour available, the Postmaster General, the Minister of Finance, the Secretary of State and the Minister of Citizenship and Immigration all made fairly extended statements. I am merely raising a point. If

this trial period is going to work, statements of this sort will not assist in carrying out the business of the house.



FARM CREDIT ACT


Hon. Harry W. Hays (Minister of Agriculture) moved: that the house go into committee to consider Bill No. C-100, to amend the Farm Credit Act.
Motion agreed to and the house went into committee, Mr. Lamoureux in the chair.
On clause 1-Farming.


J. Nicholas (Nick) Mandziuk: Mr. Chairman, in my introduction to a discussion of the first clause I might say that during the general discussion at the second reading stage many useful suggestions were made to the minister. I hope he will take note of them. I feel that we are not going to take too much time in discussing this bill clause by clause because some of the amendments are worthy of support. There are some amendments to which I, at least, intend to take exception and as we come to them these will be pointed out to the minister. I hope he will do more than he did at the conclusion of the discussion on second reading. After all the various speeches that had been made in the house, the minister did not see fit to make any closing remarks. Whether or not this was done in order to save time or whether he had nothing to say is anybody's guess.
Tn m for oo first clause is concerned, Mr. Chairman, on the face of it-


Harry William Hays: May I just interrupt to correct one statement the hon. member has made. He has said I did not see fit to say anything at the conclusion of the discussion on second reading. This occurred at ten o'clock, and there was nothing I could say. I will be glad to answer any suggestions as we go through the bill clause by clause.


J. Nicholas (Nick) Mandziuk: I thank the minister for that statement, because I expect him to answer a few questions which I shall pose.
This first clause falls into two parts, as is apparent on the face of it. There is reference to the fact that paragraph (f) of section 2 is repealed leaving the impression that this paragraph was perhaps completely changed. As a matter of fact, if you look back at the statute of 1959, when the original bill was passed by the previous admin-20220-264
Farm Credit Act
istration, you will find no changes have been made except for transposing certain words and the addition of beekeeping to the qualifications of "farming".
The second part of this clause extends the list of those to whom loans can be made. In addition to those whose principal occupation is livestock raising, beekeeping, dairying, fruit growing and all tillage of the soil, the bill purports to extend the right to borrow to the executors or administrators of the estate of a deceased farmer. Let me take these two divisions in order. I take no issue with the proposal to include beekeepers under the act. However, I believe the minister should give some assurance to the committee as to how the corporation proposes to get security from a beekeeper, if beekeeping is the principal occupation.


Mr. Byrne:: Are you afraid the corporation may get stung?


J. Nicholas (Nick) Mandziuk: You will get stung before the day is over. Beekeeping is an occupation that can be conducted on a very small plot of ground. The hives are generally farmed out all over the township wherever there is nectar available for the bees. The bees themselves are perishable insect and some of them are destroyed in the fall, so that a new supply has to be obtained in the spring. The hives themselves are of very little value. What security would the corporation take in a case where beekeeping was the principal occupation? I think the committee should be given some indication of what the intention is with regard to this type of farming. I do not think tms clause has reference to the farmer tilling the soil or raising livestock, who keeps bees for the purpose of gaining additional income. He would not be borrowing on that particular asset.
I am not seriously objecting to the second part of clause 1 but I am puzzled as to how the minister's advisers came to include personal representatives for the purpose of qualifying for a loan from the corporation. How do they reconcile that with the definition of a farmer in paragraph (e) of section 2 of the act, which has not been repealed? That paragraph defines a farmer as a person whose chief occupation is farming. Under the bill, provision is being made to extend the right to obtain a loan to the personal representative of a deceased farmer.
I realize that the operation of the farm of the deceased farmer has to be carried on for a number of years. So far as personal representatives are concerned, I divide them into

Farm Credit Act
two categories according, to whether there is or is not a will. If there is a will an executor is appointed but the executor may be someone who does not know beans about farming. He may be a member of the family who is in a business far removed from farming. Furthermore the executor may be a trust company which would carry on the farming operations by remote control. But the executor is authorized to borrow from the corporation.
The same situation exists if there is no will. Some member of the family may be appointed as administrator of the will. That member of the family may not be a farmer and may not know anything about farming. An official administrator such as a trust company could be appointed. The trust company would have no personal interest in the farm and would be operating it by remote control.
As I interpret paragraph (e) of section 2 I believe that the original intention of the act was that a borrower had to qualify as a person having a personal interest in some particular aspect of farming, whether it be raising cattle, tillage of the soil, or beekeeping as now included. My interpretation is that there had to be personal interest, personal attention and the farmer had to live on the farm. I know from experience that in the few years the act has been in operation the corporation has refused to take mortgages on anything other than the land actually occupied by the borrower, namely, his homestead, because they wanted to be absolutely certain of the repayment of the loan.
Let us look at the matter from this angle, Mr. Chairman. In addition to what I have just said about the inclusion of personal representatives, and the possibility that such representatives would have no personal interest in operating the farm of the deceased farmer, there is another conflict that may arise. I refer to the fact that it is the duty of the personal representative, whether he is administrator or executor, to wind up the estate as speedily as possible and distribute the assets to the heirs unless there are special trusts provided for in the will. What would be the situation if the administrator or executor should encumber the land before the loan from the Farm Credit Corporation had been paid off and the land, encumbered without the approval of the heirs, was then turned over to them without any ability to repay on their part?
I have brought this matter up under this clause, not because I oppose this extension. I have to argue hypothetically and present

hypothetical situations because I do not know how this provision will work out in practice. Probably the minister has some explanation. His officials must have delved into the matter more deeply than I have. However I know from experience that the corporation will be confronted with difficulties, if it lends to people who have no personal interest in the property which the corporation is taking as security for the loan. In answering my questions I hope the minister will indicate whether he has had requests to make this extension and, if so, from whom have they come? That would be of interest to the committee.


Harry William Hays: Mr. Chairman, I cannot tell the hon. member the exact number of requests, but we have had many requests for this sort of thing. I think that the intent of this provision is that the executor of the estate would operate the farm for the recipient of the estate. I might go one step further in explaining this matter by giving an example. What we were trying to do was to make it possible for a father to provide that his son could continue operating the farm and have an additional farm. Suppose the father has two sons who wish to take up farming, and his own farm unit is not large enough to support the two sons. He may wish to transfer the farm to one of his sons, while at the same time assisting the other son to buy a farm of his own.


J. Nicholas (Nick) Mandziuk: On a point of order, I think this matter is covered in another section.


Harry William Hays: I thought I would cover it now.


J. Nicholas (Nick) Mandziuk: The minister is going into another section.


The Chairman:: Order. We are on clause 1 of the bill, of course, and we can have a general discussion, but I agree with the hon. member that we should not go into the details of any other section.


J. Nicholas (Nick) Mandziuk: Let us have answers to my questions.


Harry William Hays: Mr. Chairman, I think the intent of this particular provision is to enable the deceased farmer to confer on the executor of the estate the same privileges as the farmer would have if he were still living. The executor is acting on behalf of the heirs of the estate. The Farm Credit Corporation would be lending the money to the heirs of the estate who would be operating the farm.

Possibly the heirs would not be of age but they would want to continue the operation of the farm.


J. Nicholas (Nick) Mandziuk: I do not think the minister has quite got my point. Can he envisage an executor administering a farm for 30 years, which is the period of time for repayment of a loan from the Farm Credit Corporation? Any child who may be born at the time of the death of the farmer reaches his majority at age 21. I would like to know how the minister reconciles this extension with paragraph (e) in the act, which I interpret as stating quite definitely that the borrower must have a personal interest. An executor or administrator has no personal interest because he is just a trustee, and there is even less of a personal interest if it is a trust or loan company administering the estate. If the minister had suggested a repeal or amendment to paragraph (e) I could understand it would be workable. Otherwise I do not think the provision gives the corporation authority to lend to administrators or executors.


Harry William Hays: The loans would be for the benefit of the heirs who may not be able to borrow for themselves, and the executor can state he is acting for the heirs until such time as he, the executor, steps out of the picture.


J. Nicholas (Nick) Mandziuk: I do not think that is a quite satisfactory answer, Mr. Chairman, but I do not believe I can get any further with my question. I think the minister is labouring under a misconception that the executor may be one of the members of the family, and he would have an interest in preserving the estate for a brother or sister. The minister has not answered my question concerning the estate being administered by an outside administrator or trust company as executor. I have a large number of wills in my office and the testators have indicated they want me to act as executor of their estates. However, I am not a farmer. I have no personal interest. What right should I have to borrow money and encumber a deceased farmer's estate? I would be renting the land out and having somebody else operate it, and this is in contravention of paragraph (e).


Harry William Hays: 
J. Nicholas (Nick) Mandziuk: Mr. Chairman, the minister has my blessings. I only hope it works because I realize there is no law that can be put on the books that is perfect. Time alone will show whether it will work, but I have my doubts. I know what section 2 of the act refers to. It refers to co-operatives and corporations, but I do not know how I, as the sole executor of a farmer's estate, could be considered to be a corporation. If that is the best explanation we can get, we shall have to take it.


Mr. Pascoe:: I should also like to deal with this amendment making it possible for the corporation to lend money to the executor or administrator of a deceased farmer's estate. As recorded at page 3865 of Hansard for June 2 the minister said:
One amendment will make it possible for the corporation to lend to the executor or administrator of an estate of a deceased farmer, and thus the corporation will be able to assist the farmer's heirs to continue to operate and develop their farms, even though the estate may not yet be fully settled.
In many cases an estate is not fully settled because of a dispute over the value of the land. I am wondering, when a loan is made by the Farm Credit Corporation, will the corporation's appraisal of the value of the land be accepted for payment of estate tax?
Second, in making these loans has any consideration been given to the incorporation of a life insurance clause whereby, in the case of death, the loans would be paid off?


Harry William Hays: When my officials suggested that this be put in the bill to broaden paragraph (e) of the act, they stated there were many requests for this. For instance, there are cases where a mother would have an interest in a farm as long as she lived, and loans could be made under these circumstances. We know this will work, and requests have been made for this.


James Ernest Pascoe: Would a Farm Credit Corporation appraisal of the value of the land be accepted for estate taxes, and what about the question of a life insurance clause in the case of death?

Farm Credit Act


Harry William Hays: Would the hon. member rephrase the second part of his question?


James Ernest Pascoe: For example, when a credit union makes a loan there is a life insurance clause so that in the case of death the loan is paid off. Has any consideration been given to providing such a clause in the case of farm credit loans?


Harry William Hays: Insurance in part III loans is compulsory, and it is optional under part II.
I	am not just sure I understand exactly what the hon. member is getting at.


J. Nicholas (Nick) Mandziuk: I think I could assist the minister. What my hon. friend has in mind is insurance on credit union loans, and to keep the record straight it is the credit unions themselves that insure the borrower. I do not think there is any obligation to do that with the Farm Credit Corporation.


James Ernest Pascoe: There is no obligation but I wonder has it been considered?


Mr. Rynard:: Is it not true that they are insuring them at the present time?


Harry William Hays: About 60 per cent of them are insured.


Philip Bernard Rynard: What are the qualifications for insuring them?


Harry William Hays: Part III is compulsory and part
II	is voluntary.


Philip Bernard Rynard: In other words, the size of the loan determines the compulsion.


Harry William Hays: It is the part of the act concerned, not necessarily the size of the loan.


Philip Bernard Rynard: Could we have the qualifications? This is the point we are trying to clear up.


Harry William Hays: Part III is compulsory and part II is voluntary, after medical examination if required.


Philip Bernard Rynard: What does part III refer to?


Harry William Hays: These are the loans that are supervised.


Philip Bernard Rynard: These supervised loans which may be insured. How is that insurance placed? Is it placed after medical examination? How long does it last? What happens if a man who gets a loan dies?


Harry William Hays: It lasts for the life of the loan and it is group insurance taken out by the corporation.


Philip Bernard Rynard: Supposing a man dies just before his loan comes through. What happens

then? Suppose his application for a supervised loan has been passed.


Harry William Hays: I understand the insurance does not come into force until the loan has been made.


Philip Bernard Rynard: But on the basis that he was promised a loan, a loan which is coming through, he could have purchased a lot of material and equipment. What would become of the widow? Let us suppose the day before the cheque arrived the man dropped dead. He had gone ahead and purchased material and equipment he wanted.


Harry William Hays: It is all hypothetical, but we would go ahead and make a loan to the widow if she wanted it.


Philip Bernard Rynard: I do not want to dispute that. I know the minister is telling me what he feels is right, but I should like him to check that answer.


Harry William Hays: I will be pleased to do that.


Mr. Pugh:: The hon. gentleman says a loan would be made to the widow. But would she be in a position to take on such a loan?


Harry William Hays: If she wished, because I think it would have been a co-operative venture.


David Vaughan Pugh: The widow might not be able to farm or to carry on. What would be the point of making it to her?


Mr. Peters:: In rising to speak on clause 1 of the bill I might, perhaps, draw attention to the presence in the gallery of Mr. Ken Kelly, who is at the present time the sole representative of the fourth estate responsible for disseminating throughout Canada information garnered from this debate. I know this will be of interest, since members of the gallery continually draw attention to the attendance here of members of parliament. I know he is going to be hard pressed to carry this information across the country-


An hon. Member:: He can do it.


William Arnold Peters: Certainly, he can do it. But agriculture is not normally his field and maybe, therefore, sympathy will be shown to some of us who are, similarly, outside our usual fields.
I should like to ask, first of all, whether the minister has given any consideration to extending the definition of farming, which has already been extended so as to include beekeeping, so as to cover the growing of trees for pulp, Christmas tree production and the raising of seedlings. A farmer often needs

to purchase adjacent land in order to carry out activities of this kind, and in most cases a good deal of credit is necessary in relation to the amount he can reasonably expect to receive from his operation. Such credit is not easy to find. In my own part of the country tree cultivation has played an increasingly important part in the development of the area. Indeed, Senator Roebuck, of the other place, in editorials he wrote many years ago in a local newspaper in Timiska-ming, said that pulp and timber, to us, took the place of wheat in western Canada, inasmuch as it was the basis of the development of our land. Perhaps the minister will give consideration to extending the definition of farming along these lines.
I wonder, too, why some consideration has not been given to establishing a revolving fund, so that instead of returning to general revenue moneys paid back to the Farm Credit Corporation could continue to be used by the corporation as the basis of new loans. If this were done, parliament might not be constantly needing to consider bills making additional money available to the corporation. Because of the rate of interest charged, the sum of money would, obviously increase, and this would assist to some extent.
In the third place, I should like to ask the minister why a distinction has been made between the two classifications, part II and part III. We believe that in their efforts to establish economic units, farmers should have to pay the lowest possible rates of interest. Here, in the case of the larger amounts, it is provided that an additional sum should be paid to cover costs of administration. I urge the minister to continue the policy of charging 5 per cent across the board with respect to farm loans. If he is arguing that those who borrow the larger amounts, $20,000 and more under parts II and III, are not, in the strict sense, running family farms or seeking to establish economic farm units, I think he should tell us so. But if it is felt these loans are for the purpose of establishing more economic units in the light of the new technocracy we should, I think, maintain the rate of 5 per cent.
I know the minister has not yet had an opportunity to say something about the effect the possibility of these new loans in the top range is likely to have. Would they not have the effect of allowing some prosperous farmers to extend their operations at the expense of neighbours who might not yet have extended their operation sufficiently to be-
Farm Credit Act
come economic units? It seems to me the existence of the possibility of such large loans is bound to lead to an increase in the market values of land. It is bound to increase the ability of one farmer in an area to purchase neighbouring farmland. If this is a factor, then I believe the department will have to give some consideration to the sociological problem that is going to develop in terms of rural economy and the family farm unit.


Harry William Hays: Mr. Chairman, in reply to the first question in connection with the woodlot, in the farm credit regulations on page 16, section 9(a), I think this point is covered. It says:
The appraised value of the land shall be based on the value of the land for agricultural purposes, including the commercial value of any part thereof used by the applicant for the production of forest products and, so far as possible, on the productive value thereof based on the average yield and prices of farm products and operating costs.
So in the regulations it is possible to go ahead and borrow on a woodlot in order to plant more seedlings, and that sort of thing. With regard to the other question in connection with the cost to the corporation in so far as loans are concerned, the loans now are costing .87 of 1 per cent; this is the cost of the corporation's administration. We do not anticipate that there will be any additional cost with regard to enlarging loans to between $20,000 and $40,000; we anticipate that the same costs will prevail.
In connection with the third question, I think a great deal of our reason for extending these loans is this. Last year we lent $108 million, and the total amount, more or less, of the corporation's loans now are up around $375 million. Outside of this we know that farmers borrowed $235 million just last year at interest rates in excess of 10 per cent. So we know that the need is there. If you stop and think about a farm today, if a man has 20 cows and he has $10,000 worth of buildings and 100 acres of land, without any machinery, he is up to $26,000. If you hope to earn 10 per cent on a $40,000 investment you are only speaking of $4,000 as being the farmer's net return. If you get to $60,000, you are speaking of $6,000 at 10 per cent- and there are not too many farmers who are today earning 10 per cent on their investment. In the United States similar loans are now up to $95,000; $60,000 for land and buildings and $35,000 for chattels.


An hon. Member:: What is the interest rate?


Harry William Hays: I am not sure of the interest rates in the United States. We are saying

Farm Credit Act
that the first $20,000 on the unsupervised loans will bear an interest rate of 5 per cent; that rate will remain. Then any additional loan will be at an economic rate, and this would bear a relationship to the rate of interest at which we borrow money. Apparently we borrow our money four times a year. I am referring to the federal government. The interest rate on this money is 5J per cent. To this you would add the cost of operation, which would be .87 of 1 per cent. In addition to this there would be possibly one eighth per cent for provision for bad debt on new loans-not on present loans. It would be on the additional amount between $20,000 and $40,000, $27,500 and $55,000. This is what the amendments really say.


Thomas Clement (Tommy) Douglas: 
Harry William Hays: In this regard we are speaking of 20-year money, for which today we are paying 5| per cent.


Mr. Whelan:: Mr. Chairman, if I understand the position correctly-


Louis-Joseph Pigeon: Filibuster.


Eugene Whelan: Under clause 1 we can talk in generalities. You can be sure that I will be pretty general on this subject. This clause provides that beekeepers shall be called farmers for the purpose of borrowing money. I would say that most farmers I know have been associated with the beekeeping industry for a long time, because they have been stung so often by busy bee politicians, or whatever you want to call them, and they are so dubious about this act that they are worrying how badly they are going to be stung again.


Louis-Joseph Pigeon: Very humorous.


Eugene Whelan: Looking over all that was said yesterday, mainly by the opposition, it put me in mind of a phone conversation I had with my wife about three weeks ago. My wife runs my farm at home.


Robert Simpson: What clause is this under, Mr. Chairman?


Eugene Whelan: Generalities. I asked her what was going on at the farm, and she said they had had a terrible windstorm. I said, "I can't understand this, because John and Mike were both in Ottawa and there are no people from

the front benches on either side, that I know of, who have been down in that area". I asked, "How bad a windstorm was it?" She said, "It was a real bad one". I said, "How bad?" She said, "It blew everything off the farm but the mortgage".
All that was said yesterday by the members of the opposition added up to one thing, that for the last six years they have recognized that the Farm Credit Corporation was not meeting the needs of agriculture. The Conservative government of Ontario recognized the failure of the Farm Credit Corporation to meet the needs of farmers in that province; they recognized this failure by their action. In the first instance they discontinued the junior farm loans, this great saviour that was brought in and which was going to meet the needs of the farmers in Ontario. They recognized the failure of the federal government quicker than did most people.


Mr. Danforlh:: Did the hon. member say they have taken it off?


Eugene Whelan: They did, and then they reinstituted the junior farm loans, because they recognized the failure of the previous Conservative federal government to meet the needs of agriculture. Mention was made yesterday of interest rates. I am not 100 per cent in favour of the proposals in this bill, but I would point out to hon. members of this house that well over 55 per cent of all money borrowed by the farming industry of this nation is borrowed at a higher rate of interest than is proposed in this bill. Too many of our farmers are turned down by the Farm Credit Corporation and stay in the farm business by borrowing from modern Shylocks at high rates of interest and bonuses, or by borrowing from the finance companies. I noticed an article in the bulletin put out by the Canadian Federation of Agriculture-I think all hon. members will have received this- which says:
It may tie noted that for personal loans the banks are now charging, in effect, well over 6 per cent (more like 10J per cent), if service charges and the reduction of the loan through amortization are taken into account.
I think it was rather ironic last night when I went back to my office and opened the mail at six o'clock and found a letter that asked when this bill was going to become law. This man wanted to borrow $40,000 to extend his greenhouse industry. There has long been a need for this money for the farmers of western Ontario, where a high investment is made for a very ordinary return. A good many farmers in western Ontario, as members from

that area will realize, have well over $100,000 invested and they are not getting any more by way of return today than an average factory worker.
These people are feeding the nation, and I would say it is true of all farmers in Canada that they are the most efficient producers of agricultural produce to be found anywhere in the world. Moreover they are feeding this nation with the cheapest produced food anywhere else in the world. This is one of the reasons I am not ashamed to ask that this interest rate be reconsidered. When we think of all the other things we are doing for industry, for area development boards and everything else, I do not think it is asking too much if we make sure that our agricultural industry is given a low interest rate in this regard.
Last night one of the members from Prince Edward Island expounded certain theories on the Farm Credit Corporation. One of the matters I feel strongly about is the refusal of the corporation to make a loan when they designate a farm operation as an uneconomic unit. My own view on this is that we should have enough people able to go into the field and say, when they find a farm is not an economic operation and the farmer wants $20,000, that the corporation will lend him $30,000 to put him in a sound economic position, in a position where his children, along with the other children in the neighbourhood, will be able to enjoy the rights and privileges enjoyed by every other citizen in the country.
I also feel that the establishment of an appeal board should be considered. It is claimed that this is covered by the regulations, but I feel it should be written in in black and white. Civil servants have an appeal board to whom they can go if they are not satisfied on something. Unions and other bodies make provision for appeals as well. People can appeal to the local member of parliament, but if the appellant is a Conservative and he appeals to me, and still nothing is done, he will say: "I knew the dirty beggar would not do anything for me because he knew I was a Conservative." I am not exaggerating this because it is a real problem. These people should be able to go to an independent board. I gather from many farm organizations that a good many farmers and business people would be prepared to sit on an appeal board for which they would charge the government nothing. They would know the local problems better than anyone 200 or 2,000 miles away from the problem.
Farm Credit Act
I am not going to congratulate anyone on the administration of the Farm Credit Corporation, because when 55 per cent of the money borrowed by our farmers, as I said before, is being borrowed from Shylocks, and the like, we are not meeting the needs of agriculture in Canada. However, I realize the commitments made by the Minister of Agriculture and the committee he has set up will, we can rest assured, deal with these problems.


Mr. Douceit:: Mr. Chairman, I should like to ask the minister an important question. I have had many requests from persons who wished to purchase a farm and had part-time gainful employment, to leave the farm to their wives and families to operate until they had sufficient means to carry on the pursuit of farming. I know that in the past the loan board did not look upon this type of applicant very favourably. I fully appreciate that in order for him to be a desirable applicant he must, first of all, know something about farming; and it is understood that within so many years he will take over and operate the farm himself. I am wondering how the board would look upon an application of this kind under the new act.


Harry William Hays: Mr. Chairman, in reply to the hon. member for Lanark, according to page 17 of the regulations:
No loan shall be made on the security of farm land that is not part of a farm unit of sufficient size to produce, under the operation of the applicant, revenue which, together with any supplementary income, is sufficient-
And so on. As long as he establishes to the satisfaction of the Farm Credit Corporation that his major income will be from the farm, then he is entitled to a loan. If he was, say, a pilot for Air Canada he would not be entitled to a loan. We have not touched this part of the regulations. Even if he had an economic unit and was a fairly substantial chap there are provisions in the regulations which do not permit him to borrow money under the Farm Credit Act for additional land or chattels. However, I would be glad to consider this matter and hand it over to the committee. But we have not changed the regulations; they are left exactly as before.


George Henry Doucett: So that a man making an application under those circumstances would not have any chance, or at least very little opportunity, of getting a loan; but a farmer can borrow money for his son or his cousin?


Harry William Hays: Yes; provided the major part of his income is from this enterprise then he
U-; .1.-	:

Farm Credit Act
can participate in the benefits offered by the Farm Credit Corporation. He could have a part-time income; but if his major income was from some source other than farming he is not entitled to a loan, due to this provision in the regulations.


George Henry Doucett: In other words, if he had a gainful occupation which he worked at, say, eight months of the year, he would have to make more money on the farm than he was making from his other occupation in order to be considered?


Harry William Hays: Yes, that is the way it reads.


Mr. Honey:: Mr. Chairman, I should like to take a few minutes of the committee's time. I am pleased the hon. member for Marquette is in his seat now because I want to refer to his remarks, particularly on clause 1(2) of Bill No. C-100. I agree in principle with the remarks of the hon. member, but I would suggest to him-and 1 speak from some experience of a farm clientele in the practice of law-that possibly he is looking a little too technically at the provisions of this amendment. I think the amendment is designed to overcome, and will in fact overcome, many of the hardships experienced by farm families consequent upon the death of the husband and father. Too often in these circumstances the executor of an estate is placed in the position where he must pay succession duties and estate taxes, and must use some of the estate funds to pay off members of the family to whom legacies may have been left, or charges which may have been made against the farm property. This is the sort of situation in which an executor finds himself from time to time. I am sure my hon. friend has probably found, when acting himself as an executor of an estate, that it would be helpful to him to be able to go to the Farm Credit Corporation and obtain a loan which would permit him to carry on the business of the farm, at least until he is able to hand it over, probably to the son when he attains his majority.
I think all of us know farm families in which it is the desire of the father and mother that the farm will be taken over by a son. This sort of legislation will enable the executor to arrange the finances of the estate, to borrow money perhaps while the son is still a minor, in order to operate the farm. Then, when the son is able to look after the farm the executor can hand over an operating farm to him. I am not concerned, Mr. Chairman, about the doubt raised by the hon. member for Marquette,
	. A J [
although I know it is well founded. He referred to the question of a personal interest in the property. I believe that in practice the Farm Credit Corporation will apply the same good business principles to applications from administrators or executors as the corporation applies to any other application. If the executor or administrator can satisfy the Farm Credit Corporation that he is able to carry on an economic farm operation for the benefit of the estate, then I feel it is highly desirable that we have this amendment that will permit the corporation to do that.
If, on the other hand-and I think this should satisfy the doubt in the mind of the hon. member for Marquette-the Farm Credit Corporation is not satisfied with the ability of the executor or the administrator to carry on farm operations, then of course the corporation can refuse the application, just as they do in other cases in which they are not satisfied. The mere fact that this amendment is before the committee today, and the mere fact that it may be enacted, does not mean that all applications by administrators or executors will be granted. I feel that the principles I have just mentioned would apply even in the case of trust companies. I can envisage a situation in the administration of an estate whereby a trust company may be able to go to the Farm Credit Corporation and, acting in the best interests of the estate and the farm family, obtain a loan under this provision which might otherwise have been obtained by the farmer if he were living.
There is just one other point I want to mention to illustrate why I feel I can wholeheartedly support this amendment, and why I feel it is in the best interests of all farmers. I have already mentioned the facility that will be provided by this legislation in permitting the transmission of the farm to the son. Often we have seen cases in which a husband has died prematurely and the farm has to be sold, sometimes in payments of the debts, testamentary expenses and so on. Quite often the farm has to be sold because nobody is capable of carrying on because of lack of experience or for other reasons. There may be a son 14 or 15 years of age and the executor could go to the Farm Credit Corporation and obtain financing to operate the farm without imposing any liability or responsibility upon the wife but relieving her of these responsibilities. In due course, the farm can be turned over to the son. In this way, the farm remains in family

hands into the next generation, as would have been the desire of the farmer.
For these reasons I support these amendments. I am pleased that the hon. member for Marquette raised the pertinent points that he did, but I do not view them with the same concern that he does. I think, in practice, this provision will work out very well.


Mr. Lalulippe:: Mr. Chairman, I avail myself of the study of clause 1 of Bill No. C-100 to state briefly a few ideas about farm credit and in particular to try to make the minister understand the pitiful situation which prevails in my riding of Compton-Frontenac.
First, I must point out that the Farm Credit Corporation and the Farm Credit Act do not meet the sorry plight of the small farmers in Quebec. The reason is very simple: the small farmer cannot prove that his farm is an economic unit and that he is solvent because his income is very often too low, simply because his farm is too small and his equipment too old. Farm credit in itself would probably help several small farmers, but they cannot hope to get a loan because they cannot fill the conditions set up by the body which distributes those loans.
The problem is obviously the families' lack of resources and it is not likely to be solved by new legislation even if the latter provided for penalties and extensions.
Usually legislation does not increase the taxpayers' income.
If so many farmers fail to submit applications, it is for a number of reasons but the main factors involved are of an economic nature. None of us must forget that, because the problem will be solved only if we seek all those causes. We must always remember who made our country what it is today. Who benefits from it? Is it the founders' descendants or is it exploiters and spongers? Why is it that our farmers have become slaves who are fearful of the future in a rich country? Why are they compelled, after three or four generations, to mortgage their farm, and that, through their government?
It is because big interests were successful in controlling money and credit and because governments have become the servants of financial interests. Well, it is that control that all other reformation advocates denounce and respect at the same time that the Social Crediters have decided to break down, so that the people can become again master in their own country.
Farm Credit Act
When a doctor meets a patient, he has two alternatives: to look for the cause, or only treat the manifestations of the illness without looking for the cause.
Our present system goes one better and maintains the centre of infection in laying down that infection as a principle.
Farm credit is no solution. It is a cancer in the economy which will tend to increase the cost of living and to reduce some more the purchasing power, generally, after each payment. That is why we say that credit should be provided at administration costs, if this country really intends to save agriculture.
Farm credit will drive farmers away from their farms to put them back in the hands of the community. As a solution, we are presented with ARDA, a planning and suggestions which farmers will always be too poor to carry out; besides, that ARDA program could not bear fruit before some 15 years and by then, a great number of farmers will have left their farms.
What we need is concrete measures, peacefully hastened, if we do not want to face other depressions which, this time, would be detrimental for the whole economy; if our modern system makes it possible to create debt money with a stroke of the pen, it can make it possible to create, with a stroke of the pen, debt free money to be used to modernize agriculture and give the farmers their legal right to the efforts of generations and their right to become owners of their assets and not only indebted, depossessed and discouraged people, as it is the case today.
The present system has no mechanism to set in balance the consumer's buying power with the producers' production power. Why prefer the commission, ration and planning system? The only thing lacking is the financial system; why control the rest and not that one? Why not talk a little more of planned money and much less of planned economy?
Why not control money, instead of controlling producers and consumers? It is because of our apathy and silence, because we silently endured the whip and the knife in the past, that we have become the most exploited people in the civilized world. We should learn to act.
It is a well known fact that the farming industry in Quebec is experiencing a deep depression. My county is extremely affected by the farmers being considered as second rate citizens by the various governments, simply because they have not in hand, and

Farm Credit Act
on their own, the means of adjusting to modern economic trends.
It is inconceivable that society as a whole should expect so much from agriculture, while our governments ignore the basic problems in their legislation. I say "ignore", because last year, or more exactly on June 4 of last year, I received an answer to a question on the order paper asking for the number and amounts of loans granted by the Farm Credit Corporation in my county.
In 1961, seven requests had been received, of which four were approved for a sum of about $44,000. In 1962, 41 requests were received, of which 30 were approved, representing $413,700 which means ten times as much borrowed money and ten times more people with a financial load to carry.
The Farm Credit Corporation should be able to adjust to the local needs, so as to help not only the farmers to get credit for their own farms, but also to help farm organizations and other people who, though not being farmers themselves, make their living from farming, in order to open up paying markets, so that those who borrow might at least repay their loans.
In Compton, in 1962-63, 18 loans were approved for $282,900, and in 1963-64, 14 loans for $168,700. Fourteen applications were in abeyance. In Frontenac, in 1962-63, 17 loans were approved for $176,000, and in 1963-64, one application was approved, for an amount of $8,000, and five cases were in abeyance.
In both sections of the riding, Compton and Frontenac, 35 farmers were granted a loan. Are 35 farmers an economic market? Because their neighbours were unable to get financial help, they will not be able to make the borrowed money productive. Almost all the farms in the riding represent a whole [DOT]network of poverty. It is not small farmers, faced with chronic farming problems, who must adapt themselves to the Farm Credit Corporation, but rather it is the corporation which should find some means to adapt itself to their situation and help them.
One has no right to let people suffer, who might produce something to feed a part of our population which lacks the vital minimum, and that for administrative reasons, because of a legislation which is only paperwork, because of the decisions of officials blinded by routine. There is only one thing that can put an end to our troubles: it is a -concentration of collective efforts.
Mr. Chairman, I wish to introduce an amendment to section 16.

I move, seconded by the hon. member for Chapleau (Mr. Laprise)-


The Deputy Chairman:: Order. I apologize for interrupting the hon. member for Comp-ton-Frontenac but if he proposes to move an amendment to clause 16 I think it might be more appropriate if the hon. member would wait until clause 16 is being discussed.


Harry William Hays: Mr. Chairman, with the concurrence of hon. members I wonder whether we might not pass clause 1 this afternoon. I know we cannot pass them all.


Some hon. Members:: No.


Herman Maxwell Batten: Shall clause 1
carry?


Henry P. Latulippe: Mr. Chairman, may I call it five o'clock?


Mr. Baldwin:: I have some observations on this clause.
Progress reported.


The Acting Speaker (Mr. Batten):: 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 and public bills.



ESTATE TAX ACT


Mr. A. D. Hales (Wellington South) moved:: That, in the opinion of this house, the government should give consideration to the advisability of extending the ministerial discretion delegated by secton 16 of the Estate Tax Act beyond the "undue hardship or excessive sacrifice" limitations, to the end that the minister possess wider power to accept instalment payment of estate taxes and thereby reduce the number of "forced sale" liquidations that, in many cases, have resulted in the loss to Canada of Canadian ownership or control of Canadian business enterprises.
He said: Mr. Speaker, I welcome the opportunity to reintroduce this notice of motion which I favour very strongly and which I hope other hon. members of the house will favour likewise. I should like to outline simply the basis of this motion. Without repeating it word for word, it recommends to the government that it make the payment of succession duties payable over a greater length of time and by instalments,

I think we could put up a very good argument as to why death duties are at all necessary. Death itself causes enough hardship without adding to the burden by taxation, and when we consider that only about 1.5 per cent of the national revenue is derived from this source, in my opinion these taxes have a very crippling effect on the economy of the country. They certainly do not encourage one to save and build up an estate. However they are with us and will probably always be with us.
Therefore I think the government should give consideration, first, to extending the time of payment of succession duties from six months to five years and, second, to making it possible to pay these taxes by instalments.
As my motion deals with the payment of estate tax assessments by instalments I shall limit my remarks to this point. It is of paramount importance to Canada to arrange our taxing statutes so as to encourage the retention in Canada of the ownership of Canadian enterprises and to encourage the development of capital within Canada.
When the demand for taxes at death becomes confiscatory or requires the liquidation of a business at sacrifice prices, serious problems result. I submit that this is one of the reasons why certain taxpayers are forsaking Canada, and also why the control of much of our heritage is being sold to foreign investors. In the case of privately owned businesses where the owners die, six months is far too short a time to wind up an estate and secure the necessary funds to pay succession duties. The widow or some member of the family may wish to carry on the business, but the payment of succession duties in six months time is too great a drain on the capital reserves. Whereas, provided that a non-liquid estate furnishes proper security and interest is charged, there would seem, Mr. Speaker, much in favour of permitting the payments on the instalment basis.
May I remind the house again of the difficulties of continuing a family or small business, or making a satisfactory sale of the business after the dealth of the owner. It does create a real problem. Imposing payment of succession duties within six months only creates further problems, causes forced sales and loss of ownership, often to foreign investors.
I think I should draw the attention of the house to another hardship caused by the payment of these taxes within six months of death. The case so often happens where the
Estate Tax Act
survivors, in many instances widows, have to make forced sales of stocks or bonds. The sales have to be made at a low market value, thus creating grave problems for survivors, particularly in family owned corporations.
Another hardship often created by imposing the present regulations of the Estate Tax Act is in the rural area of our country. I know of a case where a father owned a large farm stocked with a good herd of pedigreed cattle. He died without making a will. He and his two sons had been building up this farm. Very unfortunately the mother died a short time afterwards, with the result that the two boys found themselves in the position where they had to gather up sufficient funds to pay the succession duties. There were no liquid funds available. The only thing they could do was call an auction sale, and this purebred herd of cattle was dispersed at that sale. They had taken years to build it up, and it was a real hardship for these two boys to see this herd dispersed simply in order to pay succession duties.
The Estate Tax Act, with respect to payment of succession duties should, as I said at the beginning, be amended to make death taxes payable in instalments, with interest in approved cases. Several representations and briefs have been submitted to the government in this respect. The National Council of Women of Canada, the Estate Planning Council of Toronto, and the Canadian Bar Association have all shown a great interest in this matter, and presented briefs to the royal commission on taxation.
I brought this subject up during the last session of this house, and a number of hon. members were very interested in my motion. Some five speakers participated in the debate, and with the exception of two members on the government side they were in favour of the motion. I realize that those on the government side no doubt will be bringing up some of the arguments that were mentioned previously.
As recorded at page 2990 of Hansard of May 6 last, the parliamentary secretary to the Minister of Finance (Mr. Benson) has this to say:
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.

Estate Tax Act
When this motion was debated in the house last December the hon. member for Edmonton West (Mr. Lambert) had this to say, as recorded at page 5617 of Hansard for December 9, 1963. He was referring to what Dr. Eaton, the former deputy minister of finance, had to say:
Dr. Eaton has a very theoretical and nice sounding proposition in the lengthy quotations we got from the parliamentary secretary, but this presupposes that owners of a concern are masters of all the factors and that they can plan to the nth degree. Let me assure him that I am concerned with companies where one cannot do so. I can cite a case of one of our better growth companies, controlled by four men in their forties, which had to be sold to what I am sure was foreign capital because the principal shareholder could not get any insurance. He was uninsurable. This was a growth company where there were no accumulative reserves. The principals drew good salaries but their capital was tied up in the shares of that company and its subsidiaries. If you cannot get a term insurance with a buy-sell agreement, how can you protect the interests of the estate and the remaining shareholders who must make some provision for eventualities? There was no doubt in my mind that against the potential assets of the principal shareholders of this company there was going to be a substantial tax assessment. I know of other cases where Canadians have lost control. I am not going to name the companies; they came through knowledge acquired in my legal practice.
Yet the parliamentary secretary says we do not come forward with concrete examples. I communicated with the Canadian Institute of Chartered Accountants and was informed- and I quote:
While many of our members in public practice know of many cases where businesses have been sold because of the looming threat of estate taxes, because of the professional relationhip with their clients they are unable to divulge the information you require.
I can well understand that men in these positions are not at liberty to divulge certain things.
On May 21, 1964, the Financial Post came out with an article headed "In Five Years These Firms Have Been Sold Foreign". It stated that in just five years control of 143 Canadian firms had been acquired by foreign investors. I am sure we can say that a large percentage of these sales was made because the owners knew of the succession duties which would be facing those companies. I know it is always known what succession duties will be payable. Owners are advised by their lawyers or accountants that the law is as it is, and that there is no use making objection. The tax will have to be paid and they, or their heirs, will have to get the money together with which to pay them within the allotted period of six months.

This is a serious problem. I am not so concerned about the situation in which the large companies or corporations find themselves, though no doubt these succession duties affect them acutely. I am more concerned about the number of small businesses, family owned businesses, which find themselves in a precarious position when the time comes to round up enough money to pay succession duties. I think we are all agreed that death duties in Canada are extremely high. For instance, a company with a taxable income of $1 million has to find $300,000 in succession duties. The duty on a $2 million set-up would be $800,000. On a taxable income of $250,000 succession duties would amount to $44,000, and on a taxable income of $160,000 they would amount to $19,000. It is the problem faced by these smaller firms to which 1 would refer the house particularly.
I know it has been said that these firms should carry insurance to take care of these eventualities. That is all very well, but there are types of business which just cannot follow such a course. For one thing, they may not be insurable, because of health reasons or other reasons including age. Then again, if life insurance is taken out to cover the situation, it only adds to the total value of an estate and makes the taxable amount so much greater. I would point out that there are many family businesses which are just making a living for their owners. The business is being held together, but there is not enough money available to pay premiums to take care of succession duties. The business is composed of land and buildings, paid for, granted, but there is no money available from which to pay these succession duties within six months. Yet, under the act as it now stands, no provision is made for the payment of these duties over a more extended period of time.
I do not wish to take up the time of the house much longer because I know there are many who wish to speak on this subject. I have been most encouraged by the interest which has been shown in the subject since I first introduced the motion to this honourable chamber. Editorials and letters which have appeared in the press in support of my suggestion have been gratifying. Maybe I should put one or two of them on record-I hope I will be pardoned for the personal references in this connection. The Windsor Star printed an editorial headed "The Nub of the Problem" which read as follows:

Alfred D. Hales, Conservative M.P. for Wellington South, puts his finger on the nub of the succession duties and estate tax problem. He told that many small businesses have to be sold to raise the cash to meet the death taxes.
The duties have put more than one modest business on the block. A man builds up his firm, then he either has to liquidate before death to provide the taxation money or his heirs have to sell to pay the taxes.
The succession duties and estate taxes are driving small businesses into the arms of big corporations. That may not have been the original idea, but that is how it works out.
Another editorial-a short one-appeared in The Independent of April, 1964:
We have discussed succession duties on these pages before. We have deplored the fact that the law requiring that they be paid within six months is encouraging Canadian businesses to fall into the hands of Americans.
The money derived from succession duties provides the government with only 11 per cent of its revenue. Yet the sale of businesses to pay these duties is daily allowing more and more of Canada to fall into the hands of foreigners and depriving us all of part of our birthright.
Yet, earlier this year, when Alfred Hales, PC. Wellington South, introduced a bill to allow these payments to be made over a period of five years, the government rejected it.
Perhaps I might mention a letter I received from a private individual who said this:
Some time back the writer read an article in the Globe and Mail regarding succession duties, estate taxes, etc. You are so right. To me, any firm which necessarily must sell out for this reason should have cause to be supported by the government.
We have worked very hard and enjoyed seeing our business grow. We started in the basement of our home. Our family and help stuck together and our present shop is 90 feet by 320 feet, and we have taken over another shop 40 feet by 80 feet. We have approximately 140 on our payroll.
The writer expresses his concern about succession duties and about the time when they will have to be paid in cash.
These are all the remarks I wish to make at this time. I hope hon. members will recognize the importance of the situation and express their views. I hope the matter will come to a vote and, if it does, that the subject matter will be referred to the committee on banking and commerce for the further study which I honestly feel it deserves.


Mr. E. J. Benson (Parliamentary Secretary to Minister of Finance):: The arguments put forth by the hon. member for Wellington South (Mr. Hales) were very strong, especially strong I feel for the complete abolition of death duties. Indeed, I think the present government has done much in this regard from the federal point of view inasmuch as it has
Estate Tax Act
turned over to the provinces 75 per cent of the death duties paid.
First, I think we should have a little background with regard to the sections we are discussing. The sections of the Estate Tax Act dealing with collection of duties are sections 13 to 21. When the Estate Tax Act was passed, there was a change, inasmuch as the executor became responsible for the tax rather than the successor, as was the case prior to the enactment of the act. Section 15 makes provision for instalment payments over a six-year period where a beneficiary is receiving a life annuity. Section 16 is the section to which the motion refers, and I will later quote it in full. This is the section which provides that the minister may make allowance for delayed payment when there is hardship. Section 17(2) provides that an appeal does not stop collection of the tax. Section 18 provides for the payment of the taxes to be met as a debt of the estate, and section 19 provides that there will be 5 per cent interest on the overdue tax. Section 20 deals with penalties, and section 21 with refund of overpayments. The specific section with which we are dealing here, section 16, provides:
Notwithstanding the provisions of this part respecting the time within which payment shall be made of any amount as tax under this part by the executor of the estate of a deceased or by a person as the successor to any property passing on the death of a deceased, where the minister is satisfied that payment of any such amount as tax under this part cannot, without undue hardship or excessive sacrifice, be made within that time, the minister may defer the time for payment of that amount or any part thereof for such period, on such terms and on payment of such interest, not exceeding 5 per cent per annum, as to him seems equitable and proper.
The amazing thing about this particular motion put forward by the hon. member for Wellington South (Mr. Hales) is that he is asking that the minister's discretion be further extended. It seems to me that last year when we were talking about ministerial discretion in order to close up some flagrant abuses under the Income Tax Act there were very, very strong arguments from the opposite side of the house that in no case should ministerial discretion be extended or should more reliance be put upon the minister with regard to the application of a taxing statute. However, be that as it may, I believe that the hon. member's motion is worthy of consideration. Indeed I made statements in this regard on December 9 last and I would refer hon. members to pages 5612-5615 of Hansard. I again discussed this particular problem during the debate on the Estate Tax Act-not on

Estate Tax Act
the Income Tax Act, as the hon. member stated. This was on May 6, 1964, beginning at page 2990 of Hansard. There would really be very little effect on estates in Ontario if the motion put forward by the hon. member were adopted and were put into the Estate Tax Act. If the federal government were to extend the payment period over five years, it would really have little effect on the payment of total death taxes in Ontario. In backing up this argument, Mr. Speaker, I would like to point out that with regard to Ontario, Quebec and British Columbia the federal government collects only 25 per cent of the death duties. The other 75 per cent of the death duties which are paid by people in the provinces of Ontario, Quebec and British Columbia are not even levied under a federal act; they are levied under provincial statute.
In the province of Ontario they are levied under the succession duty act, and there are similar acts in Quebec and British Columbia. In the other seven provinces the duties are levied under the federal Estate Tax Act and a 75 per cent rebate is made to the provinces. But in the province in which the hon. member for Wellington South resides, 75 per cent of the duties-that is, when the present legislation assigning 75 per cent to that province is completed-will be collected by the province of Ontario. So if somebody has $100,000 in death duties to pay, he will only be paying $25,000 of this amount to the federal government. Therefore if we adopted the hon. member's suggestion and spread it over a five-year period, it would mean that out of a total of $100,000 he would have to pay $75,000 in cash to the province of Ontario within six months, and the other $25,000 to be paid to the federal government could be spread over a five-year period. I believe the action proposed by the hon. member would be much more effective if he would go to his Conservative confreres in the province of Ontario and persuade them to change the succession duty act so that succession duties in that province were paid over a five year period. This would be of much more benefit to his constituents and to mine than incorporating his suggestion within the Estate Tax Act of Canada.
I stated on May 6 when this question was raised by the hon. member for Brome-Missisquoi (Mr. Grafftey) that there had not been a great deal of evidence brought forward to the Department of National Revenue indicating that businesses had actually been disposed of because people had had to pay estate taxes. I have checked with the Depart-

ment of National Revenue and am told that this is still the case; that people have not come forward and said, "Well, if we have to pay our estate taxes we will have to sell our business". I am sure that if people had had to dispose of their businesses in order to pay estate taxes they would have gone howling to the Department of National Revenue. However, I have checked and am told they just cannot find specific cases. As I have stated before, the problem has been considered for a good many years by the Department of National Revenue under the previous administration and the present one. The difficulty is to find evidence of hardship, for someone to present to them specific cases where this has occurred. Companies often change hands. In my experience as a chartered accountant I have found that businesses change hands as the main shareholder gets older, for a good many reasons. I might just indicate a few of the reasons why.
You often find that a business has developed because of the forceful management of one particular individual. This individual fears, as he gets older, that his heirs will not be able to carry on the business in the same forceful way, and he may turn around and sell the business. In addition, in the case of companies these days we find that some small business operations are making such a profit that serious income tax problems develop. They are operated as private companies, and we often find with regard to them that there is a build-up of retained earnings on which income taxes have not been paid. Provisions have been written into the Income Tax Act to try to deal with this particular problem. However, all the provisions which are contained in the Income Tax Act have not really created a situation whereby on the death of a businessman the money can be taken out of the business easily, or if he wanted to take the cash out during his lifetime this could not be done without paying very sizeable amounts of personal income tax.
I have found that many businesses are disposed of in order that the individual may realize a capital gain rather than having to continually face this income tax burden. To these people this is much more important than the succession duties burden on their death. As I have previously stated, and as I stated during the debate on May 6, the Minister of Finance (Mr. Gordon) and the Prime Minister (Mr. Pearson) have indicated that

there is to be consultation between the provinces of Canada and the federal government on tax matters. There has been mention of setting up a committee for this purpose, and personally I would be very much in favour of it. I believe estate taxes and succession duties should be one of the subjects to be discussed with the provinces at this time.
I also indicated on May 6 that it is extremely difficult for the federal government to make changes to the present Estate Tax Act because it affects the incomes of seven of the provinces to whom we rebate 75 per cent of the tax. Nevertheless I am very much in favour of consultations taking place, and I am sure they will take place and that the particular problem raised by the hon. member in his resolution will be discussed at that time.
Personally I do not think that any move to allow instalment payments should be limited to businesses but should apply to other assets as well. One speaks of businesses passing from the control of one group of individuals to another on the death of a major shareholder. However, on the death of individuals quite often in Canada one has to sell stocks, bonds and real estate. There are a good many assets which have to be realized, apart from the business assets of an individual. I believe that if such an extension of payment of death duties were made it could only be effectively made, I stress again, if the succession duty acts of Ontario, Quebec and British Columbia were changed, as well as the federal Estate Tax Act. I believe that such extension of payments would in equity have to apply to the assets of individuals such as stocks, bonds and real estate, instead of just business assets as proposed in this resolution.
The hon. member also raised the question of ownership passing to non-Canadians because of the estate tax problem. I hope I have convinced him that from this time onward such events in Ontario will not be because of the estate tax problem, but mainly because of the succession duty problem under the act passed and administered by the Conservative government of the province of Ontario. The hon. member stated that because of death duties businesses often fall into foreign hands. Personally I have not been able to find examples of this. I also checked with the Department of National Revenue and they could find no concrete example of this happening. I should like to point out to the hon. member that we on this side of the house are very interested in preserving and ex-
Estate Tax Act
panding Canadian ownership of business in this country. Indeed, I should like further to point out that the present government in spite of a good deal of criticism from members of the official opposition, has taken the first effective steps ever taken in this country to encourage the transfer of part of the ownership of foreign-owned companies in Canada to Canadians.
In conclusion, Mr. Speaker, I should like to sum up by saying that I believe the motion is worthy of consideration. I think the hon. member should send it off to the Conservative government in Toronto, so that that government will be willing to consider it with us when we sit down to discuss death duties. I also suggest that he send it to the governments of the provinces of Quebec and British Columbia, because 75 per cent of all death duties in these provinces are levied under provincial statutes. I think this matter is worth discussing, and in my own personal capacity I will do everything in my power to see that it is discussed when we sit down to discuss tax matters.
I have indicated that the motion, in order to be effective, requires provincial action in these provinces. We would like anyone who has evidence of businesses having to be sold because of death duties to submit such evidence to the Department of National Revenue so that when we sit down with provincial representatives who are levying most of the death duties we will be able to present them with this kind of evidence, perhaps provided to us by the hon. member, in order to further the case he has brought forward by this motion.


Alfred Dryden Hales: Mr. Speaker, I wonder whether I could ask the parliamentary secretary a question. There are strong possibilities that the province of Ontario may collect their succession duties on the instalment basis. If they go ahead and do this, would the parliamentary secretary be prepared to recommend to his government that they follow suit?


Edgar John Benson: Let me say in answer to the hon. member that I checked no less recently than today, but found that no legislation to this effect has been introduced in the province of Ontario. We Liberals are certainly very much interested in having similar tax laws applied across the country. Indeed, when the Estate Tax Act was introduced, it was the hope that this might be the act which would be adopted across the country, whether we were to collect the tax and rebate it to

Estate Tax Act
the provinces, or the provinces were to collect it themselves. This has not been the result, and there are certain differences between the federal Estate Tax Act and the succession duty acts of the provinces of Ontario, Quebec and British Columbia. But we are willing and anxious to have similar laws applied across the country and the government I am sure would be willing to discuss this matter when discussing death duties with the provinces.


Mr. Joseph Macaluso (Hamilton West):: Mr. Speaker, I should like to commend the hon. member for Wellington South (Mr. Hales) for reintroducing this motion. I was not able to speak on it in December 1963 when it was first introduced, a fact which I regret, but my absence was due to illness. I have been interested for quite some time in the Estate Tax Act and in the old dominion succession duty act.
Being a lawyer by profession I certainly come into contact on many occasions, both in my own practice and the practice of our firm, with estate tax matters in which succession duties have played a very important part. The Estate Tax Act, as it now is, came into force on January 1 of 1959, I believe, replacing the old dominion succession duty act. It provided for payment by the executor of an estate of the succession duties levied by the Estate Tax Act within a period of six months. I also believe that in the present act if an application is made to the minister he has discretion, if a bond is posted, to extend payment of tax for another period of six months, making the period a year. The experience I have had is that on many occasions it is difficult to obtain a bond, and it is also difficult to obtain the exercise of the minister's discretion. I think any of the lawyers in the house will acknowledge that.
I am completely in favour of payments of succession duties in instalments, and I certainly think this notice of motion should be given serious consideration by the Minister of Finance (Mr. Gordon) and the government. I have been trying to urge such consideration and I commend the hon. member for Wellington South, as I say, for reintroducing the motion.
Whether or not there is actual loss of Canadian ownership or control to foreign ownership as a result of the payment of succession duties is at times questionable. I am sure there are businesses and firms who have sold out with the succession duty aspect in mind, not so much because of the payment of the taxes themselves. The hon. member for Wellington South quoted from the May 21 edi-
[Mr. Benson.)
tion of the Financial Post concerning 143 firms which were acquired by foreign investors. I paid particular attention to this article and studied it very carefully, but there is nothing in it to lead one to believe that those acquisitions by foreign investors resulted from the payment of succession duties. The hon. member assumed that some of them may have been caused as the result of such payments, and perhaps they were; I wish I knew for sure, as perhaps do many of us. But there is a problem here.
In section 16 of the act, which deals with the minister's discretion, a problem arises with regard to the words "undue hardship or excessive sacrifice". If payment of succession duties is likely to result in undue hardship or excessive sacrifice, the minister may extend the time of payment. The Estate Tax Act is one of those acts which does not have a very comprehensive definition section. Perhaps this is because parliament did not want to define undue hardship or excessive sacrifice. This provision really leaves it to the minister's discretion as to what is undue hardship or excessive sacrifice. I am not one who is in favour of ministerial discretion, especially when it is left in such a vague position as it is left in section 16.
Here, Mr. Speaker, we have the words "undue hardship or excessive sacrifice" which really cover the particular situation the hon. member for Wellington South (Mr. Hales) wishes to have covered. I agree that the section is invoked very rarely; very rarely does the minister use this discretion. My own thinking on this matter is that perhaps the act should be amended by extending the period of six months to a period of one year during which the minister could exercise his discretion. Then, perhaps, there could be a better definition of the circumstances of undue hardship and excessive sacrifice. Certainly, many of our acts have very comprehensive definition sections, but this act does not. I say that this is one of the faults of this act, that it does not define, perhaps purposely, what these words mean. Perhaps there is security in vagueness, Mr. Speaker.
The instalment payment plan is a very interesting proposal, Mr. Speaker. We have this provision in our Income Tax Act, and I think it could be extended to the Estate Tax Act. However, as the parliamentary secretary pointed out, I think there is a problem in obtaining provincial consent to the provision for instalment payment. As the parliamentary secretary pointed out, the provinces of Ontario, Quebec and British Columbia have

their own succession duty acts. Other provinces do not and the federal government collects estate taxes and then remits them to these seven provinces. According to my research, there has to be consultation with the provinces of Ontario, Quebec and British Columbia as to whether they are prepared to make the same provision in their own acts.
I have read the debate on December 9 and the debate on May 6, 1964 with regard to the estates tax resolution when it was before this house. As a result of my own research and discussions with other lawyers eminent in estate matters, I have concluded that there is a problem in obtaining the agreement of the provinces to having the same provision in their own acts. If the provinces agree to this provision, then the federal government can also have it. I believe that the report of the Carter commission on taxation will probably come forward by the end of this year or perhaps sooner, as well as the reports of the various provincial royal commissions on taxation. I am sure these reports will contain recommendations with regard to the Estate Tax Act. Certainly, there is a great deal lacking in this act and it is not doing the job it was meant to do when it was enacted in 1959. I believe that when these reports come forward the Minister of Finance (Mr. Gordon) should consult with the provincial ministers in Ontario, Quebec and British Columbia, on the possibility of obtaining such an amendment as has been proposed by the hon. member for Wellington South. Certainly, I will do all I can to urge that this is done.
The parliamentary secretary has stated the minister will do this. The hon. member can be assured that I will do my best to see that he does do this. The other problem connected with section 16 is that it permits the minister to defer the payment of taxes in cases of undue hardship which may occur if payment is demanded too quickly. I believe that six months is too quick for any person, any individual or large corporation. I gathered from the remarks made by the hon. member for Wellington South that he would like to see succession duties eliminated. I agree, and so far as the federal government is concerned the revenue collected is so small, 1.5 per cent of our national revenue, that it would not have a great effect. However, I agree also with the hon. member that we probably will never see this done. Certainly, we should try to alleviate the burden that is imposed on many large corporations and many family businesses connected with the payment of
Estate Tax Act
succession duties within the six month period. This certainly is a hardship, not only on the large corporations but on the small business firms.
I have a recollection of one case in which the widow of the deceased proprietor wished to carry on the business. She was unable to do so because her husband had not provided means whereby the succession duties could be paid. She was unable to carry on the business because of this demand for the payment of succession duties. An appeal was launched under section 16, but she was not able to obtain the discretion of the minister, so there was hardship involved. I should like to suggest, if it would be possible to do so without consultation with the provinces, that the deferment period be extended to 12 months rather than six months. Then, perhaps if a bond were posted it could be extended another six months, making it 18 months. If the deferment period were 12 months, then many people would not be forced to sell short at a time of low capital value or forced to consider refinancing.
I do not believe the industrial development bank meets the situation when it comes to the payment of succession duties. The industrial development bank, in the functions it exercises, is lacking because there is too much red tape, and at times the delay is too lengthy in processing the loan. By the time the bank turns down your application the six month period has expired. I should like to see action taken, therefore, to extend the deferment period for at least 12 months. In addition, I should like to see some definition of what is undue hardship and excessive sacrifice. I know there are others who wish to speak in this debate, so I will give up my time to them.


Mr. M. J. Moreau (York-Scarborough):: did not intend to speak in this debate today until I heard the parliamentary secretary say he was looking for evidence that there was a problem in this area. I thought perhaps I might relate for the benefit of the house one example, at any rate, without mentioning any names, which was brought to my attention within the last six months. I certainly assure the parliamentary secretary that I will be giving him all the details of this problem before too long.
I should like to commend the hon. member for Wellington South (Mr. Hales) for bringing the problem before the house. I must agree with the parliamentary secretary, however, that it is one which properly belongs before

Estate Tax Act
the provincial legislature. I urge the hon. member to apply all the pressure he can on his Conservative colleagues to have this done in the province of Ontario.


Alfred Dryden Hales: Do not forget Quebec, where you have Liberal friends.


Maurice John Moreau: Being an Ontario member and realizing that the hon. member for Wellington South is also an Ontario member, I hope we can collaborate to see what we can do in our own province.
I do not generally support provisions containing ministerial discretions. However, I believe we can make a better case for it when it comes to the question of deferring tax payments than in other applications, such as the distasteful class or kind legislation which was before the house in recent times. I feel that perhaps the hon. member does have a point on the question of tax deferment in giving the minister more discretion. Referring to the problem of the evidence which I have to offer the parliamentary secretary, I may say that a short time ago I was approached by the president and founder of a new, internationally known food processing firm which operates within my riding. This gentleman came to Canada as an immigrant about 20 years ago and got into the food processing business. He has now developed a considerable export business, something for which I am sure we would all commend him. He now has an enterprise worth several million dollars which is growing very rapidly with the result that the firm is continually short of cash.
Recently he has had to face up to the problem of possibly selling the enterprise to one of a number of American concerns who are bidding for it. The firm is a highly reputable one and its products are rapidly gaining a reputation all over the world. The firm label has become very valuable and a number of large American firms have been putting pressure on him to sell his enterprise to them. They have been using, very successfully, arguments related to our estate tax laws, and have pointed out to him that with the way the company is growing and in view of the shortage of liquid assets his family would have to make a forced sale if something should happen to him.
He said to me: "Mr. Moreau, I came to this country and it has been very good to me. I want to commend the Minister of Finance (Mr. Gordon) for the efforts he is trying to make to keep control of our companies here

in Canada; but what can I do? There is only one thing I can do. My tax advisers have told me that if I do not want to sell I have to form a public company." He said: "This is a company that my family and I have developed over the past 20 years and we are not particularly anxious to go public. However, I must. I have followed the advice and we are now getting out a stock issue."
The parliamentary secretary says that the department does not have any evidence of forced sales, but I suggest to him that the problem is a real one, one which a number of firms are meeting before they are actually faced with the situation. They are doing so in two ways, either by selling the enterprise to an American operator or by forming a public company in Canada and thus jeopardizing control of the company which the enterprise of the family has created.
These people feel strongly that the situation is unjust and I must say there is a great deal of merit in the argument put forward to me. Again I should like to urge the hon. member for Wellington South (Mr. Hales) to do what he can to acquaint the provincial authorities in Ontario with the problem, because it really lies there. I hope we will see changes in our estate tax laws very soon because I certainly agree with the hon. member that this is a very real problem, particularly for smaller family firms in Canada.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, without being charged with talking out this motion I should like to make several observations with respect to it. I did not hear the comment just made but I guess there was not much to it. The hon. member for Wellington South (Mr. Hales), as he pointed out, has introduced this motion again this session, but I would say that the points he has put forward and emphasized seem to be very important and logical. It seems that these days we are living on the instalment plan. We are carrying on our lives on the instalment plan and we may as well continue this in the estate tax field. Therefore I do not think there is anything remarkable or unique in this suggestion.
I believe that the suggestions made by the hon. member would be of real benefit to many who are faced with the task of trying to meet these responsibilities and still maintain the business, or whatever the asset may be. The argument has been raised that this matter is a provincial responsibility because of the fact that the provinces of Ontario, Quebec and

British Columbia receive 75 per cent of succession duties. I do not know why British Columbia is always tacked on the end. I would much prefer that members would refer to British Columbia and then come farther east, but I have noticed that the order is always Ontario, Quebec and British Columbia. However, that is beside the point.
This whole matter could be resolved, as far as the federal administration is concerned, by turning over to the provinces 100 per cent of these taxes. Then we would not have to be concerned here about passing legislation complementing provincial legislation. We could get rid of the whole business by letting the provinces have 100 per cent of estate taxes.
I rose to support the motion that has been presented. I believe there are a great many other amendments that should be made in estate tax legislation, but the ones suggested today could be brought in without too much difficulty and would benefit a great number of people.


Mr. J. J. Greene (Renfrew South):: Mr. Speaker, first of all I would commend the hon. member who introduced the motion. I would also indicate to him that he is in very select company in making this suggestion because the same or a similar suggestion has been put forward by the university women's club, the business and professional women's club and the women's institutes in various parts of the great riding of Renfrew South. Thus the hon. member is certainly in very select company when he makes this suggestion.
I would point out to the hon. member, however, that his motion refers specifically to family businesses and I think it envisages holdings of considerable size. Again, I think we should commend not only the Minister of
10,	1964	4175
Business of the House
Finance (Mr. Gordon) but also his parliamentary secretary, who has been rather humble in taking praise in this regard, because between them they have brought before the house very powerful suggestions whereby Canadian business entities may be preserved.
On the question of succession duties I suggest that the right to pay over a period of years should be given not only to large family businesses, as the resolution appears to envisage, but particularly to the smaller estates of more humble persons, such as farm people who are subject to these duties. They should have the right to commute them, just as much as larger business enterprises.


The Acting Speaker (Mr. Batten):: Order. The hour for the consideration of private members' business has expired.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: Mr. Speaker, I would ask the house leader to let us know what is in front of us for the next few days.


Guy Favreau: Mr. Speaker, we intend to complete the debate on the committee stage of the bill concerning farm credit, which we hope to finish tomorrow. After that we intend to proceed with interim supply. If there is time left on Friday we will proceed with the third reading of Bill No. C-90, to amend the National Defence Act, which has now come back from the committee.


Gordon Minto Churchill: Not third reading; it will be in committee of the whole house.


Guy Favreau: Yes, of course. We will take the committee stage and then hope to proceed with third reading. On Monday we will begin the debate on the flag resolution.


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

[Stage Direction]


Thursday, June 11, 1964